INVITATION TO TENDER ENFORCEMENT AGENT & DEBT COLLECTION SERVICE (REF: CU2434)

Transcription

1 Wards Affected: All Wards. ITEM 6 CABINET PROCUREMENT COMMITTEE 20 OCTOBER 2014 INVITATION TO TENDER ENFORCEMENT AGENT & DEBT COECTION SERVICE (REF: CU2434) Responsible Cabinet Member: Councillor Middleton (Cabinet member for Resources & Finance) Report Sponsor: Nicole Jones, Service Director (Finance & Resources) Author and contact: Alistair Townsend, Revenues & Benefits Service Delivery Manager, Tel: (01908) Executive Summary: This report is seeking approval to use a Framework to procure an Enforcement and Debt collection service for a contract that will be for 3 years with a provision of extension for further 1 year. That framework will either be an existing one, or one that the Milton Keynes Service Partnership (MKSP) created (after business case and approval by MKSP Board). If the latter, there will be income opportunities for the MKSP, which in turn ultimately contribute to the Council s bottom line. 1. Recommendation(s). 1.1 That an agreement with either Milton Keynes Service Partnership (or another framework supplier) to call off its framework for the procurement of Enforcement and Debt Collection Services be approved. 2. Background 2.1 Enforcement Agent services are currently nil cost to the Council and the current estimated budget for Debt Collection services across the authority is in the region of 70, The Council uses Enforcement Agents to recover debts. In the main, these debts are for Council Tax, Business Rates (Revenue Services), unpaid penalty charge notices (Parking Services) and to a lesser extent, commercial rent (Property Services). Indicative annual volumes and values are as follows: Debt Type Volume Value of debt Fees paid by debtors Cost to MKC Council Tax 7, m 0.3m 0 National Non-Domestic Rates m 0.02m 0 Parking & Commercial Rent m 0.02m 0 CPC, ITEM 6 20 OCTOBER 2014 PAGE 1

2 2.3 Enforcement Agents replaced Bailiffs following the Governments review of the provision, and following the implementation of the Tribunal, Courts and Enforcement Act 2007 and subsequent secondary legislation. 2.4 Currently, the Council has contractual arrangements that are with 5 Bailiff Companies (now known as Enforcement Agents), that are linked to two Milton Keynes Council (MKC) framework agreements. These ran since May 2011 for 3 years and were extended to May 2015 on the basis of the impending, but not yet detailed, new legislation. 2.5 Jacobs, Rossendales and Bristow & Suitor provide services under Framework CU2068 (ot 1) and deal with the collection of Council Tax, Business Rates and Property debt. 2.6 Equita, Rossendales and JBW provide services under Framework CU2068 (ot 2) and primarily deal with the collection of Parking Charges. 2.7 The Council is in the process of approving a new Income and Collection Policy which enables the procurement and management of enforcement services to be dealt with by the Council s Revenues Service as part of a corporate approach to debt collection. 2.8 Whilst the primary reason for this process is to procure services for MKC, a secondary opportunity exists for MKSP to establish a framework agreement that would enable other local authorities to call off suppliers by way of mini competition. If MKSP does not decide to proceed with such an exercise, the option is available to call off another similar framework. 3. Consultation The draft specification will be developed in partnership with the relevant stakeholders. A review of the current / previous contract identified the following: 4. Specification essons learned The work involved in the performance management of five different companies has outweighed the benefits to the Council. The market has experienced some consolidation since the previous contracts were let and fewer companies with a larger share of the market now exist and there are a greater number that have the capacity to deal with larger volumes of work. (ii) Areas of change / improvement needed where highlighted Due to the change in law, a completely new specification is necessary to comply with it. 4.1 The procurement seeks to deliver the following service objectives: Ensuring compliance with current legislation in terms of the specification and code of practice. CPC, ITEM 6 20 OCTOBER 2014 PAGE 2

