ACTION TAKEN UNDER DELEGATED POWERS BY OFFICER

Transcription

1 ACTION TAKEN UNDER DELEGATED POWERS BY OFFICER Title Implementation of Capita Employee Benefits Platform (Orbit) Report of Wards Status Interim Chief Executive All Public ( separate exempt report) Enclosures None Officer Contact Details Liz Hammond, HR Strategic Lead, Commissioning Group, liz.hammond@barnet.gov.uk Summary On the 21 March 2016 the General Functions Committed resolved to provide authority for the Interim Chief Executive and or for Human Resources to investigate the provision of a comprehensive benefits scheme. On 1 December 2016 the Policy & Resources Committee authorised, via the Annual Procurement Forward Plan 2017/18, procurement of an benefits scheme via a multiple services call-off requirement and the licence fees Decisions 1. That the Council enters into contracts the organisations listed in section 1 of the report for one year from 1 April That the Council implement the Employee Benefits scheme via Orbit provided by Capita Employee Benefits.

2 1. WHY THIS REPORT IS NEEDED 1.1 As part of the NSCSO contract agreed by the Council s Cabinet in 2012 one of the HR contractual commitments was to implement an benefits solution called Logbuy. This particular benefits solution would have enabled s to benefit from a range of on-line retail savings. Logbuy is not a sophisticated flexible benefits platform that enables s to purchase goods under a salary sacrifice arrangement. As Logbuy had not been implemented by the time discussions were taking place on Unified Reward the introduction of an benefits scheme became integrated into the Unified Reward offering to staff. The introduction of benefits was part of the Unified Reward proposals and would complete and complement the total reward offering. 1.2 Employee benefits are now seen as an integral part of the reward offering by organisations and are a competitive recruitment and retention tool that provides s attractive offers and savings. A proposal was put forward by Capita to implement a more comprehensive Employee Benefits scheme which would enable the to either pay for benefits directly or pay via a salary sacrifice arrangement. The range of benefits that would be available to council officers and school s is extensive and includes: Shopping benefits such as Retail Vouchers, Technology Purchases, Household Products and Salary Sacrifice Cars. Health options such as; Health Screening, Gym membership and Cycle to Work. Insurance options such as: Personal Accident, Travel, Private Medical, Life Assurance and Dental insurance. Charitable giving; and Childcare vouchers. 1.3 On the 21 March 2016 the General Functions Committed approved the Unified Reward proposals which included the provision of a comprehensive benefits scheme and resolved to provide authority for the Interim Chief Executive and or for Human Resources to investigate the provision of a comprehensive benefits scheme (subject to the conditions outlined in the report) to be introduced effect from 1 July Following the decision of the General Functions Committee, the Commercial Team considered Capita s Orbit benefits scheme and requested Capita to develop detailed proposals relating to the scheme as a whole including the type of benefits available, contractual issues, potential National Insurance (NI) savings and gain share arrangements. 1.5 At the Policy and Resources Committee on 1 December 2016 the Committee agreed the Council s Annual Procurement Forward Plan for 2017/18. Within Appendix 1 of the report the Committee authorised entering in to contracts up to a value of 470,011 for an benefits scheme (via a multiple

