PART 1
(OPEN TO THE PUBLIC)
ITEM NO.
JOINT REPORT OF THE LEAD MEMBERS FOR EDUCATION, SOCIAL SERVICES
AND ENVIRONMENTAL SERVICES
TO THE CABINET ON 2nd OCTOBER, 2002
Subject:
BEST VALUE REVIEW OF HOME TO SCHOOL AND SOCIAL
CARE TRANSPORT – INTERIM REPORT
RECOMMENDATIONS:
That members approve in principle the establishment of a single Passenger Transport Unit
in Salford and that a further detailed report be prepared for consideration in February 2003.
EXECUTIVE SUMMARY:
This report seeks approval to continue with work on the development of a single Passenger
Transport Unit to support both home to school arrangements and social care arrangements.
BACKGROUND DOCUMENTS:
Environmental Scrutiny Committee
Environmental Scrutiny Committee
Environmental Scrutiny Committee
Transport Best Value Review Scrutiny Panel Meeting
CONTACT OFFICER:
Lynn Wright
Assistant Director
WARD(S) TO WHICH REPORT RELATES:
KEY COUNCIL POLICIES:
DETAILS: Continued overleaf
Best Value
16th July 2001
17th December 2001
18th March 2002
18th April 2002
TEL NO: 0161 778 0132
All
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REPORT DETAILS
1
PURPOSE OF REPORT
1.1
The purpose of this report is to investigate the benefit to Salford City
Council of co-ordinating it’s passenger transport services and integrating
the management and procurement of its activities into a centralised
Passenger Transport Unit.
1.2
It also examines encompassing the vehicle licensing and enforcement
function within the single Transport Unit.
2
RECOMMENDATION
2.1
It is recommended that the establishment of a single Passenger Transport
Unit in Salford be approved in principle, and that a further detailed report
be prepared for consideration in February 2003.
3
BACKGROUND
3.1
As part of the Best Value review of Home to School and Social Care
Transport Services in Salford the review team has considered the way in
which transport services are managed and investigated alternative
approaches that could improve the efficient delivery of the service.
4
CURRENT ARRANGEMENTS
4.1
Currently, the Education and Leisure Directorate and the Community and
Social Services Directorate are each responsible for managing their own
transport. Brief details of each Directorate’s responsibilities are given
below.
4.2

delivering the City Council policy

holding the budget

determining eligibility

determining the standards of transport provision

authorising and arranging transport

managing the service

liaising with service users, parents, carers, establishments and
operators
In addition, the Community and Social Services Directorate is responsible
for managing its own fleet of 31 passenger carrying vehicles and 20 goods
3
vehicles and Environmental Services hire vehicles from external operators
for a wide range of groups.
4.3
Central Purchasing undertakes the tendering process on behalf of the
Education and Leisure Directorate, who schedule the routes to be tendered
and the Community and Social Services Directorate with regard to the
Schedule of Tendered Taxi Operators.
4.4
Although there is communication between the different sections, there is
little coherent vision on transport issues, as each works to the individual
core requirements of its own directorate. This situation requires the
deployment of common (specialised) skills in several locations, although
the workload in each of these locations makes it difficult to justify the
employment of several transport specialists.
4.5
This approach makes it difficult for the authority to meet its transport coordination obligations under the Transport Act 1985, which puts a duty on
public transport, education and social service authorities to co-operate
with one another to secure the best value for money overall in their
transport provision. Currently, this is done as well as possible within the
constraints of the 2 Directorates working independently. In addition, there
is increasing pressure to improve quality, driven by heightened
expectations of service users and legislation. If internal standards do not
keep pace, the Council could find itself open to claims of negligence.
4.6
Furthermore, the commissioning of external transport by numerous
different officers on an ad hoc basis obviates opportunities for coordination of vehicle use, or for cost savings arising from bulk purchasing
or use of corporate call-off contracts.
4.7
There are, therefore, efficiency savings to be made compared with the
current situation, both in terms of the efficiency of transport procurement
and the more efficient use of professional staff on areas of work more
suited to their profession, e.g. qualified social workers spending time on
social services work as opposed to arranging transport. These, coupled
with improvements in terms of communication and ‘joined-up thinking’,
can produce real benefits for the authority. Perhaps the greatest potential
benefit, however, lies in the service quality improvements, which such a
specialist unit can bring.
5
GOOD PRACTICE
5.1
The Audit Commission’s 1991 report into home to school transport
identified four key roles in delivering an efficient, effective, well managed
and focused school transport service:

policy maker

budget holder

transport organiser
4

transport provider
5.2
It suggested there should be an unambiguous separation between these
roles. The separated model of the centralised Unit conforms most closely
to this, with the Unit acting as the transport organiser.
5.3
It should also be noted that the model of a comprehensive, authority-wide
integrated Passenger Transport Unit is favoured by the Audit Commission,
and is quoted as representing good practice in its recent reports1 on best
value in local authority transport functions.
6
CENTRALISED TRANSPORTATION UNIT
6.1
Procurement of all external transport by one Unit will provide benefits to
the authority both through the holistic treatment of transport issues, and
through the creation, pooling and application of specific transport
expertise on a scale that cannot be justified within a single discipline or
department. It may also result in a reduction in the overall cost of
Salford’s transport, because of:

more rational planning

more cost effective procurement, economies of scale in the
tendering process

greater purchasing power

improved technical support

more comprehensive market knowledge

deployment of cost-saving techniques, such as –

6.2

call-off contracting (for ad hoc journeys, against a
predetermined schedule of rates)

resource contracting (flexible scheduling for regular
commitments)
more opportunities for vehicle sharing, and operation of fewer
duplicated journeys
Examples of the benefits that may be achieved by an integrated unit
include the ability to co-ordinate disparate tenders. If the potential operator
has to tender separately for (say) a home-to-school contract, swimming or
playing fields runs and some ad hoc social services outings – then:
‘Going Places: Taking people to and from education, social services and healthcare’ (Audit Commission,
Nov 2001); ‘All Aboard: A review of local transport and travel in urban areas outside London’ (Audit
Commission, Mar 1999)
1
5

administrative workload is greater – perhaps to the extent that the
operator does not actually get round to tendering at all for some
work which he could do;

the various contracts may well be for different periods, obviating
any economies from inter-working;

if the operator wins one contract, there is no assurance of winning
any others – therefore each tender will have to carry the full
indivisible costs of the resources necessary to fulfil that contract.
6.2
On the other hand, the integrated unit can bundle together requirements
from different Directorates, to create a whole day’s work for the vehicle(s)
and driver(s) involved over a single contract period. This is not only tidy
and efficient for the contractor but, most importantly, reduces his
uncertainty and risk – and therefore encourages both lower-margin pricing
and investment in better quality vehicles, equipment and training.
6.3
In similar vein, there is neither a mechanism nor the incentive for staff
within service Directorates – to whom transport is an ancillary function –
to improve utilisation of the surplus, or ‘downtime’, capacity of the
vehicles they currently use. Meanwhile, irregular and optional transport
requirements are planned independently, without reference to the capacity
that may already be available at marginal cost. In contrast, an integrated
unit has both the expertise and interest in making the most effective use of
all the transport resources employed by the council, and can actively
market spare capacity to potential customers. This can spread the core
contract and administrative costs over a larger workload, and provide ad
hoc services at lower, marginal cost.
6.4
A further benefit is the impetus given to consideration of the full range of
local transport interests in each planning or procurement decision made by
the City Council. In an isolated environment, for example, it is not
surprising if decisions are made that take no account of potential benefits
for other Directorates. Such cross-cutting issues can be more easily
appreciated and considered within a co-ordinated unit, and this issue is
likely to grow significantly in importance with ever-increasing emphasis
on decentralised and disparate models of service provision to social
services clients and schoolchildren with special needs.
6.5
This corporate appreciation may be reflected in amendments to the design
of individual services in order better to meet the requirements of another
client group, or it may lead to innovative procurement relationships.
6.6
The Passenger Transport Unit will function most effectively if separated
from its main client Directorates. The bringing together of all passenger
transport within one Unit would remove the duplication of functions
occurring in procurement of external transport. The staffing of the Unit
would need to reflect the workloads and specialisms involved, but will
enable professional staff, in each Directorate, to spend more time on their
areas of specialisms.
6.7
The main duties of the Passenger Transport Unit would include:
6

