YOUR Civic Catering Service

During September 2107 an Options Appraisal was commissioned by Birmingham City Council and Cityserve, the scoring system within the options appraisal was agreed by the project board, which consisted of Head of Commercialisation and Commissioning, Legal Services, Human Resources and City Finance officers, this was impartial and independent to the business:

Priority outcomes were identified for consideration as options:

• Minimise the future exposure to losses through retaining non profitable business
• Protect the employment and terms and conditions of employees currently delivering the Service.
• Minimise the future financial risk to Cityserve and Birmingham City Council through operational and staffing costs
• To provide a high quality effective Cleaning service to schools
• Potential for schools to make financial savings on cleaning
• Cityserve continue to generate the required budgeted contribution of £2.1m

The above six options were considered as an outcome of stage one of the options appraisal, four of the options were discounted as unviable or not meeting the priorities for the business or Birmingham City Council at this time. Two options progressed to stage two:

• Continuation of the service in house
• Migration of the service to the schools directly

Consultation began with Trade Unions in October 2017 and they were able to acknowledge the need for the service to change, they understood the pressures on budgets and staff liabilities for the future stability.  Trade Unions indicated they would support the option of migration of cleaning services to schools, academies and children’s centres. This preferred option would protect their member’s jobs and ultimately terms and conditions.

Cityserve had completed financial analysis and determined this option would be attractive to the school’s business managers as it would have the benefit of delivering an average of 11% cost saving to the sites.

A report was presented to Cabinet on 14th November 2017 requesting their permission to consult with key stakeholder’s following the outcome of the options appraisal on the proposal of migrating the cleaning services into educational establishments. Cabinet approved the proposal and signed off the report to progress.

A project team comprising of skills from corporate services was established:

Project Board:

• Project Lead / Chair
• Project Manager
• Corporate HR
• Corporate Legal Services
• Corporate Finance
• Cityserve Business Lead / Expert

Additional skills were needed at various times throughout the project and these were drawn outside of the main project team,

• HR payroll was needed at the point of transferring the cleaners
• A hub within Cityserve was set up with a business project sub group to create and track the plan.
• Client Managers were included to deliver the individual consultations with staff at school sites.

The Project Board planned an initial conclusion by the end of the next financial year, March 2018, seeking completion of all cleaning employees migrated to deliver the cleaning within schools.

Consultations and TUPE were the two tasks that were business critical elements to success, in order to mitigate risk to Birmingham City Council and be legally compliant.  Communication and record keeping had to be concise and accurate and would be relied upon later in the process.

Formal consultations began 17th November 2017 and continued until 16th February 2018; there were many groups of stakeholders to be consulted: Customers, Clients, Partners, BCC, Trade Unions, Staff.

Each establishment was given the opportunity to choose a path they wished to take, dependent on the path they chose and the entity of the school either a TUPE (Transfer of Undertakings Protection of Employment) or a Birmingham City Council internal staff transfer would follow and bring a different consultation process for the employees.

Two different Consultations were programed: owners of the contracts, which was schools and academies, and so Head Teachers and Business Managers were invited to sessions and, employees to transfer, Cityserve staff.

The project lead was a Senior Leader within Birmingham City Council, but outside of Cityserve, this enabled transparency and clarity, and ensured communication was consistent and an objective view of the proposed changes; the rational was this kept it slightly apart from the business and eliminated reputational damage to the catering business.  The project lead made appointments and presented at Birmingham City Council Head Teacher Forums, this was split into Secondary Heads, Primary Heads and Special School Heads.  As a result of the initial consultations, head teachers and business managers asked Cityserve to consider additional time for them to make a decision; Cityserve considered this and recommended 31st March 2018 became end of phase 1, with 31st August 2018 the final date for any migration. 

“They asked, we delivered”, throughout the process Cityserve have listened to requests and worked enthusiastically to meet the needs and objectives of all the stakeholders involved.

The extended closure date gave schools the timescale to go through a tender process with external companies if this was their chosen path.

The consultations with partners indicated that a number of the establishments through BASBM (Birmingham Association School Business Managers) were to engage a consultant to go through a collaborative procurement process, Cityserve have worked very supportively with this option and the representatives of those schools.

With 850 employees to consult with Cityserve were committed to see these staff on a group basis but ensure every employee had the opportunity to attend a session.  Meetings were scheduled around the city at local venues and planned groups of staff were invited to attend.

Cityserve SLT led these structured sessions and was assisted by Human Resource representatives. Presentations were shared with staff to show the rationale behind the decision and what would happen next with TUPE or transfer and what it meant to them. Presentations were tailored to the audience however a consistent message was delivered across all sessions. Trade Unions Representatives were available for 1 2 1 meetings with staff at the end of each briefing.  Schools had not indicated their chosen path and so it was not shared with employees.

The sessions were an hour but it highlighted that there was a resource allocation issue and a sub project team from within Cityserve was established to undertake the administration of the consultation process.  SLT shared the delivery of the presentation across the city, for consistent and meaningful communication.

A business stream of the project was set up in a hub office at Cityserve, this was essential for the transfer gained momentum and ensured we were working collaboratively and compliant.

Corporate HR guided the process of TUPE, which commenced in line with the decision making of the sites.

Two issues with the potential for risk to Birmingham City Council had to be mitigated, “The Council Fair Deal Policy” is an agreement made between the Council and Trade Unions, it states: Admitted Body Status must be applied for by any in coming contractor before staff can transfer.  An incoming contractor must have a comparable pension scheme to the Local Government Pension scheme or be members of the scheme to ensure that the employee can continue with the same pension arrangements and conditions when their employment transfers to an alternative employer.  If the contractor does not have this they must apply to the LGPS for this admission status prior to transferring staff, this is strongly adhered to by Trade Unions within Birmingham.

The other risk was the council’s position on Equal Pay claim indemnities, there was a number of employees who had equal pay claims against the council outstanding. Third parties would not take over employment of these staff without an indemnity from the council to mitigate their future costs, a second report was presented to cabinet on 24th January 2018 to gain approval for indemnities under delegated authority to the Corporate Director of Finance and Governance in consultation with the Equal Pay sub group, the report approved Equal Pay indemnities where schools transferred services to a third party contractor.  Cabinet approved a blanket indemnity for sites transferring by 31st March 2018, but it was time limited to 31st March 2018. 

Regular correspondence was shared with Head Teachers and Business Managers and when this was approved it helped with the decision making process.