Enforcement – Sharing the Experience 27 th May 2009

1. AGENDA ITEM - 4 Enforcement – Sharing the Experience 27th May 2009 Alastair Gilchrist - PiP Management Committee Chairman Clive Burley - PiP Programme Manager

2. Enforcement – Sharing the Experience • Seminar held on 27th May at City of London to explore current Enforcement procurements and contract issues. • 8 PiP Partners attended – Camden, City of London, Croydon, Enfield, Hackney, Lambeth, RBKC and WCC. • Camden, Ealing, Enfield, Newham, Wandsworth, WCC all procuring.

3. Enforcement – Sharing the Experience Themes Explored • Supplier relationships • Current state of the market • Procurement strategies • Innovation & Efficiencies • PCN levels & CEO Roles • Future Developments

4. Enforcement – Sharing the Experience Supplier Relationships • Variable, some good, some bad – even with same supplier. • No consistency by same supplier to different Boroughs. • Simple information not provided, failure to respond to information requests. • Failure to pay on KPIs/Defaults, legal action. • Suppliers have to be ‘micromanaged’ and pushed hard to get results. • PCN/CEO quality variable. • PCNs down – costs stay the same.

5. Enforcement – Sharing the Experience Current State of the Market • The big three dominate - NSL, APCOA, Vinci. • Newcomers – Mouchel, Mitie. • Others – Town & City, Legion – niche markets. • Profit margins getting slimmer, little room for further efficiencies, large players have achieved economies of scale. • New entrants ‘double whammy’ – higher costs & no track record. • Efficiencies, pressure on wages, increased ‘churn’ with negative impact on PCN quality and overall costs. • KPIs hurt - contract relationships become combative. • PCN levels decreasing, approaching break even point.

6. Enforcement – Sharing the Experience Procurement Strategies • Contract length varies between 5 and 12 years with extensions. • Standard two stage OJEU approach except WCC using ‘Competitive Dialogue’ for first time with output based approach. • Post TMA shift from PCN targets to Schedule of Rates call off. • Intelligent Deployment, Compliance based, KPI & Default heavy. • Takes two years to procure, ‘red tape’ increasing. • Procurement Units & Delivery Team tensions not helping. • Croydon ‘In House’, wants to link On Street with Back Office performance. • ‘In House’ too costly for most, no going back. • Varied bundled contracts for the most part. • BPA Model contract needs adapting – Hackney, RBKC & Camden.

7. Enforcement – Sharing the Experience Innovation & Efficiencies • CEOs will TUPE over, only management will change, What are we investing in? Another supplier has to be better than the last one? • Labour supply contract. • Are there any fixed costs left to remove? • Little scope to innovate, scale economies already achieved. • Some increasing CCTV enforcement but not liked by some. • CCTV Head Cams - mixed views, costs & benefit needs working up. • ANPR possible but dependent on effective IT solution. • Annual contract reviews & efficiencies– RPIX, capped, negotiated, open book, profit share. • No year on year % reductions.

8. Enforcement – Sharing the Experience PCN levels & CEO Roles • PCN levels falling – estimated 15% this year. Congestion Charge. • Some outer Boroughs increasing as develop more CPZs. • PCNs dropped post TMA, no targets. Micromanage CEO productivity. • Higher levels of suspensions, Bay reductions, Car Clubs. • Fair but Firm and Quality drivers. • Who is going to pay for enforcing Olympic Routes? • CEO roles increasing TMA+, Street as a single function. • Some Boroughs doing Street defects, Environmental reporting. • Concern over shift to soft issues not PCNs. Hasn’t worked for some. • Technology concerns about TMA+.

9. Enforcement – Sharing the Experience Future Developments & Recurrent Issues • Sharing the Back Office, no out-sourcing, retain quality - RBKC & H&F. • Relocate Back Office but stay in-house – Islington. • ALMO type company – not progressed despite interest - WCC. • Greenwich Leisure – management buy out. • PiP Contract - differing needs, timelines and EU legal hurdles? • PCN/CEO quality + Firm But Fair reducing income versus need to maintain revenue streams. • CEO ‘Churn’, Limited market, Delivering quality. • Limited technology solutions, CCTV not for all.

10. Enforcement – Sharing the Experience Recommendations • Supplier Relationship Management - Establish a NSL User Group as part of the PiP Management Committee to share experience, knowledge and develop common approaches to contract management. Develop capacity for concerted action. • People Dynamics – Progress study into Measuring the Work Related Well-Being Study of CEO Attrition & Absence (Agenda Item 5). • Contract Performance Measures – Initiate project to map Partner Enforcement contract KPIs and Defaults with a view to converge and streamline (Agenda Item 6).

11. Any Questions?