arranging all home to school, recreational and Social Services
transport (Central Purchasing would continue to carry out the
tendering process, as at present),

vetting and training of drivers and passenger assistants (whether
in-house or contracted)

operational monitoring

management of the in-house transport fleet

hiring vehicles from external providers for authorised groups
6.8
In addition, there may be benefits from including the City Council’s
vehicle licensing and enforcement function within the Unit. Taxis and
private hire cars form an important and flexible mode of passenger
transport. The transport of children and adults with special needs also
necessitates significant use of these vehicles. It is fundamental to the
operation of safe, reliable and good quality services that there is an
adequate supply of appropriate vehicles and operators of a high standard
in the Salford area. It makes sense, therefore, for taxi policy and licensing
to be located within an integrated unit, so that these activities can be
aligned with the promotion of corporate objectives through procurement.
Likewise, synergies are possible with the enforcement functions for other
transport services, suggesting that these should also be integrated.
6.9
Care needs to be taken to ensure that, in exercising its regulatory powers,
the council acts fairly, and does not seek to distort the taxi market to serve
its own ends. This may necessitate some formal separation of the licensing
and procurement functions, but any distrust will principally be overcome
by transparency and fairness in procedures, and the forging of constructive
relationships with the local trade.
6.10
Whilst, there may be advantages in including the licensing and
enforcement function within the Unit, this would need further
investigation and would not, therefore, be considered initially but rather as
a second phase in the development of the Unit.
6.11
In some authorities, assessment of pupils’ eligibility for home to school
transport has been transferred to the Passenger Transport Unit, working to
policies established by the Education Committee. This may apply only to
mainstream pupils, using software for distance measurement, which is
usually available in transportation departments, or to special needs pupils
as well. The latter is less usual, however, as qualitative judgements are
often required from educational professionals – and budget responsibility
normally remains with the SEN section. Appeals often remain the domain
of the Education Service, as well. This option is often finely balanced, and
may turn on the availability of administrative capacity remaining in
education’s transport client team.
6.12
Transfer of the procurement and management of in-house passenger
vehicles, with the exception of the tendering process, to a Passenger
Transport Unit would remove the burden of these technical functions from
7
the client departments. This would have benefits in aligning vehicle
specifications with operational needs, securing compliance with legal and
‘best practice’ requirements, and providing assurance of these to the
authority.
6.13
Removing many of the transport responsibilities of Community Services
staff would enable social workers and care managers to concentrate on
their core roles, rather than spending time on managing drivers or
vehicles. However, experience from elsewhere suggests that there are also
two significant qualitative issues for establishment managers:

they are anxious to escape the ‘hassle’ involved in ensuring the
reliable operation of this ancillary service, which has the potential
to disrupt busy schedules with time-critical events (such as
breakdown or staff failure)

they do not have sufficient expertise in the control of transport, and
this has two effects which often concern the managers themselves
–

they cannot assure high operating standards

they spend disproportionate amounts of time solving
transport problems.
6.14
Transferring the in-house fleet to the Passenger Transport Unit will also
help to ensure that in-house vehicles are managed from a corporate
perspective, and enable more efficient scheduling of resources. It will also
help to ensure that consistent standards of training are in place for drivers
and passenger assistants.
6.15
The formalisation of co-ordinated responsibility for passenger transport
also often recognises a need for many of the ‘softer’ issues – such as staff
training, contract standards and compliance monitoring – to be positively
addressed, in addition to the potential for greater sharing of resources to
maximise both cost-effectiveness, and access by the community.
6.16
Given the pressure on staff and resources generally, and the tendency of
all services to target ‘non-core’ activities for expenditure limitation or
reduction in such circumstances, appropriate changes will often not occur
if full control of transport specification and procurement is retained within
the individual services. It is therefore necessary to consider the more
radical options if the appropriate change in transport culture – and its
concomitant benefits – is to be achieved.
6.17
The centralisation of services can create concerns over loss of autonomy
within Directorates and a possible distancing of administrative personnel
from the real issues experienced locally. However, experience in other
local authorities that have pursued the co-ordinated approach does suggest
that concerns are, on the one hand, generally exaggerated whilst on the
other hand, they can be overcome if the Unit takes positive steps to do so.
Service Level Agreements
8
6.18
Some of the communication arrangements can be formalised and set out
clearly in the Service Level Agreements. Under the SLAs the Passenger
Transport Unit could be required to:

