Award of contract for the provision of Employee Benefit Services

This paper is seeking the approval to award a 4-year contract (via CCS framework, lot RM6133) to start from 1 August 2022 and run until 31 July 2026 for the provision of Employee Benefit Services for the MPS.

This Lot has a sole supplier appointed and approval is requested to undertake a direct award to the suitably capable contractor Edenred Ltd. RM6133 framework is provided at no direct cost to the MPS

The Deputy Mayor for Policing and Crime is recommended to:

1. Approve the direct award of contract for 4 years via the CCS framework (RM6133) up to a maximum contract value of £15m, noting that there is no direct cost to the MPS.

1.1. The MPS has an existing contract in place for the provision of an employee benefit service for its staff (and MOPAC staff). The contract is held with Edenred Ltd. The MPS is seeking to arrange a further 4-year contract with Edenred Ltd. Lot RM6133 allows it to undertake a direct award to Edenred Ltd for this provision.

1.2. Alternative frameworks and options were considered as part of this process, however using the CCS framework offers optimum value-for-money for the MPS. If approval is given for this contract, Edenred Ltd will supply the following services to the MPS:
• A Cycle to Work Scheme (via salary sacrifice),
• A Childcare Voucher Scheme (via salary sacrifice),
• Access to discounted Goods and Services
• Associated secure website dedicated to the MPS, where users can access all offers.

1.3. These schemes are grouped under the banner ‘MetRewards’ or ‘MetBenefits’. The current schemes are popular and are provided at no direct cost to the MPS. The Cycle to Work and Childcare Vouchers schemes are operated as Salary Sacrifice arrangements, which therefore nets the MPS employer NI savings at 13.8% of the value of employee contributions. The schemes offer staff and officers discounts and tax savings, which are essential in the current financial climate. The MPS wishes to arrange a new combined benefits platform to continue to offer this provision.

1.4. The MPS intends to retain all employer NI savings achieved through the salary sacrifice schemes. The overall reduction in NI contributions for the MPS running both schemes is currently c. £400k per annum. If the benefit platform is not offered in the MPS, the organisation will pay more employer NI contributions moving forward.

1.5. Both the Cycle to Work Scheme and Childcare Voucher Scheme have tax benefits for both the individual, as salary is sacrificed from gross pay i.e. before any tax has been levied, and for the MPS, as the organisation’s NI liability is consequently lowered.

1.6. The discounted shopping contract operates at zero cost to the MPS or its staff with employees accessing an online portal to obtain discounts from retailers on a variety of goods and services. The services are widely accessed by MPS personnel and in total, in the period from January 2021 – October 2021, MPS’ staff spent approximately £220k via the portal, saving each individual on average over 5% on each purchase that was made.

2. Issues for consideration

2.1. RM6133 framework is provided at no direct cost to the MPS and offers optimum value-for-money for the organisation. This Lot has a sole supplier appointed and approval is requested to undertake a direct award to the suitably capable contractor Edenred Ltd.

2.2. The duration of the call-off contract will be 48 months (from 1 August 2022); this is the maximum term for a call off contract from a framework and there will be no option to extend.

2.3. The call off contract will provide MPS staff with access to a Cycle to Work and Childcare Vouchers schemes and a platform for discounted shopping through a single management contract.

2.4. Edenred Ltd. have the current contract in place to supply Employee Benefit Services to the MPS. The MPS has been satisfied with the performance of Edenred Ltd over the life of the 4-year contract.

2.5. The total value for the contract is estimated to be between £10 – 15 million, however, this value was representative of the spend between MPS staff (including MOPAC staff) and the supplier, with all costs recovered by the MPS via salary sacrifice.

2.6. There is no direct cost to the MPS. However, the MPS is forecasting employer National Insurance (NI) savings of £1.78 million in the 4-year life of the contract; if the benefit platform is not offered in the MPS, the organisation will pay more employer NI contributions moving forward.

2.7. Employees also benefit as operating a salary sacrifice scheme means benefits are paid out of the individual’s pre-tax salary. This means that a smaller proportion of the employees overall salary is lost to tax and NI.

2.8. The call off contract will provide MPS staff with access to a Cycle to Work and Childcare Vouchers schemes and a platform for discounted shopping through a single management contract.

3. Financial Comments

3.1. By using the CCS framework, significant savings are available compared to market available prices. Free of charge, cost neutral and low prices for services have been secured due to the aggregation of public sector demand. All customers benefit from the same volume discounts via the cumulative spend through the agreement.