3 services call-off requirement and licence fees) a procurement start date of 1 January 2017 and a contract start date of 1 April The Capita Employee Benefits solution proposed (Orbit) has a more comprehensive benefit offering and enables the to either pay for benefits directly or pay via a salary sacrifice. Employees will benefit from the buying power of a benefit provider to purchase cost effective products and services at reduced prices and/or through salary sacrifice arrangement and the Council benefits from a reduction in employer National Insurance contribution for those benefits bought through a salary sacrifice arrangement. 1.7 The following change to the CSG contractual commitments was completed to ensure that the council could implement a comprehensive benefits solution; It is proposed that an discount solution is implemented to coincide Unified Reward becoming operational. This is so that it is seen to provide benefits to the as part of the new terms and conditions package. LogBuy offers a range of discounts at major high street retailers. Capita will also put a proposal to the Council for an enhanced market leading benefits solution which they may want to implement instead of LogBuy. Either product will be delivered as part of the Unified Reward roll out and their commitment to the Employee Portal investment 1.8 The following benefits require the council to enter into a contractual relationship the benefit provider and if an requests one of these benefits the Council will pay a monthly or annual amount upfront and recoup the amount from the s salary over an agreed period of time. Employees when committing to benefits will be authorising the Council to deduct from their salary monthly and in the event that they should leave the council s employment before the benefit has been fully repaid, authorising the council to take the remainder outstanding from their last month(s) salary. - Cycle to Work (provider Halfords via Akira Finance) - Child Care Vouchers (provider Fideliti) - Technology Products (provider Stormfront) - Gymflex (provider Incorpore) - Car Scheme (provider Zenith) 1.9 The following companies will have a direct relationship the and any financial transactions required will be paid directly from the s salary: - Health Assessments (Bluecrest) - Critical Illness Cover (Unum/LIME - Dental Insurance (Denplan) - Healthcare Plan (Axa) - Travel Insurance (ACE) - Personal Accident (Westfield) - Charitable Giving (GAYE)

4 1.10 The following company will have a direct relationship the and financial transactions are paid directly by the : - LG Benefits (LG) 1.11 It is difficult to predict what the take-up of each benefit will be but statistics for similar schemes can be used to gauge the take up the Council can expect. The Council already run a childcare voucher scheme and have done so for a number of years. Take up by Council staff for 2015/16 amounted to 443,455. The following table provides an estimate of take up, generating a monthly outlay that is required by the Council who will then immediately re-coup these amounts from the payroll of those staff who commit to participate. Benefit Implem entation date* Exp % take up (based on national figures) Exp No. of staff ** Council in contract - name of supplier + (contract length) Average spend Total cost Any fixed costs Total exp monthly Expendi -ture Cycle to Work Mar 17 6% 472 Halfords (Akira Finance) (1 Year) 450 pp (2 year contract) 212,787 N/A 8,866 Child Care Vouchers Mar 17 10% 788 Fideliti (1 year) 443,455 in 15/16 443,455 16,758 36,954 Health Assessments Jan 17 3% 236 Bluecrest (1 year) Critical Illness Cover Jan 17 14% 1,20 3 Unum (1 year) Dental Insurance Jan 17 17% 1,33 9 Denplan Healthcare Plan Jan 17 3% 236 Westfield Travel Insurance Personal Accident Jan 17 10% 788 Chubb (ACE) Jan 17 Jan Chubb (ACE)

5 Benefit Implem entation date* Exp % take up (based on national figures) Exp No. of staff ** Council in contract - name of supplier + (contract length) Average spend LG products Jan 17 4% 315 LG Technology Products Total cost Any fixed costs Total exp monthlye xpenditure Mar 17 4% 315 Stormfront 300 pa ,916 Retail Vouchers Jan 17 6% 472 SVM 1,500 pa 708, ,000 Gym Membership Mar 17 4% 315 Gymflex (Incopore) 420 pp pa 132, (1 year) Car Scheme Mar 17 8% 630 Zenith (3 years) 14,000 (3 year contract) 8,820,00 245,000 Charitable Giving Jan 17 3% 236 Charities Trust (1 year) Total 17, ,736 * Implementation date refers to the date the benefit is available to the and the first salary deduction is taken ** Exp no of staff refers to an anticipated take up by 7,880 Council Officers and school staff 2. REASONS FOR DECISIONS 2.1 Employee Benefits is an integral part of the total reward offering for most medium to large businesses and as such there is an expectation that the Council as a large employer would have such a scheme in place. Employee benefits are considered an important tool to attract and retain staff. 2.2 Capita Employee Benefits are a well-known supplier and the proposal to implement benefits in partnership Capita is a cost effective option for the Council. The implementation of any alternative solution would have required an upfront investment by the council of approximately 200,000. By implementing Orbit, Capita will fund the upfront implementation costs and first year licence fees, which no other provider would do. 2.3 The licence fee for Orbit has been discounted, thus demonstrating that Capita s original commercial commitment to implement Logbuy has not been overlooked and providing the council a significant reduction on year on year licence

