Agenda item

Purpose of report: To update the Committee on the development of the Orbis Partnership, the benefits delivered to date, and an overview of future plans

Witnesses:

Anna D’Alessandro, Director of Corporate Finance

Mr Mel Few, Cabinet Member for Finance

Nikki O’Connor, Strategic Finance Business Partner (Improvement & TPP/Resources)

Key points raised during the discussion:

1.    The Director of Corporate Finance introduced the report and explained that the Orbis Partnership had been running for around five years and had, from inception until 2018/19, achieved savings of approximately £16m, and £3.2 was expected for 2019/20. She went on to explain that 31ten had undertaken a review on the Orbis Partnership, which was prompted by the fact that all three of the partnering authorities were moving in different directions. The review concluded that the partnership as a whole had changed its strategic direction, and the review represented a forward-looking view of what each of the councils wanted to achieve in the future. Even though the Orbis Partnership had helped the Council achieve savings, the rationale behind the recommendations was to allow the Council to invest in the back office and support the transformation programme. A lot of the savings came as a result of the three councils coming together and the efficiencies that arose from this, as well as a reduction in headcount.

2.    The Director of Corporate Finance went on to explain that the new target operating model was keeping the procurement, business operations and IT functions as part of a future Orbis Partnership. All three were pulling out their property functions, and the Council had removed themselves from the majority of the HR function. With regards to finance, the only arrangement that it was planned to maintain was the series of “centres of expertise”, which were integrated teams that covered financial accounting, tax, treasury management and insurance. A review was currently being undertaken to analyse whether it was right for the Council to remain as part of this partnership.

3.    Referring to the Director of Corporate Finance’s point that savings had been through headcount reduction and not integration, the Chairman questioned whether the headcount would increase when services were moved back into the Council. In response, the Director of Corporate Finance said that one of the areas they were looking at as part of the review was how the Council could deliver savings from integrating its services. A lot of work had been done in the finance department around process integration, and HR was doing the same.

4.    The Vice-Chairman asked about the savings of £1.7m that were outlined in the report, as well as the £1.4m black savings in the Q1 performance report, and questioned whether other sectors in which Orbis was operational were at risk in terms of their ability to achieve further savings. In response, the Director of Corporate Finance explained that, in order to balance the budget, the Council had to find the savings, so whatever was not being delivered by Orbis would have to be found using another method, which was the premise behind black savings. The Strategic Finance Business Partner went on to explain that the £1.7m as outlined in paragraph seven of the report was the Council’s share of the agreed savings across the original Orbis services, and that £1.7m was outside of the transformation agenda and largely being delivered during the current financial year. With regards to the £1.4m black saving, that was a Council-specific target in relation to a transformation project which was added to the transformation programme to highlight the importance of the 31ten review and the need for the Council to review the Orbis Partnership. Conversations were taking place regarding the Council’s future contribution rates to Orbis once it pulled out of the services outlined in the report, and savings would be seen in the 2020/21 budget as a result. In terms of what was anticipated when the budget was set, altogether this amounted to savings of approximately £3.1m.

5.    The Vice-Chairman questioned why human resources was not being shared across the Orbis Partnership and was told by the Cabinet Member for Finance that they were dealing with specific differences, as there were particular commonalities between Surrey County Council and the other councils regarding areas such as procurement, IT and business operations, whereas the human resources market was different in Surrey. The actual administration of human resources would be left in Orbis but the individual assessments needed to be undertaken by someone who understood the Council and its specific needs. This would allow the person who sits in the organisation to regularly meet with CLT, understand the issues and interpret them into an action plan better than someone overseeing all three authorities.

6.    Following a request from the Vice-Chairman, it was agreed that the 31ten review would be shared with the Committee.

7.    In response to a further point made by a Member of the Committee questioning the rationale behind human resources returning to Surrey, the Strategic Finance Business Partner explained that paragraph 25 of the report summarised the main reasoning behind the decision, which was focused on the level of transformation that the Council was undertaking and how important it was the human resources function could support that. It was felt that the Council needed to have full control going forward.

8.    Referring to paragraph 37 of the report, a Member of the Committee questioned why the aggregated contribution ratio had continued to be based on the initial cost of the services at the point of entering the partnership. He was informed by the Director of Corporate Finance that they were planning to revisit all of the contribution rates and what was going to work going forward.

9.    Responding to a question about the full business case that was produced when the Council first entered into the Orbis Partnership, the Cabinet member for Finance agreed to share these details with the Committee.

10.  Following a discussion, it was agreed that a follow up report would be provided to the Committee in summer 2020.

Actions/further information to be provided:

1.    The 31ten review is to be shared with the Committee.

2.    The full business case that was produced when the Council first entered into the Orbis Partnership is to be shared with the Committee.

Recommendations:

The Committee is to receive a follow-up report on the progress made towards implementing the recommendations.