3.2. The majority of the services do not require any upfront funding but the Cycle to Work scheme involves the MPS providing a loan for the employee to directly hire a bike from the supplier. The total cost of each bike is then deducted from the user’s monthly salary; this payment is exempt from NI contributions. This strand of benefits alone is expected to save the MPS approximately £469k subject to demand.

3.3. The MPS will generate approximately £1.3m in NI savings as a result of administering the Childcare Voucher Scheme

4. Legal Comments

4.1. The Mayor’s Office for Policing and Crime (MOPAC) is a contracting authority as defined in the Public Contracts Regulations 2015 (the Regulations). Public contracts for goods and services valued at £213,477 (inclusive of VAT) or above must be procured in accordance with MOPAC governance and the Regulations. This report confirms the value of proposed contract exceeds this threshold and, accordingly, the Regulations are engaged.

4.2. This report also confirms the procurement route proposed is to call off from a Crown Commercial Services framework agreement. This will represent a compliant route to market where the MOPAC is named as an eligible user of the framework and the MOPAC’s requirements are within the framework’s technical and financial scope.

4.3. Paragraph 7.23 of the MOPAC Scheme of Delegation and Consent provides that the Director for Strategic Procurement (now Commercial Services) has consent to approve the award of all contracts, with the exception of those called in through the agreed call in procedure.

4.4. Paragraph 4.13 of the Scheme provides that the Deputy Mayor for Policing and Crime (DMPC) has delegated authority to approve all contract exemptions for £100,000 or above.

4.5. Paragraph 4.14 of the Scheme provides that the Deputy Mayor for Policing and Crime (DMPC) reserves the right to call in any MPS proposal to award a contract for £500,000 or above. Accordingly, the DMPC should be invited to call any proposed award in.

5. Commercial Issues

5.1. This requirement is being procured as a managed service to minimize the resources required from the MPS. Edenred will provide and manage three benefit strands, predominantly supplied at no cost to the organisation. The three benefits include Cycle to Work Scheme (via salary sacrifice), Childcare Voucher Scheme (via salary sacrifice), and access to discounted Goods and Services. All will be fully accessible to MPS users on a secure online hosted website where users can view offers, access pre-paid top-up cards and tracks spend and savings according to their own profile.

5.2. As the intention is to continue the arrangements in place with the existing supplier, users will experience no disruption.

5.3. The MPS have identified a suitable CCS framework to call off from Employee Benefits services, which is RM6133 Lot 1. This is a single supplier Lot, thus approval is requested to undertake a direct award to the suitably capable supplier Edenred Ltd. Edenred will provide the MPS access to over 5,000 suppliers and retailers and provided service to other public sector organisations such as the Home Office, the Department for Transport, Department for Work and Pensions and Ministry of Justice.

5.4. The contract term will be for a period of 48 months from contract award. The current contract expires on the 31 July 2022 and the commencement date for the new contract will be 1st August 2022.

5.5. The contract with Edenred Ltd. contributes to delivering the London Anchor Institutions Charter in that the platform is sufficiently flexible to allow a wide variety of suppliers to provide discounts to MPS staff via the benefits platform. This is considered to be a valuable option for local companies who are looking to recoup losses incurred as a result of the COVID-19 pandemic. This facility is already in existence in the current contract with Edenred Ltd. and will continue when this is renewed.

6. GDPR and Data Privacy

6.1. The MPS is subject to the requirements and conditions placed on it as a 'State' body to comply with the European Convention of Human Rights and the Data Protection Act (DPA) 2018. Both legislative requirements place an obligation on the MPS to process personal data fairly and lawfully in order to safeguard the rights and freedoms of individuals.

6.2. Under Article 35 of the General Data Protection Regulation (GDPR) and Section 57 of the DPA 2018, Data Protection Impact Assessments (DPIA) become mandatory for organisations with technologies and processes that are likely to result in a high risk to the rights of the data subjects.

6.3. The Information Assurance and Information Rights units within MPS will be consulted at all stages to ensure the programme meets its compliance requirements.

6.4. The programme does not use personally identifiable data of members of the public, so there are no GDPR issues to be considered.

7. Equality Comments

7.1. Whilst this is a new contract, it is an extension of the service that is provided by Edenred Ltd. The benefits service is available to all MPS staff and therefore there are no equality impacts associated with this arrangement.

8. Background/supporting papers

8.1. Report.