BSS Programme: Delivery of Business Support Services

In October 2015 - under the BSS Transformation Programme - the MPS outsourced its transactional HR, Finance and Procurement services to Shared Services Connected Limited (SSCL) at a total contract value of £234.5m over 10 years (7+3). This was a complex Programme involving both the implementation of a new ERP system (PSOP) and the roll out of a transformed service offer across the MPS in support of the delivery of net savings of £101.4m over the contract term. Linked work undertaken in parallel on the separate outsourcing of Occupational Health services and the implementation of new IT systems for both Fleet and Health & Safety added further complexity.

The new PSOP (Police Standard Operating Platform) system and enabled service went live across the MPS on 5 February 2018, in what has been recognised as a commendably smooth Go Live for a Programme of this complexity and scale. The SSCL service model is now operating successfully for the majority of the transactional service lines with new ways of working embedded across the MPS and the full transition from Programme to ‘business as usual’ predominantly complete.

However, spend against the contract has been faster than profiled in the original Business Case. In the main, this is attributable to the changes in the MPS budget position following Spending Review 2015 (compared to the forecasts in the Business Case) resulting in higher demand for recruitment and promotion services than forecast, changes to the original timetable for programme implementation, and new work arising from wider transformation and the management of operational risk.

The contract spend forecast has now been re-profiled using our most up to date demand projections. The current paper seeks approval to increase the contract value in order to align it with the remaining contract term. This increase is within procurement and commercial regulation limits. The contract term remains unchanged and there is no request to activate the optional extension period. MPS are requesting approval to commence work to assess our options for managing these services from 1 October 2022.

Simultaneously, the MPS are requesting the necessary mandate to enter into a commercial settlement with SSCL in order to resolve a number of wider items and to enable a reset of the contract in key areas in order to deliver enhanced value to the MPS over the remaining contract term.

The Deputy Mayor for Policing and Crime is recommended to approve:

1. An uplift in the value of the existing contract with Shared Services Connected Limited by £89m within existing procurement and commercial limits.

2. That the MPS enter into a commercial settlement with SSCL in resolution of all historic dispute points and to enable the reset of the contract to deliver better value to the MPS.

3. That the MPS commence work on appraising options for delivery of its transactional Business Support Service from 1 October 2022 with associated costs of up to £800,000.

1. Introduction and background

1.1. In October 2015 - under the BSS Transformation Programme - the MPS outsourced its transactional HR, Finance and Procurement services to Shared Services Connected Limited (SSCL) at a total contract value of £234.5m over 10 years (7+3). This was a complex Programme involving both the implementation of a new ERP system (PSOP) and the roll out of a transformed service offer across the MPS in support of the delivery of net savings of £101.4m over the contract term. Linked work undertaken in parallel on the separate outsourcing of Occupational Health services and the implementation of new IT systems for both Fleet and Health & Safety added further complexity.

2. Issues for consideration

2.1. Under the volumetric model, the service charges payable by MPS will go up and down depending on the level of demand made on SSCL in relation to the specific drivers. Whilst the majority of the modelling has held up well, the overall size of the Met is larger than forecast in the business case as at that time (due to concerns linked to austerity) the Met were modelling the need to operate with a much-reduced workforce. Following the Spending Review, whilst the budget position has remained very challenging and significant reductions have been made in police officer and police staff numbers, the even steeper declines in the MPS workforce that had been modelled pre-SR have not materialised, and we therefore need to extend the value of the contract by £89m. It should be noted that the risk register attached to the FBC specified the risk of inaccuracies in the volume forecast over such a period, which, if manifested, would lead to higher service costs than provisioned for under both the contract and budget.

2.2. The improved (albeit still challenging) budget position following SR15, and the subsequent announcement of additional funding from the Home Office and the Mayor, has driven significant additional demand across recruitment, promotion and work-based assessment and an arising pressure in terms of the service charges payable by the MPS in relation to the volumetric drivers of ‘number of posts filled’ and ‘total employee headcount’.

2.3. The recommended commercial settlement with SSCL will introduce new contractual arrangements between MPS and SSCL. This will ensure that the contract is aligned to the prevailing operational requirements, and will deliver notable value for the MPS over the remaining term through lowering total operating costs for resourcing activity, securing additional investment from SSCL in the police officer recruitment process, lowering costs for the management of any requests for new work and SSCL absorbing new activity on workforce deployment within the existing service charges.

3. Financial Comments

3.1. The proposed uplift in the contract value of £89m allows headroom for the Service Directors to make further requests for service changes above those currently planned, should business need arise. The budgetary impact does not reflect the full £89m of the contract uplift as the budget assumptions include provision for currently planned service changes only. Any future requests for service changes will be subject to the approval of business cases including identified funding to support.

3.2. Table 1 in the attached document shows the budget pressures against total projected costs. The budget pressure for 2019/20 will be met from additional one-off funding. The budget pressures in future years will be added to the medium term financial plan, to be managed through the budget process.

4. Legal Comments

4.1. Paragraph 4.13 of the MOPAC Scheme of Delegation provides that the Deputy Mayor of Policing and Crime (DMPC) has delegated authority to approve all unforeseen variations and extensions to contracts with an original values of £500,000 or above, when the variation of extension is greater than 10% of the original value and / or is for a period of more than 12 months. The proposed uplift of £89m in within the procurement limits of 50% increase in the original contract value.

4.2. Paragraph 4.8 of the MOPAC Scheme of Delegation and Consent provides that the Deputy Mayor for Policing and Crime has delegated authority to approve business cases for revenue or capital expenditure of £500,000 or above.

5. GDPR and Data Privacy

5.1. 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.

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

5.3. The Information Assurance and Information Rights units will be consulted at all stages of the work arising from the current paper to ensure that all compliance requirements in respect of GDPR and Privacy are met.

6. Equality Comments

6.1. A full Equality Impact Assessment was undertaken at the start of the BSS Programme. The uplift to the contract value and reset of commercial terms does not change this EIA. The options appraisal for the delivery of transactional business support services from 1 October 2022 will be subject to a further EIA.