LAWR

BRIEFING Efficiency savings: Key tips to remain in control Local authorities continue to find innovative solutions to funding cuts, making use of shared services and driving efficiencies through contractual arrangements to ensure key services are delivered and front line services maintained. Further austerity measures are to be expected, therefore authorities should be proactive in finding additional savings in respect of environmental services. Andrew Hirst, senior associate at law firm Eversheds, sets out a number of areas where a new approach has made a difference; taking care of the environment as well as saving money. Re-evaluating existing arrangements is one way councils could save money. Many authorities have already outsourced elements of their environmental services. Even where this has already occurred it is possible to find further savings. Savings broadly fall into two categories, better contract management (e.g. is the authority fully utilising its remedies and ensuring the contractor complies with its obligations in full) and renegotiation of the contract. Examples of the latter include re-scoping the contract to meet the authority's current needs, refinancing using institutional or prudential borrowing, exploring whether the contractor can generate any third party income (which the authority will then receive a share of) and relaxing or removing specific performance targets. In most contracts an authority will not be able to make unilateral amendments. Therefore it's important to consider how the contractor can be persuaded to come to the negotiating table. This may be through a combination of carrot (e.g. sharing savings) and stick (notifying the contractor action will be taken in relation to existing performance failures and/ or the contract will be more robustly enforced in the future). Shared services This allows authorities to find efficiencies and maintain front line services by working in tandem with other authorities to find economies of scale with services being managed by a single team for a number of authorities. Shared services have worked well alongside major waste contracts with the private sector to deliver improved services for residents as part of the green agenda and commitments to protect the environment. Multi-skilled workforce Employees delivering the services can become multi-skilled undertaking a number of tasks across environmental services (and potentially other areas such as highways) rather than remaining specialists. Having this multi-skilled approach means that authorities may have a smaller and more flexible workforce. Delegation of functions Authorities may be able to piggy back on another authority's existing waste arrangements. For instance a number of authorities have delegated all or part of their disposal function to WDAs who have spare capacity and the benefit of preferential gate fees at disposal facilities. Spend to save There are a number of ways in which this could be achieved, for instance by outsourcing elements of authority's waste function or by investing in a new treatment facility. Prior to commencing any procurement a business case should be created assessing potential savings informed by the various procurement options. This is very important. Unless a clear goal is set there is a risk of mission creep or even failure – if the aim of the procurement is to reduce cost, this should be outcome rather than a more expensive but higher quality service. Conclusion A number of authorities are working towards making significant savings by taking some of the steps outlined above. For some authorities this has also resulted in a higher level of service (e.g. increased recycling levels). Local authorities should take a fresh look at their existing arrangements and ask whether they could be delivered more efficiently. One note of caution is that when exploring any of these areas it's important for authorities to remain cognisant of the wider legal landscape. For example, does the renegotiated contract remain within the scope of the original OJEU Notice, what are the TUPE implications in re-scoping the service or moving to a multi-skilled workforce and does the authority have the power to delegate the applicable function. These issues should be explored prior to taking any of the above steps. 6 Local Authority Waste & Recycling March 2014 Machines that will exceed your expectations by the bucket load Highest Standard Spec | Unique QuadCool | Unbeatable support www.bellequipment.co.uk A combination of class leading specification, superb machine performance and unbeatable after-sales support mean the range of Bell Wheeled Loaders are really making their presence felt. Don't just take our word for it - call us now and let us show you what our customers say about what makes our Wheel Loaders special. Strong Reliable Machines Strong Reliable Support 0800 915 7700 sales@bellequipment.co.uk www.bellequipment.co.uk

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