6 fees for a far superior product. The financial arrangements are considered to be commercially sensitive and are set out in an exempt report. 2.4 Employee benefit schemes are typically implemented on a piecemeal basis in order to keep the scheme live and fresh by introducing new benefits on a periodic basis. By working in partnership a supplier such as Capita this enables the Council to refresh the benefits on offer on a periodic basis, as benefits coming onto the market vary over time. The council will therefore be able, on a regular basis, to alert its s to new offers, thus generating continual interest in the scheme on an ongoing basis. Any new contractual arrangements entered in to will be compliant the council s Contract Procedure Rules. 2.5 Employee Benefits providers are committed to continually reviewing their benefits through a competitive procurement process a buying power that the council on their own could not expect to replicate. Capita Employee Benefits host their own benefits platform, known as Orbit, branded for council staff and relieves the council from the hosting and maintenance of an online portal that the council would not have the capability to provide. 3. ALTERNATIVE OPTIONS CONSIDERED AND REJECTED 3.1 Alternative Option 1: Do nothing. A consequence of not providing council s an benefits solution could affect the council s ability to attract the right skills and hinder retention as competing employers offer more attractive benefits. 3.2 Alternative Option 2: Implement the original CSG HR commitment to roll out Logbuy which is considered: a much inferior product, is limited in its offering and can arguably be criticised as achieving nothing more than an individual could achieve themselves by searching the internet for offers; would not enable s to gain salary sacrifice NI savings on a number of popular benefits would not enable s to get the benefit of a large benefit providers buying power in a competitive market 3.3 Alternative Option 3: Implement Orbit out being in partnership Capita. This would not be a fully funded option and would require significant up-front investment by the Council. 4 POST DECISION IMPLEMENTATION 4.1 The Capita Employee Benefits scheme (Orbit) will be made available to council and schools s immediately. 4.2 To ensure that the scheme remains competitive and represents value for money, the benefit offering will be regularly reviewed by the HR or and

7 the Council HR Strategic Lead a view to recommending to Workforce Board any additions to the portfolio and changing or removing providers/products if they are not remaining competitive in the market place. Scheme performance will be reported quarterly to Workforce Board who will monitor the take up of benefits and make any recommendations for changing benefits or benefit extensions to an Officer the delegated authority to approve. 5 IMPLICATIONS OF DECISION 5.1 Corporate plan The Council Corporate plan for 2015/16 strategic objectives are based on fairness, opportunity and responsibility a specific objective to provide council staff a more flexible and modern workplace. The aim of Unified Reward was to achieve a pay and reward system that is simpler, fairer, more flexible and rewards performance. Employee benefits as part of the reward offering for staff therefore supports the corporate plan strategic objectives for staff The council also has an objective to provide staff a healthy workplace. The council has achieved excellence level of the London Healthy Workplace Charter and the benefits offering provides staff access to a range of health and wellbeing benefits which includes salary sacrifice on a cycle to work scheme, dental insurance, health assessments, healthcare plan, critical illness insurance, personal accident insurance and gym membership. 5.2 Resources (Finance & Value for Money, Procurement, Staffing, IT, Property, Sustainability) The benefits portal will provide council s opportunities to purchase benefits that they would otherwise not have access to and the opportunity to purchase these through salary sacrifice arrangements in some instances. The salary sacrifice benefits enable the council to generate employer NI savings and if take up reaches predicted norms the savings generated will cover the ongoing licence fee and potentially generate a surplus. The detail of this is commercially sensitive and has been set out in a separate exempt report Extensions and variations will take place as each contract ends. The council will evaluate each contract a view to varying, extending or choosing another provider to continually ensure that s are getting the best value for money. Any decision to modify or change benefits will be taken by an officer the delegated authority to do so Capita Employee Benefits (Orbit) is the action for the following reasons: Capita already had a commitment to deliver Logbuy and as a result the financial offer on year on year discount licence fees from Capita is better than the council could achieve elsewhere

