arvato government services wins LGC Award - Private/Public category

Local Government Chronicle - LGC AWARDS 2007

FROM STRENGTH TO STRENGTH

East Riding of Yorkshire set up a partnership to increase an already strong performance. Ana Paula Nacif charts its development.

Historically, public/private partnerships have been created to turn around poor performance, but for the winner of this year's LGC PPP Award the story is quite different. Through a partnership with arvato government services, East Riding of Yorkshire Council is looking to boost the local economy and increase performance and efficiencies.

The eight-year agreement, which was signed in October 2005, will deliver 600 new jobs into the area, a regional business centre and, through a joint venture company, will also generate revenue the council can use in front-line services. The council estimates that the jobs created by economic regeneration and the joint venture company will boost the local economy by over £8m each year.

Tricky initial negotiations resulted in a satisfactory outcome for both partners.

Sue Lockwood, director of corporate resources at East Riding, says the creation of a regional business centre and 600 new jobs by October 2009 are significant elements of the deal.

“We were looking for a partner committed to customer focus rather than just willing to provide us with a standard package of services,” she says. “We were in a different position to many other local authorities looking at outsourcing in that we already had a strong performance in many of our services. We were not looking to outsource a problem area or an area lacking in investment.”

Initial negotiations were not without difficulty for both sides, but Ms Lockwood says that tenacity and commitment did pay off, with both partners satisfied when the deal was finally sealed. The transfer of 475 staff was achieved with no visible change for the public.

Apart from having clear objectives and a robust project management team in place, another key to East Riding's success was the involvement of councilors, trade unions and staff.

The council transferred 475 staff, but they remained in council buildings and kept their telephone numbers and email addresses, so there was no visible change for the public and elected members. The council also stipulated that no jobs could be transferred to another location, nor could services be delivered outside the council without its express consent.

“For some services the delivery could be done from almost anywhere,” explains Ms Lockwood, “but we had seen at first hand the effect when council services had disappeared out of their areas almost overnight.”

The council says the key to any true partnership is to ensure strategic objectives are clear and the relationship is developed in a transparent and honest way from the outset. arvato's director of operations and client services sits on the council's senior management team, which means the company is fully informed of what is happening in the council and how strategic objectives may change.

“If you are serious about partnership, as opposed to buying services, your partner has to be willing to work alongside you so that they are able to adjust and match their focus to meet your objectives,” says Ms Lockwood.

She adds: “There is one thing about local government - nothing remains still. We wanted to find a partner who was flexible enough to help the council achieve its objectives and be genuinely interested in the challenge of keeping ahead of the game in service delivery.”

The procurement process was cited by the Audit Commission as best practice. The hard work and effort East Riding put into the partnership has paid off. The partnership has attracted interest, with the Audit Commission citing the procurement process as an example of best practice. It even featured in articles in Der Spiegel and The Wall Street Journal.

According to Ms Lockwood, the partnership's second annual performance review has shown improved performance in a number of areas. “arvato not only met the proposed targets, they exceeded targets in a number of them, even where performance was already in the very highest percentiles. I believe this is largely down to the open and transparent way in which we work together as partners and the clear understanding of what each expects from the other.”