3 (ii) (iii) (iv) Nil cost to the Council in terms of service provision (statutory fees payable by debtors). Added value opportunities, such as reduced commission/nil cost for other services, such as training and sundry / other debt collection etc. Contribution by contractors to the management costs of the framework to enable MKSP to run the framework at nil cost to other authorities. (c) The new contract will be structured to deliver a nil cost contract to MKC and an income to MKSP from the management of the framework agreement for other local authorities. Public Services (Social Value) Act officers have considered whether this procurement can deliver any element of Social Value and do consider that some element will be achieved by the employment of enforcement agents who live locally. 4.2 Evaluation Criteria and Panel The Council will consider frameworks that have been evaluated in accordance with the requirements of the Service areas and Council Policies. Evaluation through call off will include the following specific requirements: Area* Evaluation Area Weighting (%) 1 Tender Price (by way of added value) 50% Nil cost contract, but some opportunity for added value services to be provided with a relevant cost saving. 2 Functional and Technical Compliance with the Specification and working methods 10% Mainly prescribed in legislation and therefore ability to vary is limited 3 Measuring Quality and Performance 20% Management information to ensure contract management is possible 4 Delivery 20% Outcomes to performance management 4.3 The Call Off process and evaluation will be undertaken by a panel comprising of Revenues & Benefits Service Delivery Manager, Head of Welfare and R&B Performance, Revenues Manager, Recovery Manager. Colleagues within Finance and egal and Corporate Procurement will be engaged to support the tender process. CPC, ITEM 6 20 OCTOBER 2014 PAGE 3

4 4.4 Contract Terms and Conditions Tenders will be sought for a framework agreement starting on 1 May 2015 and ending on 30 April The framework agreement will provide for an extension of 1 year ending on 30 April Project Management The Council s Project Manager for the procurement is Head of Welfare and R&B Performance. The Council s Senior Client Officer for the procurement is Service Director, Finance and Resources and for the management of the contract is Revenues & Benefits Service Delivery Manager. 5. Recommendation 5.1 Join an MKSP (or other supplier) Framework agreement. (ii) The most attractive framework for other local authorities to utilise (and so the one that provides the maximum commercial opportunity to MKSP) is one that has the most comprehensive market coverage and which then allows for mini competitions upon which a local authority may call off the most suitable contractors. It is recommended that the selection criteria to be based on successful contractors achieving a minimum level to be admitted. Authorities (including MKC) will then undertake a mini competition to call off from the framework agreement. 6. Alternative Options 6.1 The following options appraisal has been conducted: Do nothing, i.e. cease to provide the services Debt collection and enforcement is a requirement of the authority and forms a substantial part of the statutory function of local taxation under the ocal Government Finance Acts 1988 and 1992 and as such, this is not an option. Full Tender (Open or Restricted) The cross cutting nature of service areas included within this tender mean that this option is not considered appropriate. (c) Extend current contract The current contract has already been extended once and a further extension is not possible. In any event, due to the change in legislation, the current specification is out of date and requires updating to take account of the Council s approach to corporate debt. CPC, ITEM 6 20 OCTOBER 2014 PAGE 4

5 (d) Same as previous tender Due to the change in legislation, the current specification is out of date and no longer fit for purpose. 7. Implications 7.1 The procurement seeks to apply the Council s Income and Collection Policy. 8. Resources and Risk 8.1 Whilst the contract will be nil cost, the Council will save the cost of commissions currently being paid for recovery work undertaken by debt collection agencies. The Risk Assessment for this contract will be available if requested or directly via Members access to GRACE. In summary: The key OPPORTUNITY secured by this contract is effective debt recovery combined with possible income generation (if an MKSP framework is created and used by the Council). It is assessed that the delivery of this contract provides a ikelihood that will secure the opportunity defined providing MKC with a HIGH positive Impact. The key THREATS for this contract have been assessed as: Risk ikelihood Mitigation Impact after mitigation oss of MKC Revenue as held by third party Financial assessment of tenderers by Finance Team. Requirements of regular pay-overs. Ring fenced client account and contract management oss of income through poor performance Contract and performance management. Framework that allows for work to be recalled and redistributed to other suppliers in case of underperformance egal Challenge to actions of agent M Requirement for contractor to indemnify MKC against financial risk The governance measures set out in 4.5 above provide a basis to conclude that these threats, properly managed represent a OW likelihood with a HIGH Impact. N Capital Y Revenue N Accommodation Y IT Y Medium Term Plan N Asset Management CPC, ITEM 6 20 OCTOBER 2014 PAGE 5

6 8.2 Carbon and Energy Management 8.3 egal Not applicable The proposed procurement will comply with UK and EU legislation and the Council s Constitution. Any framework agreement created will be drafted which will comply with the Public Contracts Regulations 2006 and executed as deed between the Council and the framework providers once the procurement process has completed. 8.4 Other Implications Y Equalities/Diversity N Sustainability Y Human Rights N E-Government Y Stakeholders N Crime and Disorder N Carbon and Energy Policy Background Papers: None CPC, ITEM 6 20 OCTOBER 2014 PAGE 6