8 Capita already run the council s payroll therefore generating cost savings over another provider and the cost implications of Capita having to make a significant number of monthly payroll deductions. 5.3 Legal and Constitutional References Council Constitution, Responsibility for Functions, Annex B, Scheme of Delegated Authority to Officers details that chief officers can take decisions in matters where they have managerial or professional responsibility Council Constitution, Responsibility for Functions, Annex B, Scheme of Delegated Authority to Officers provides that Chief Officers may use whatever means they consider appropriate to discharge those functions in their scheme of delegation, including: deploying other resources in their control; placing contracts and procuring other resources in or outside the Council The detailed proposals as set above represents the implementation of decisions taken by the General Functions Committee and Policy & Resources Committee to deliver an benefits scheme Council Constitution, Contract Procedure Rules, Authorisation and Acceptance Thresholds state that for contracts a value in excess of 164,716 authorisation is via a relevant theme committee report or the Procurement Forward Plan and acceptance is via a Full Officer DPR if in budget. The proposals set out in this report are compliant these provisions Under the benefits scheme notifying HMRC is not a legal requirement, it is listed as a precautionary measure. Further work is being undertaken by colleagues and we will inform HMRC at the earliest opportunity. 5.4 Risk Management The procurement of benefits is unlikely to raise any significant levels of public concern Compared to the two alternative options outlined in section 3, this proposed contract represents the lowest risk option The year 1 licence fee and implementation costs are being funded up front by Capita but the Council have underwritten this amount in the event that the employer NI savings do not cover these costs.

9 5.5 Equalities and Diversity All directly employed staff in the council will be able to participate in the benefits on offer. Community schools staff will also be able to participate provided that their payroll provider is Capita. All individuals will be free to make their own choices and selection and also able to choose not to participate if they do not wish to. No diversity strand will be negatively impacted and all will have the same opportunity. For lower paid staff or those who may receive benefits, if making a salary sacrifice could have a negative impact for them, this will be highlighted to them, the implications explained so that they understand fully if there is a negative impact. 5.6 Consultation and Engagement Full consultation staff and the Unions has been undertaken as part of the Unified Rewards consultation and negotiation process. A series of negotiation meetings the trade unions took place between October 2015 and February The Council ran a full consultation process affected staff which closed on the 8 th March A collective agreement was signed on the 31 st May BACKGROUND INFORMATION 6.1 General Functions Committee, 21 March 2016, Unified Reward the Committee agreed the Unified Reward proposals including the provision of an benefits scheme. The Committee resolved that: the Council investigate the provision of a comprehensive benefits scheme subject to the conditions outlined in paragraph 38, to be introduced effect from 1st July 2016 (paragraph ). Section (m) Employee Benefits stated: Modern employers now routinely offer a range of non-salary benefits, such as childcare vouchers, high street discounts and vouchers, discount leisure opportunities, car and bicycle loans and discounts and the trading of annual leave. It is proposed that the Council provide a comprehensive benefits offer subject to viability and it being at no cost to the Council. DECISION TAKER S STATEMENT 7.1 I have the required powers to make the decision documented in this report. I am responsible for the report s content and am satisfied that all relevant advice has been sought in the preparation of this report and that it is compliant the decision making framework of the organisation which includes Constitution, Scheme of Delegation, Budget and Policy Framework and Legal issues including Equalities obligations.

10 8. OFFICER S DECISION I authorise the following action: 8.1 That the Council enters into contracts the organisations listed in section 1 of the report for one year from 1 April That the council implement the Employee Benefits scheme via Orbit provided by Capita Employee Benefits Signed John Hooton, Interim Chief Executive Date 22/12/2016