Decision details

5.1.1

The Executive Director Neighbourhood Services introduced a report by the Director of Street Scene and Regulation Services concerning the Streets Ahead Private Finance Initiative (PFI) Contract refresh.

5.1.2

The report outlined proposals to amend the current contractual clauses associated with the carriageway asset management strategy, contract termination and provision of additional clauses for incorporating procedures for Small Value Changes.

5.1.3

The report detailed;

      i.         why a Contract review was necessary at this stage;

     ii.         the intended outcomes of the Contract Refresh, including operational and financial benefits;

    iii.         current progress against the additional benefits;

   iv.         the governance process to achieve the above.

5.2

RESOLVED UNANIMOUSLY: That the Waste and Street Scene Policy Committee;

1.    Notes that officers will proceed with delivering items 1 and 3 of table 3 in part 2 of this report through early 2025, and that a project team and a working group will be set-up followed by the development of a detailed programme.

2.    Agrees to changes in the PFI contract required to enable the adoption of the proposed asset management strategy set out in part 3, and appendix 2 to this report.

3.    Agrees to the inclusion of an additional mechanism for implementing small value changes into the PFI contract, as described in part 4 to this report.

4.    Agrees to the amendments made to sections of the contract pertaining to the termination process, set out in appendix 3

5.    Delegates to the Executive Director of Neighbourhoods in consultation with the General Counsel to negotiate and finalise the proposed contract changes noted above and to approve the execution of the Deed of Variation subject to DfT Approval and lender consent.

6.    Notes that acceptance of the above changes if approved will result in the financial benefit from Amey LG set out part 10 of this report.

5.3

Reasons for Decision

5.3.1

The PFI is now 12 years old operationally and the project to initiate and procure it was started over 15 years ago. The Contract is output based which provides for only a limited level of flexibility for community-based input and contribution.? Generally, the Service Standards are based on 'city wide' requirements and as such do not always address the differing needs of the City’s communities.

5.3.2

Sheffield has changed significantly over the last 12-15 years there have been changes to the City’s demographics, geographical and economic shifts, the impacts of environment issues are being felt more often and severely, technology through innovation has also moved on significantly since the start of the Contract.

5.3.3

The Contract Refresh and the proposals outlined in this Report offers sustainable benefits that will enable the Contract to be better aligned with these changing demands.

5.3.4

As part of these changes, Amey have offered a financial benefit to demonstrate their commitment to the delivery of the Contract in its revised form.

5.3.5

Officers note that the proposals for asset management and small value change will contribute significantly towards the councils commitment to meeting the recommendations from the Lowcock Inquiry including the ability to operate flexibly and meet evolving demands and local needs.

5.3.6

The proposals are underpinned by all parties appetite to improve partnering and the contract culture leading to a more inclusive and transparent approach to delivering the requirements of the PFI.

5.4

Alternatives Considered and Rejected

5.4.1

Asset Management Strategy

The current Asset Management Strategy is aligned to the Contract requirements. The proposed strategy is a development to the current strategy using past intelligence of servicing including repairs, treatments and traffic growth to project future performance of the carriageway pavements. The alternative to this option was a do-nothing scenario which would mean continuing the same operations going forward. Officers agree that the proposal to revise the strategy will add benefits to the City in terms of increased resurfacing works with reduced multiple visits to the same area.

5.4.2

Changes to the Termination Process

Several options were considered as part of the exercise to update the termination process, these are noted below:

5.4.2.1

Macro Level Measures Towards Triggering Termination (Service Standard Measures

This option was discarded for the following reasons:

·       This would encourage performance to be centred around meeting service standard levels as opposed to individual performance requirements.

·       There was no guarantee that individual performance requirements would be fully observed as it would not necessarily count towards termination.

5.4.2.2

Macro Level Measures towards Triggering Termination (Blend of % and Strategic Performance Requirements)

This option was discarded for the same reasons noted above, i.e. it did not guarantee compliance with all performance requirements or individual requirements that would not be included in the % performance scale or form part of the suite of strategic performance requirements.

5.4.2.3

Recalibration of Approx 100 Performance Requirements

This option was also discarded for the same reasons noted above.

5.4.2.4

Two-Tiered Approach Limiting Default to 54 Key Performance Measures

This option consisted of a stepped approach to termination.

·       Firstly, performance measured against all performance requirements would be monitored, if poor performance would be triggered by meeting the contract thresholds, then this would lead to the next step.

·       Secondly, performance would then be measured against 54 key performance measures. The 54 performance measures selected was based on past data where performance has been frequently measured against.

5.4.2.5

This option was discarded as officers acknowledged that whilst it would be unlikely that the service provider would reach the termination thresholds based on past performance, in the instance that it did, then the added second step would unlikely be breached if the service provider strategically remained compliant to those performance requirements, again raising the risk of not meeting all the performance requirements.