ITEM CMDDL3
DEPUTY LEADER OF THE COUNCIL – 23 MARCH 2009
AGENCY AGREEMENT TO PROVIDE ICT SERVICES TO OXFORD CITY COUNCIL
Report by Assistant Chief Executive & Chief Finance Office
Introduction
1. In October 2007 discussions between the Chief Executives of the City and County Councils posed the questions as to whether both parties could benefit from the consolidation of ICT services of the two authorities.
2. Over the next six months studies were conducted that showed that both Authorities could benefit financially and operationally from joint working, that overall services to both groups could be enhanced and that opportunities for the ICT staff concerned would be improved.
3. A formal offer of services from the County ICT Services Unit to the City under an Agency style agreement was made in late 2008 and subsequently accepted and ratified at a City Council meeting in early January 2009.
4. The contract for the provision of ICT services is now in late stages of negotiations.
5. Support for the contractual arrangements has been provided by:
(a) Hedra for operational and technical concerns; (b) Synetrix for networking provision; (c) IBM for storage and server capacity; (d) Oxfordshire CC Legal Services for contracting; (e) Oxfordshire CC HR Services for TUPE arrangements.
6. A draft of this contract is attached to this report (Annex 1) (download as .doc file).
7. The target start date of the agreement is 1 April 2009. There are no operational impediments currently known to this start date.
Outline of the Collaboration
8. From April 1, 2009 all ICT services for the Oxford City Council will be provided by the Oxfordshire CC ICT Services Unit.
9. Twenty members of the City ICT Staff will TUPE across to join the County Council ICT Staff and will join the existing service organisation, working as an integrated unit.
10. The Wide Area Network serving the City Council buildings will be integrated into the County’s OCN network, to allow seamless working between the two organisations.
11. The services to be provided by the County Council are contained in the Service Catalogue that is attached to this report (Annex 2) (download as .doc file). They include:
(a) Application Support and Development (b) Business Continuity (c) Business ICT Liaison Support (d) Desktop Provision and Support (e) Email and Collaboration Tools (f) Application Hosting (g) ICT Service Desk (h) Internet Access Services (i) Local Area Networking, Wide Area Networking (j) LAN Printing Services (k) ICT Purchasing Support (l) Remote Working Support (m) Network Support (n) Potentially, Digital Telephony
12. The City will pay quarterly for services received. As the charges indicated in the Service Catalogue are comprised of both fixed and variable cost elements, it is not possible to fix an exact sum in advance, but it is believed that the base agreement will incur an income of £1m annually +/- 5%, possibly growing to £1.2m with variable elements.
13. The initial contract is scheduled to run for seven years with breakpoints at both three and five years.
14. A six month review period has been set into the agreement, whereby if the County services are not reasonably deemed to be satisfactory, then if potential remediation were to fail, the City could withdraw from the contract with payment for advanced County investment.
15. To accelerate the development of the City ICT infrastructure and to lower the cost of support, a soft loan to finance refresh is being discussed, but not yet determined, with County Finance officials. The amount of the loan would be paid back in full over the life of the agreement. Part of this agreement will be payment concessions of 10% and 5% in the first two years of the agreement to be paid back in full in years four and five.
16. To further full partnership working, a City operational officer has been invited to sit with the County ICT Strategy Group as an observer.
17. The City will retain one ICT manager post and an assistant to manage the City’s side of the contract.
18. In the initial stages of the contract, a Proof of Concept for the provision of digital telephony services will be set up for the City, to convert one of their central buildings. If successful the project will be extended to the provision of full telephony services across the City.
Benefits to OCC
19. The ICT agreement with the City will greatly increase partnership working arrangements and meet several objectives around partnership working set out in the Local Authority Agreement.
20. It will benefit staff of both organisations, allowing them a larger and more comprehensive ICT infrastructure with which to work.
21. It will improve overall delivery of ICT services within the Council, as external customers are often times more demanding than internal customers.
22. It sets the stage for the County to offer ICT services to additional governmental agencies in Oxfordshire, and, to offer additional commercial services to the City.
23. The financial arrangements should prove to be mutually beneficial to both groups with the ICT Council saving money and the County Council able to offset a small portion of its ICT overhead costs.
Risks
24. The provision of services to a third party requires professional indemnity cover, and is an insurable risk. The cover to be provided is for £5million.
25. There is always an operational risk that for unforeseen reasons, the County’s provision of services is not satisfactory, leading to public embarrassment.
26. The financial risk that the County has seriously misjudged its obligations under the contract is considered to be small.
Financial and Staff Implications
27. The County ICT Services establishment figure will grow by 21 persons, the number of staff TUPE’d across from the City plus one permanent ICT Liaison Manager for the County to manage the contract relations. Ten contract positions will be reduced to partially financially offset the increase.
28. £1m of annual revenue will be received to pay for services rendered.
RECOMMENDATION
29. The Deputy Leader of the Council is RECOMMENDED to approve the provision of ICT Services in collaboration between Oxfordshire County Council and Oxford City Council.
SUE SCANE Assistant Chief Executive & Chief Finance Officer
Background papers: (1) Draft contractual arrangement between the County and the City (2) County ICT Services Catalogue
Contact Officer: Stephan Conaway, Head of ICT Services Unit Tel: (01865) 815890
March 2009
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