Background

In 2003, Herefordshire Council procured new service delivery contracts through a joint venture with Jarvis plc for highways contract services, and with Owen Williams for highways design consultancy services.

By 2007, Amey had acquired both Owen Williams and the contract from Jarvis. This presented a real opportunity for both parties to reassess the partnership and service delivery, increasing quality and efficiency.

Innovation

Amey worked with Herefordshire Council to renegotiate the contract in order to deliver a more integrated, effective, and efficient approach, without the need for an expensive re-procurement exercise.

On 1 September 2009, Amey and Herefordshire Council delivered a major change in the management of environmental services, focused on achieving the right outcome through the adoption of a ‘managing agent’ approach.

This has moved the delivery of highways, parks, public rights of way and a range of ancillary services from a more traditional three way partnership, to a ground breaking strategic commissioning model, becoming known as the ‘Herefordshire Model’.

Many of the contract’s core principles are drawn from Managing Agent Contractor (MAC) arrangements, but fundamentally, the contract also incorporates our shared aspirations, the corporate values of both parties, and the Local Area Agreement priorities for Herefordshire. The initial term is four years, with potential extensions for a further ten years.

Amey now has responsibility for the delivery of a fully integrated service, from development through to scheme completion; identifying local community requirements and delivering the council’s objectives. The revised contract moves the relationship from the traditional client and service provider approach, to an integrated, outcome focussed approach.

Efficiencies

Working in a true partnership, Amey and the council reviewed contracts and fundamentally changed the delivery model, in order to deliver savings in excess of £1 million per year, together with improved performance and value.

The council’s long-term relationship with Amey will deliver for in excess of £4.5 million savings by 2013 and, through performance-related contract extensions, further savings of £22 million by 2023.

In addition, it is stipulated that throughout the duration of the contract our year-to-year service costs will increase at a lower rate than inflation would normally dictate. The actual increase will vary between 0.25 per cent and 1 per cent less than inflation each year across service areas.

The performance framework focuses not only on excellent services but also on delivering the wider values of the council. This deal will bring benefits to Herefordshire that will develop the local economy, build stronger communities, increase employment opportunities, improve the environment and contribute to tackling climate change.

An annual value for money review process will be followed to ensure that the cost of service both reflects local cost drivers, and continues to represent best value in the future.

Outcomes

For the Herefordshire Model we have thought beyond efficient procurement, considering the wider goals that we could influence. We have built a performance framework to meet the needs of Herefordshire. This focuses on delivering excellent services and on developing the local economy, building stronger communities, increasing employment opportunities, and leading the local contribution to climate change reduction.

For example, engagement with community and citizens is a key part of the Herefordshire Model. It ensures that not only the council, but also Amey, engages directly with customers to ensure their needs are met. Targets relate to a wide range of issues and include apprenticeship schemes, new deal placements, voluntary sector support, and satisfaction levels of the public.

We are working towards similar objectives across a number of key areas, with Amey also committing to use local products and services for a minimum of 44.5% of expenditure.

Conclusion

Over the last 24 months Amey has assisted the council in radically altering their procurement process for a range of local environment and public services. Strategic consideration has achieved far more than simply a new procurement mechanism; the partnership has ensured increasing value for money, with extensive cost savings. There is now a robust framework for continuously improving quality of service, and we have used this opportunity to align our wider aims and values with outcome based performance metrics.

Amey now works alongside the council as a strategic provider of services. The company is crucial in the developing the local economy, building stronger communities, increasing employment opportunities, and improving the environment across the region.