arrange the core transport (home to school or college, home to
centre) for all individuals identified as eligible by the client
Directorates, by the most appropriate method to achieve best value
for money

arrange transport for other needs as requested by the client
Directorate centrally, or where specifically delegated, by individual
establishments

co-ordinate alternative transport arrangements in the event of
failure, breakdown or emergency

ensure that, in the case of any passengers with special needs, that
appropriate technical and staffing provision is made, consistent
with safe and cost-effective operation

develop appropriate charters (with the client Directorates) and
provide information to passengers, their carers, operators and
establishments

arrange for the provision of suitably qualified and trained
passenger assistants where so required, and arrange for the removal
of inappropriate staff

ensure that operational passenger staff are vetted to the appropriate
standard

establish, in consultation with the client Directorates, appropriate
standards for equipment specifications, operating procedures (both
normal and emergency) and staff training

deal with all contractual matters relating to the operation of
transport including:


developing contracts (and SLAs) for the provision of
transport services

tendering and quotation procedures in conjunction with
Central Purchasing

permitting of operators, their vehicles and staff

award, amendment and termination of contracts

authorisation of payments to contractors
establish and implement a performance monitoring system, to
standards agreed with the client Directorates
9
6.19

respond to requests for information or complaints from passengers,
their carers, establishments or the client Directorate in accordance
with agreed protocols

report any non-standard occurrences to the client Directorate and
co-operate in any actions jointly taken as a result (e.g. pupil
misbehaviour)

keep under review all transport arrangements and undertake
regular exercise to consider variations which might improve value
for money

where appropriate, raise with client Directorates transport
implications of their operational decisions (e.g. how changing
establishment operating times might result in more cost-effective
transport arrangements)

provide advice on all matters of transport policy and legislation, as
requested and the transport implications of proposed policy
changes

establish a telephone contact point to be suitably staffed at all
times when regular transport is in operation, to enable passengers,
parents, carers, establishments or operators to obtain or provide
immediate information, and for individuals to be notified of any
significant delay to their transport

regularly monitor the performance of transport operators

monitor all expenditure and report on this to the appropriate client
at the end of each financial period in an agreed format

liaise as appropriate with other internal and external agencies to
ensure that appropriate standards and specifications are set and
maintained in areas of common interest.
In addition, target standards will need to be established and agreed and a
monitoring and reporting system set in place to achieve these. This would
include:

maximum journey times

arrival and departure time windows

response times to requests

response times to breakdowns

reliability factors

safety

staff behaviour
10

period for notification of arrangements (or alterations) to
individuals

complaints handling
6.20
Alternative approaches to the centralised Passenger Transport Unit that
could be considered are outlined below.
7
ALTERNATIVE APPROACHES
A. Inter-Authority Passenger Transport Unit
7.1
The option of creating a joint inter-authority Passenger Transport Unit is
an extension of that outlined above, but recognises several additional
factors:

transport is not neatly contained within Salford’s restricted
administrative area

the limited scale of passenger transport activities within Salford
means that scarce expertise may not be fully utilised in its
specialist capacity

neighbouring authorities share these issues

there are potentially greater economies of scale available from a
joint unit.
7.2
Whilst a joint Unit could undertake all the core functions detailed above, it
may not be appropriate for it to absorb the taxi regulation functions of the
participating authorities, although the need for close liaison with the
licensing officers will be self-evident.
7.3
A joint Unit could have a number of organisational benefits, including:
7.4

economies of scale

more specialist staff

greater purchasing power

opportunities to co-ordinate transport services

IT developments.
There are, however, quite fundamental potential difficulties that would
need to be given careful consideration, which include:

