Agenda item

Consider report by Chief Officer Roads regarding the preferred operating model for the Council’s Roads Services (copy attached).

With reference to paragraph 10 of the Minute of 12 May 2015, there had been circulated copies of a report by the Chief Officer Roads seeking approval for the preferred operation model for the Council’s Roads Services and agreement to proceed to the next stage, which was development of a full business case for the preferred model.  The Depute Chief Executive (Place) gave a presentation which summarised the report and Option Appraisal which was appended to the report.  It was explained that on 12 May 2015 the Executive Committee agreed that a review be carried out of the operating model of the Council’s wider roads service to ensure maximisation of services to the Borders and continued ability to operate in the external market place; and that any model should be capable of interfacing with the Edinburgh, Lothians, Borders and Fife (ELBF) proposal.   Given the tight timescales for arriving at the most advantageous operating model the focus was placed on evaluating the options of internal restructure or Limited Liability Partnership (LLP). A series of workshops were held between October and mid November 2015 with Senior Managers from across the Roads Services, HR, Finance, Business Transformation and Trade Union representatives. The key drivers for change centred around legal, financial, customer, governance and flexibility issues. The preferred redesigned service arrangement was a Client/Provider set-up.  This applied to both of the options. It was also emphasised that, with regard to governance, the Council would retain 100% control as an internal service and with an LLP the Council would retain 100% ownership and exercise control through the new governance structure.  The differences between the Internal Restructure and the LLP options were largely around their capacity to generate external income.  The internal restructure was limited by legislation in the amount of external income that it could generate, with limited tender opportunities.  The LLP would be free to trade commercially. It would therefore not be limited in the amount of external income that it could generate and could take full advantage of any tender opportunities.  When both options were scored against the key drivers for change the internal restructure scored 280 and the LLP scored 407.  Members discussed the report and were supportive of the proposal to develop a full business case for the LLP model as a means to ensure that the Council’s road service would remain effective whilst also having the opportunity to operate in the private market and deliver additional benefit. Members welcomed the emphasis on the customer service approach considered within the report.  It was agreed that in respect of the competitive nature of the Council’s road operations in relation to local businesses the Council needed to be transparent, throughout the process, with those competitors who worked alongside.

DECISION

AGREED that:-

(a)        the Client/Provider arrangement was the best set up for a redesigned Roads service;

(b)       Limited Liability Partnership (LLP) was the best model for the redesigned services;

(c)        a full business case be developed for the LLP model within the next three months; and

(d)       the Chief Officer Roads bring a further report on the Council’s Roads Services for consideration by the Council in June 2015.