Agenda item

The Committee received a report that provided a strategic overview of the contractual performance of the Thames Valley Transactional Services Public Private Sector Partnership.  In line with previous requests from the Committee, the information provided a high level summary of performance and current issues.  The Chair requested that a more detailed and comprehensive report should be provided in future to enable the Committee to properly scrutinise performance.

The ten year contract between the Council and Arvato was due to cease in March 2022 and the services in scope, including customer services, ICT, transactional HR, revenue and benefits were noted.  John Wybrant, Arvato’s Chief Operating Officer gave a presentation which is summarised as follows:

·  Business Rates collection had exceeded the 97% target with a final outturn of 97.63%, which was circa £10m more than collected in the previous year.  Council Tax collection was slightly below the 97% target at 96.79%.

·  17 of the 20 customer service KPIs and 15 of the 17 IT targets had been met.  IT had a been a major priority during the year with significant upgrades in systems.

·  The successful apprentice programme continued with a further 13 apprentices achieving NVQ Level 2 in 2017/18.

·  Key challenges in year 6 of the contract included additional support for the new Repairs, Maintenance and Investment contract, insourcing of environmental services back to the Council and aligning systems arising from the Council’s introduction of a new HR and finance system, Agresso.

·  Arvato’s parent company, Bertelsmann, had announced a strategic review which could result in partnership, part or full sale of its Customer Relationship Management business.  A decision was expected by the end of the year.

·  A new operational and account management structure for Arvato had also been introduced and the new organisational chart was noted.

·  Arvato now employed circa 800 staff at the headquarters in Slough supporting the Council and a range of other clients.  Recruitment was a key challenge.

Members discussed a wide range of issues including the improvements made to IT during the year.  Mr Wybrant commented that since IT was added to the contract, Arvato had sought to improve the legacy systems and aged IT infrastructure, however, the pace was determined by the level of investment.  Arvato had responded to the Council’s changing ambitions in terms of the digitisation of services.

The Committee discussed the contract model, which was worth circa £11m per annum.  The contract included a penalty mechanism linked to the value of the contract and targets were regularly reviewed.  A question was asked about the operational impacts on Arvato when the Council changed strategy and it was responded that Council services did change over time and good communication was essential so that Arvato understood the direction the Council was going in and could plan, train staff and allocate resources accordingly.  It was noted that the Council was developing a new Customer Services Strategy but this work was at a relatively early stage.

Members asked for an explanation for the number of complaints upheld which has been consistently above the 25% target through the year.  It was responded that the Council’s client team closely monitored complaints and that the levels were relatively low, however, the Council and Arvato had focused on reducing the proportion of upheld complaints since April.  Actions included training and service reviews to try to improve performance.

Members asked a number of specific questions about individual KPIs and areas of performance and explanations were provided.  The Committee asked for further information in future reports on the values and volumes of KPIs in addition to the percentages provided.  This would be provided and Mr Wybrant invited Members to visit the teams at Phoenix House to improve understanding of the services provided to the Council.

At the conclusion of the discussion, the Committee noted the report.

Resolved –

(a)  That Arvato’s performance in the period April 2017 to March 2018 be noted.

(b)  That it be noted that Arvato had formally notified the Council that they were in the process of exploring commercial options for the future of their Customer Relationship Management (CRM) business which may include partnership or a full or partial sale of the CRM business.