authorities having different policies / eligibility criteria

authorities having different service standards / qualities

loss of local responsibility / local accountability
11

loss of local control

budget setting

financing

political differences.
B. Contract Function to Another Local Authority
7.5
The procurement of transport services could be contracted to another local
authority, if it is felt that the lead authority has the expertise and resources
to provide a cost-effective and efficient service on behalf of Salford. This
would have much the same effect as establishing a joint unit, but the
relationship would be less direct and would not include the policy
development aspects.
7.6
The main benefit to the City Council would be that it would no longer
need to provide the resources for procurement itself, with the exception of
a small ‘client’ function. Using another local authority to undertake the
procurement function, it should be possible to maintain current standards.
However, a robust agreement would be required, to ensure that any
shortfall in the contracted authority’s staffing or performance did not
impact adversely on service provision in Salford.
7.7
The Council would need to retain one or more ‘client’ officer(s) to
manage the contractual arrangements, and to be the contact person for
service Directorates and the general public. Monitoring of performance
would remain a significant obligation. Officers responsible for policy
development would remain with Salford, however; this might require
some redistribution of duties.
7.8
The potential difficulties outlined in Paragraph 7.4 above would also apply
to this option
C. Outsourcing / Externalisation
7.9
As part of the challenge process the Review Team has considered whether
external providers could better provide the management of the different
services. There have been limited examples of local authorities turning to
commercial consulting organisations to undertake some or all of their
passenger transport procurement functions. These were:

Berkshire County Council

East Sussex County Council

Somerset County Council
7.10
None of these arrangements have survived unscathed in the longer term.
7.11
The conclusions of the Review Team was that although the sample was
too small to allow statistical validation, the low rate of long-term
continuation of contract arrangements for planning and procurement of
12
transport services suggests strongly that they do not deliver the anticipated
benefits.
7.12
From the point of view of the co-ordination of different strands of local
authority transport, external contractors do not appear to be good models
to promote and develop the concept. Several reasons can be suggested for
this.

Co-ordination is not free – it requires significant investment of
time and effort to achieve and maintain, which should be
outweighed by long term benefits. The benefits accrue corporately,
however, and no contractual mechanism so far used appears to
have been able to –


resolve the conflict inherent in incentivising the contractor
to pursue corporate benefit, without giving some (or all) of
that benefit away
compensate him for the extra staff and effort involved.

Co-ordination is a diplomatic art, which requires the acceptance of
compromises by client departments. The position of the coordinator as the ‘broker’ for these negotiations may be
compromised if he is seen as having some vested interest in the
outcome, or is seen as gaining while the client only loses.

Co-ordination may well require thinking ‘out of the box’, in terms
of innovation in solutions and / or the involvement of a wider
range of partners in the delivery of transport. It is nearly
impossible to draw up a satisfactorily explicit contract that allows
for this, while ensuring that the council gets what it wants without
incurring unquantifiable, unforeseeable costs. Equally, the
contractor cannot be allowed sufficient freedom of action to deal
with other parties without incurring the risk that he might commit
the authority to an agreement it cannot fulfil.

Co-ordination often incorporates strategic considerations beyond
the scope of the activities deemed appropriate to be placed with a
contractor. As long as responsibility for delivery of the council’s
mandatory strategic planning remains statutorily with the
authority, it appears unwise not to maintain this capability in-house
(Somerset, for one, felt it was inappropriate to outsource these).
The overlap between such high level functions and the concepts of
co-ordination suggests that there is a fundamental conflict involved
in devolving the latter to a contractor.

Effective co-ordination is a dynamic concept – constant reevaluation of the services and delivery methods are necessary if
the co-ordinated system is not to become fossilised, and the
benefits to be lost again. The static nature of a fixed term contract
runs counter to these needs, but if the contract term is short enough
to allow for frequent review, the results will be higher cost and
possible instability.
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8
CONCLUSIONS
8.1
A range of options have been considered by the Review Team on how best
to deliver passenger transport services in Salford, namely:

retaining current arrangements

establishing a centralised Passenger Transport Unit

establishing an inter-authority Passenger Transport Unit

contracting the function to another local authority

externalising the function to an external provider
8.2
At this stage, it is the view of the Review team that, in principle, the
establishment of a centralised Passenger Transport Unit is the most
appropriate course of action for Salford.
8.3
A further detailed report, including financial considerations, will be
prepared for February 2003.