Agenda and decisions
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Contact: Rabiya Khatun
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Apologies for Absence Decision: There were no apologies. |
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Declarations of Interest Members are invited to consider the guidance which accompanies this agenda and make declarations as appropriate. Decision: There were no declarations of interest. |
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Urgent Business The Chair will consider the admission of any late items of Urgent Unrestricted Business which will be considered under the agenda item where they appear.
Decision: No urgent business was considered. |
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Notice if Intention to Conduct Business in Private and Representations Received On occasions part of the Cabinet Procurement and Insourcing Committee meeting may be held in private and will not be open to the public if an item is being considered that is likely to lead to the disclosure of exempt or confidential information. This is in accordance with the Local (Executive Arrangements) (Meetings and Access to Information) (England) Regulations 2012 (the “Regulations”),.
This agenda contains exempt items as set out following the Exclusion of Press and Public agenda Item.
No representations with regard to these have been received.
This is the formal 5 clear day notice under the Regulations to confirm that this Cabinet Procurement and Insourcing Committee meeting will be partly held in private for the reasons set out in this Agenda. Information) (England) Regulations 2012 (the “Regulations”), members of the public can make representations about why that part of the meeting should be open to the public.
Decision: No representations were received. |
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Deputations/Petitions/Questions At the time of the agenda publication none have been received.
Guidance o submitting a question to the Cabinet Procurement and Insourcing Committee can be found at: https://hackney.gov.uk/ask-a-question/#cabinet
Decision: No deputations, petitions and questions were received or heard by the Committee. |
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Unrestricted Minutes of the Cabinet Procurement and Insourcing Committee To confirm the unrestricted minutes of the previous meeting of Cabinet Procurement and Insourcing Committee(CPIC) held on 4 November 2024 Decision: Resolved:
That the unrestricted minutes of the meeting held on 4 November 2024 be approved as a true and accurate record of the proceedings. |
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CHE S439 Hackney Leisure Management Contract - Agency Agreement Decision: Resolved:
The Cabinet Procurement and Insourcing Committee approved:
1. The variation to the Leisure Management Contract between the Council and Greenwich Leisure Limited (“GLL”), for GLL to run the leisure centres as an agent rather than a principal for the remainder of the current contract term, as outlined in paragraph 5.1 of the report; and
2. Delegate authority to the Group Director - Climate, Homes & Economy in consultation with the Interim Group Director - Finance and the Director - Legal, Democratic & Electoral Services to agree the terms of and enter into all necessary legal documentation in relation thereto.
Options Appraisal and Business Case (Reasons For Decision)
Leisure Management Contract Agency Model
– Concept The Council’s Contract with GLL is a “traditional” (concession) leisure contract, where the Council leases the leisure facilities to GLL for a peppercorn rent, and GLL operates the facilities as principal providing the leisure services to the public. GLL retains the income from the leisure facilities and pays the Council an agreed share of any surplus generated.
As GLL provides the leisure facilities to the public as principal, the VAT liability of the sporting income is defined by GLL’s status. As an eligible body for the provision of sport, some of GLL’s supplies are exempt from output VAT and some are liable to output VAT at the standard rate. GLL is therefore required to undertake a partial exemption calculation to determine how much input VAT it is able to reclaim on the costs incurred in running the services. The irrecoverable portion of input VAT is incurred as a cost and is reflected in the costs of the services between GLL and the Council.
It is believed that up to 2023, the above arrangement represented the most VAT efficient route legally available, with the benefit of VAT exempt income outweighing the irrecoverable portion of input VAT.
However, following a court ruling in favour of local authorities and the determination that treating leisure services as non-business would not distort competition; HMRC issued Brief 3 in March 2023. The Brief makes it clear that a local authority' s income direct from users from the provision of leisure services can be treated as ‘non-business’ for VAT purposes, rather than ‘exempt’. This is the key change of circumstances from which the Agency Model opportunity is derived.
The change to HMRC policy potentially provides the Council, and its current partner GLL, with an opportunity to implement an arrangement, the ‘Agency Model’, with benefits to both parties by way of reduced costs, whilst protecting the Council’s risk position.
Under the Agency Model, GLL would become the Council’s agent for income collection. GLL would continue to commission / provide services and staff to run the centres. The Agency Model would result in GLL providing a standard rated, taxable service to the Council - that is the combination of the management of the leisure facilities and the provision of staff and services. This would then allow GLL to reclaim all of the input VAT it incurs ... view the full decision text for item 7. |
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CHE S420 Voids Utility Management Provision - Concession Contract Decision: RESOLVED:
That the Cabinet Procurement and Insourcing Committee approved:
The procurement of a Void Utility Management
provider under a concession contract to provide void utility
management services, at nil cost to the Council.
The Building Maintenance Voids team deals with c. 430 properties per year, updating, decorating and preparing Council properties to be re-let to Hackney residents. The Void co-ordinators spend a disproportionate amount of time ensuring the utility accounts for the previous resident have been closed down and any debt cleared, and then arranging the new supply for the incoming resident.
