Agenda item

3.30

Lorna Baxter, Chief Finance Officer to attend to present the report that focusses on the status of the service at six months stabilisation, including issues which are still outstanding and actions taken for resolution.

The Committee is RECOMMENDED to agree that a further update be provided in 3 months’ time.

The Committee had before them a report (AG9) which provided an overview of the first six months operation of the shared service arrangement between Hampshire and Oxfordshire County Council, from July to the end of December 2015.

Lorna Baxter, Chief Finance Officer in introducing the report, stated that, as anticipated, the first 6 months of operation had been a significant challenge in terms of the scale of business change required, embedding new ways of working and resolving a range of first time events associated with the transfer of data and business practice in July 2015. There had been a collective effort through on-going business readiness, user engagement and training during this period. She further reported that a number of stabilisation issues had impacted the confidence in the model as detailed in Section 3 of the report, but these were continuing to be collectively resolved by colleagues across both organisations and were reducing in volume and scale as the model embeds.

The performance metrics summarised in Section 4 of the report show a stabilisation across the majority of areas including confidence over the continued accuracy of payroll and the timely processing of invoice payments and income receipting. Concerns were raised in the stability and effectiveness of the customer contact model, and against some specific areas (e.g. recruitment cycle time), where recommendations have been included for further investigation and action.

Anna D'Alessandro   reported that there were two key ongoing issues related to delivery of services by the Hampshire partnership, which officers were working very closely with HCC to resolve.  These, and their associated actions, were all detailed in the joint report, at Appendix 1.  The two which were significant were:

OCC had yet to receive a full set of the monthly pension data for either the Local Government or Fire-Fighters Pension Schemes.  The Pension Services team was finding workarounds to avoid undue delay in the payment of new pensions and death grants, but the lack of data had led to delays in the calculation of employer contribution rates for new academies.  The late submission of data might also potentially result in difficulties in providing the Actuary with the information required for the 2015/16 Accounts and the 2016 Valuations.  However, this was being actively managed and work was continuing with IBC colleagues to ensure all the outstanding data was provided, and officers continue to assess and mitigate the risk.  There was a jointly agreed plan in place to deliver this information in the required timeframe, which HCC was progressing.

In relation to HCC not meeting target response timescales for queries and measuring the effectiveness of those responses, she reported that the non-achievement of targeted response times had ramifications both on the business and its customers.  As an example, a number of adjustments needed to be made retrospectively to payroll when response timeframes aren’t met by HCC, exacerbated by OCC manager late notification.  HCC would be rolling out a plan of continuous improvement of its Customer Support model, including the Contact Centre and online enquiry forms to meet targeted requirements, over the coming months.  The plan would look at quantitative (response times) and qualitative (effectiveness/customer experience) aspects.  OCC will supplement this with user/manager education and improved online guidance.

She further reported that Detailed/transactional level information which underpinned the Aged Debt Report, especially with respect to legacy debt (pre-IBC or migrated debt) was currently outstanding.  She reported that old debt (over 150 days) was £6.8 million and needed to be more rigorously managed.

There were also some operational issues that had been identified during the stabilisation period, that were not directly IBC related but were as a consequence of the transfer and should have been addressed during the business readiness project stream.  These were now being addressed internally within the Directorates on a case by case basis, overseen by Corporate Finance to ensure internal control requirements are being met.

There are some other issues on the income collection side, which were undermining confidence in service reliability, including:

·         A batch of invoices being sent to OCC customers with HCC payment details;

·         Invoices emailed to customers which were hitting spam filters and hence risking non-payment;

·         Emails being sent to customers with unsuitable subject headers (e.g dunning letters, or invoice numbers);

·         IBC Portal reports not being an accurate reflection of an actual customer account balance as data is being drawn from other customer records.

The IBC were aware of these issues, as they had been escalated to the Head of the Shared Services Centre.  There was a plan in place for resolution and this was currently treated as a priority.

We have in place a number of arrangements from an OCC perspective to more effectively capture and resolve issues:

·      Since October 2015 officers had been meeting monthly with IBC representatives to discuss purchasing and income related issues.  This would continue at least until the end of the financial year;

·      In November 2015 officers implemented a more coordinated approach to the capture, escalation and resolution of issues through an IBC Coordination Group consisting of a nominated Coordinator for each Directorate.  This group excluded schools as issues had been addressed through the Schools Transition Team.  The Coordination group met weekly and on a regular basis they were attended by the Head of the IBC and his subject matter expert;

·      In December 2015 officers identified particular IBC issues relating to the payment of large suppliers in E&E.  Subsequently relevant staff were invited and IBC representatives to discuss issues and associated processes in detail.  There was also a follow-up session in January.  This targeted approach had proven to be very successful and officers were currently working with other Directorates to deliver the same;

·      For the last few months, senior representatives in OCC had regular (at least monthly) face-to-face dialogue with senior members of the IBC to escalate significant and unresolved issues relating to Finance and HR.  There was now a well-defined escalation route into the IBC;

·      “Bitesize Training” rolled out in October for both Finance and HR continue to be popular and well attended and had contributed to the more effective management and resolution of problems;

·      The Business Date Upload (BDU) was designed as an interface into the IBC SAP system for one-off vendor transactions, and for which no other standard solution was currently available.  A project was established in October to review these transactions, as the controls around this system are weak.  The Project team have identified a number of areas which could use an existing solution for payment and those which require an alternative to the current interface system.  Officers would be having discussions with HCC over the coming weeks.

Members expressed concern over the level of Age Debt, the amount of duplicate payments occurring and the number of staff still using the manual system.

In response, Ms D’Alessandro reported that at the end of October, the amount of duplicate payments was nearly 1 million and was now at just under 300,000.  She further reported that a project was in place to get people off the manual interface and on a standard process with Hampshire and that there was 100% supported support at senior manager level to support this.

Members further raised concerns about not being able to how much had been paid against invoices. 

RESOLVED:  to agree that a further update be provided to the Committee at its July meeting, with an update in April on Aged Debt and duplicate payments.