Decision Maker: Cabinet Procurement and Insourcing Committee

Outcome: Implemented

Is Key Decision?: Yes

Is Callable In?: Yes

Date of Decision: April 29, 2025

Purpose:

Content: RESOLVED to:   1.  Approve an extension of the present call-off contract pertaining to Lots A, B & C for 1 year from the 3rd August 2025 to provide time to re-procure the services. 2.  Approve the preferred procurement strategy for Lot A, Corporate Site Security Services, option one, that is through a closed framework agreement in conjunction Lots B and C. 3.  Note that the Procurement Strategy for Lot A includes bringing  the Meet and Greet role for corporate buildings and various ceremonial duties back in house to be delivered by the Facilities Management and Customer Operations Team. 4.  That subject to approval by the Committee of 1 & 2 above that the procurement will be run as follows:   The tender would proceed on the basis of 50% quality / 50% price as follows:   Lot 1: (Lot A and Lot B as described in the report will be combined)   Lot 2: (Lot C as described in the report) will run separately     Reasons For Decision   Two options were identified and assessed in relation to Lot A. In deciding upon the preferred option as well as the service considerations there are financial considerations which balance the Council’s strategic insourcing objectives alongside savings requirements to meet the Council’s Medium Term Financial Plan (MTFP).   The two options are as follows:   Option 1   Reprocurement of the Lot A Security Services Framework with Joint Delivery Model   Option 2   Insourcing of Lot A   A detailed summary of the underlying facts behind each Option is provided below:   Option 1 - Reprocurement of the Lot A Security Services Framework with Joint Delivery Model   This option proposes no change to all c.75 officers employed in Lot A who would remain fully outsourced and managed by the winning bidder of the ITT. As noted above, the additional Hackney staff would come from the contact centre so they are already employed, and when they are not occupied meeting visitors to the Town Hall, they would continue to perform their normal work duties from a desktop device.   The current contract value for Lot A is £3.75m per annum.   It is envisaged that a new service provider would propose a new model of staffing and hours of operation that could leverage the investment made by LBH to deliver savings over years 2,3 & 4.   Efficiencies may be obtained across Lot A sites via the increased utilisation of alternative technologies and use of Community Safety’s CCTV service.   Further consultation will occur in parallel with Service Directors regarding the options for Lots A.   Projected cost reduction - This is an estimate of probable savings based on the review report commissioned by the Council and the implementation of its recommendations. Further discussions will need to occur with the service leads to determine full viability and permission to amend service hours and methods of coverage.   Enhanced terms - does not apply as all staff will be retained on their present terms and conditions.   The advantages and disadvantages of Option 1 are listed below:   Advantages Disadvantages   ·  Brings a Hackney member of staff to the TownHall Service Desk ·  Lowest organisational risk ·  Meets member’s manifesto commitments of a safe and secure borough through a professionally delivered security solution ·  Efficiencies of outsourced service scale ·  Projected to result in c£1m cost reduction Lot A only (subject to service agreement on changes) ·  Outsourced companies more experienced with security management ·  Reactive resources to ensure service is effective and resilient ·  Reduced redundancy liability exposure in the event of building closure   ·  Does not deliver of manifesto commitment to insource ·  Working contracts remain varied ·  Cost of service are subject to market conditions / may increase subject to ITT returns     Option 2 - Full Insourcing of Lot A   This option proposes the full insourcing of all c.75 officers delivering Lot A services into the Council.   Given the employment conditions of the Council compared to the security industry a greater number of staff would be required for the provision of a like for like service. Due to the legislation around the security industry, an insourced option would need to ensure a high level or regular, specialist training for all members of security staff, specialist security tools, equipment, systems and vehicle, as well as the operational framework to support the specialist service.   A third party would need to be procured and available on a call-off basis for additional security provision needed to supplement the insourced sources for special events, ad hoc protests, spend varies depending on Council demand, a variable requirement across all service areas.   