This activity was previously administered by British Gas up until 2021 before they ceased to provide the service. This has added an administrative burden to the Void team, with the net effect of increasing the length of time that a property is Voided. It is estimated that sourcing a provider for this activity could help return Void properties to market a week earlier.
As part of the service provided, we would expect the provider to ensure that electricity and gas meters are upgraded to the latest Smart Meter technology. This paper seeks permission to approach the market to find a supplier to provide this service on behalf of the Void team.
Due to the current cost of living crisis, the Building Maintenance service has seen an increase in the number of gas meters that have no credit on them, which prevents gas operatives from performing their annual gas appliance servicing compliance activity. They are then required to “Cap” the gas meter, which means the resident is not able to use any gas appliance (including the boiler), until the gas meter has been “uncapped” and the resident’s appliances serviced.
As part of this procurement we would seek a Void Utility Management provider that will provide support to vulnerable residents, to help reduce the number of gas meters that are being capped within Hackney’s housing portfolio. We would expect the provider to work with the resident who finds themselves in financial difficulty, signposting to relevant support services including the Financial Inclusion team at Hackney Council.
The chosen provider will be in a position to offer their gas & electricity supply product to the resident, benefiting financially from being the chosen provider, hence the reason for this being a concession contract. The resident will still retain the option to contract with a provider of their choice and not the provider that gets awarded this contract. This is a risk that the selected provider will need to contend with.
An initial search of the market place has identified that there are a few providers that offer Void Utility Management services, however it is unclear how many provide additional support to vulnerable residents, which is a key requirement for this procurement exercise.
Preferred Option
Going to market to find a Void Utility provider, who will also provide support for vulnerable residents, is a key requirement to move the Building Maintenance Void service forward. The specialised nature ... view the full decision text for item 8. |
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CHE S395 Clissold House Cafe Procurement Decision: RESOLVED:
That Cabinet Procurement Insourcing Committee approve:
The award of a concessions contract and a
lease (relating to the operation of a concession at the
Clissold House Cafe and the occupation
of such premises) to Operator A for a period, in each case, of 5
years (with an option exerciseable by
the Council to extend the term by a further 2 years), with the
contract commencing in February 2025. Note that a Low Risk Business Case requesting approval to carry out the procurement process was signed by the Director of Environment and Climate Change on 11 June 2024.
Reason(s) For Decision / Options Appraisal
One of Hackney's best loved parks, Clissold Park was opened in 1889 and has held a Green Flag award since 2006. Green Flags are awarded annually to the best green spaces in the country. Clissold Park and House were renovated in 2011 as part of an £8.9 million Heritage Lottery Fund restoration project. Clissold House ?is a Grade II* listed building in the middle of Clissold Park that hosts community bookings, weddings, meetings and parties.
The cafe was previously operated by Deep Beat Entertainment who went into administration and ceased operating in Spring 2024. When operating, the cafe is open to the public seven days a week (except Christmas Eve and Christmas Day) from at least 8.30 a.m. – 4 p.m. As well as being a popular destination for park users, the cafe contributes income to the Parks and Green Spaces Service, helping to pay for the maintenance of Clissold Park and other green spaces across Hackney.
The contract with the current service provider ended in November 2024, and a new operator is required to run the cafe from February 2025 for a period of five years, with the potential to extend for two years.
Alternative Options
(Considered and Rejected) As part of the Business Case approved prior to the procurement process, the following options were considered:
In-sourcing the catering provision was deemed to be unfeasible for this service. An in-sourcing report has been appended to this report in Exempt Appendix 3.
Do nothing – the previous caterer has gone into administration and is no longer operating in Clissold House. This is therefore not an option. |
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Additional documents:
Decision: RESOLVED:
That Cabinet Procurement and Insourcing Committee note the report. |
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Exclusion of the Public and Press Note from the Governance Team Leader:
Agenda Item(s) 13 and 14 allows for the consideration of exempt information.
Proposed Resolution:
That the press and public be excluded during discussion of the remaining items on the agenda, on the grounds that they involve the likely disclosure of exempt information as defined in those paragraphs of Part 1 of Schedule 12A of the Local Government Act 1972.
Decision: RESOLVED:
The press and public be excluded from the proceedings of the Cabinet Procurement Committee during consideration of Exempt items 10 - 13 on the agenda on the grounds that it is likely, in the view of the nature of the business to be transacted, that were members of the public to be present, there would be disclosure of exempt information as defined in paragraph 3 of Schedule 12A to the Local Government Act 1972 as amended. |
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Urgent Exempt Business The Chair will consider the admission of any late items of Urgent Exempt Business Decision: No urgent exempt business was considered. |
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Exempt Minutes of the Previous Meeting of the Cabinet Procurement and Insourcing Committee
To confirm the exempt minutes of the previous meeting of Cabinet Procurement and Insourcing Committee held on 4 November 2024 as an accurate record Decision: Resolved:
That the restricted minutes of the meeting held on 4 November 2024 be approved as a true and accurate record of the proceedings.
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CHE S439 Hackney Leisure Management Contract - Agency Agreement EXEMPT Appendix 1 Decision: Exempt. |
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CHE S395 Clissold House Cafe Procurement EXEMPT Appendices 1-3 Decision: Exempt. |