We estimate 0.6 additional Full Time Equivalent (FTE’s) employees per insourced role which equates to 45 additional staff as illustrated below. We have also modelled on the basis of 30 additional staff to account for reduction in staff resulting from rationalising sites across the board:   Financial Summary of Option 2:  A summary of Costs for insourcing 75 officers in the existing team plus additional 30 or 45 officers required to maintain current level of service delivery are illustrated in this table:   Item Annual Cost Total over 4 years     Base position - insourcing the current security service staff of c.75 in Lot A Average rate of £30k per Officer   £2.25m   £9m   Operational costs including specialist training provision, Uniforms, equipment EV vehicles, Patrol System, Radio’s and management support Using 32.54% on cost rate   £732k   £2.93m Total cost of Option 2 (base position + 30 additional staff)   £4.17m   £16.7m Total cost of Option 2 (base position + 45 additional staff)   £4.77m   £19.1m     The advantages and disadvantages of option 2 are listed below:     Advantages   Disadvantages     ·  Complies with member’s manifesto commitment of insourcing ·  Control of security service in house ·  Hackney brand across service ·  Enhancement to staff working packages ·  Improvement to working contracts ·  Brings frontline service into LBH family ·  Presents a more consistent ‘Hackney’ appearance in key buildings   ·  Increased organisational risk ·  Enhanced terms, fewer working hours per week = increased staff (approximately 75 positions insourced) ·  May result in recruitment of between 30 and 45 additional staff to ensure continuity of service levels. ·  TUPE arrangements will  restrict the  ability to drive any savings in the next 2 years ·  Increased exposure to redundancy liability in the event of building closure due to the accommodation strategy ·  Council inexperienced with security management and legislations ·  Associated cost with additional delivery resources including senior management team, equipment, vehicles, PPE and uniform, buy and maintain a patrol and radio system ·  May be harder to maintain Service quality due to sheer number of new staff ·  Increased mandatory training requirements governed by legislation will need to be provided from an external provider (associated costs) ·  Counter to sustainability goals as more resources and assets will be required ·  Loss of staff overtime ·  Internal approval routes and processes have the potential to lead to delays ·  Cover arrangements for leave, sickness, maternity or other absences may increase overtime or possibly lead to agency staff to cover shifts ·  24/7 cover, 365 days per year will include enhanced overtime rates for weekends, bank holidays, Seasonal holidays ·  Loss of economy of scale and inability to increase security provision quickly to minimise potential risks ·  Dependency remains for third-party security support       The recommended option for the procurement of Security Services for Lot A, Corporate Site Security Services, is option one, that is through a closed framework agreement. The reason that Option 2 has not been recommended is that  insourcing the service will cost considerably more than tendering for a replacement outsourced service over the four (4) year period. Given the significant financial pressure Hackney is experiencing across the board, this is a cost that can be avoided via retaining the outsourced model. Further Insourcing would bring additional risks and complications that would add additional indirect costs to other services which are suffering their own pressures at this time.    Further the outsourced service will also bring with it resilience in that the contract will bring with it access to a large trained workforce that is able to respond swiftly to emerging issues that require a security presence  which presents a better service for the Council.      Alternative Options Considered and Rejected   In addition to the insourcing we also considered:   Option: Not to extend   The option not to extend was considered and rejected on the basis that the Council has a duty of care to protect its staff, assets and the visitors to all its corporate sites.   It is not a viable option to exist without a Security Service.    Option: Create a Hybrid Model   The Council rejected the option of creating a Hybrid model due to the sheer complexity and additional cost this would bring with it.   In the Council's worsening financial position combined with the additional pressure it would place on already stretched teams, it was felt this route would bring no benefits.   Risk profile, the splitting of the service could considerably increase the risk to LBH and would make the staffing of ad hoc events more difficult and costly as the insourced staff would be on enhanced terms and conditions which would make calling them in at short notice far more difficult / expensive.