Labour Process And Technological Efficiencies

Overview

The unprecedented downturn in the UK economy in 2009 and subsequent change of government and move to an ‘age of austerity’ in 2010 presented local authorities with major financial challenges.

Oldham is located to the East of the Greater Manchester area occupying a pivotal position between the Greater Manchester and Leeds regions, enjoying a central position on the M62 corridor.

Oldham Council comprises a town centre with 16 districts with almost a quarter of the borough in the Peak District National Park.

NSL have successfully delivered the operation and management of decriminalised parking and the operation and management of 62 Council owned car parks within Oldham since 2004.

The Challenge

Oldham Council delivers services for the people of the borough with an annual budget of about £235 million. With looming financial challenges nationally, the council took decisive action to get ‘ahead of the game’, striving for efficiency and re-positioning themselves as a ‘commissioning authority’.

Oldham Council’s strategy to work within any budget shortfall prompted them to identify key partners who could develop new and innovative ways to deliver greater value for public money.

In late 2009 Oldham council approached NSL with an aspiration to significantly reduce operational costs whilst minimising the impact on front line services. This aspiration led to the production of proposals from NSL that innovatively reworked the operation and delivery of the whole parking service, including the public interface. Phil Matley, Oldham’s Head of Highways and Engineering, picked up the challenge on joining the Authority in September 2010.

Phil commented, “The objective of the review was to identify significant opportunities to achieve cost efficiencies whilst also meeting the Councils corporate plan to provide high quality services and to improve value for public money. Ultimately any changes would have to be conducted in a way that continued to maintain and protect the council’s reputation”

The Oldham team identified NSL as a partner capable of meeting their needs for Labour, Process and Technology efficiencies. Importantly opportunities to cluster more core services under the NSL contract became a very viable proposition, including the core provision of Penalty Charge Notice (PCN) Processing.

Meeting core DfT PCN processing guidelines

DfT guidance on third party involvement with PCN processing, particularly at Representation stage, has previously been a grey area, with many authorities actively avoiding the outsourcing of this aspect. Traffic Management Act guidance says, “Enforcement authorities should not contract out the consideration of formal representations. Enforcement authorities remain responsible for the whole process, whether they contract out part of it or not.”
In considering how they might achieve some outsourcing benefits linked to Representations Oldham Council innovatively sought to understand exactly what could and could not be achieved within complex technical and legal boundaries.

Oldham tackled this problem head on and sought to outsource almost the entire back office PCN processing operation, whilst keeping in line with DfT requirements, seeking appropriate advice from their Legal Department, who have innovatively backed the legality of the process NSL operates on Oldham’s behalf.

One Council Officer has retained responsibility for setting enforcement and representation policy whilst also processing Traffic Penalty Tribunal (TPT) cases. This Officer checks and signs post NTO formal rejection of challenge and statutory declaration letters, endorsing correspondence completed by NSL agents, and accepting case files produced by them for the TPT cases. There is an exceptions process whereby representations that have mitigation or merit, even when the Council’s policy is to reject, are forwarded to the Council Officer for consideration.

The Council produced a rigorous policy document that clearly set out the criteria for allowing or refusing representations against PCN’s. This thorough document provides clear direction to the outsourced processing team for the whole process. Significantly, the document works within legislation and DfT guidelines to ensure that any decision to deviate from the policy can only be made by a Council Officer, not by a third party provider.

The document produces a consistency of decision-making and provides the Council with the ability to demonstrate absolute transparency to the public (The policy is displayed on the Councils web site).

Fundamentally, the shift in thinking has allowed Oldham to include the outsourcing of the whole PCN operation, while still maintaining the Authority as the final arbiter of appeals, ensuring the operation is legally robust but benefits from significant cost savings.

The Solution

In order to outsource the Notice Processing and customer contact operation, NSL arranged initially in April 2010 for staff to be seconded, in anticipation of the achievement of a contractual agreement. This flexibility of arrangement without formal arrangement was put in place to expedite the migration process to produce optimal efficiencies.

New processes have been backed up with ongoing training and coaching to produce better customer focussed correspondence, along with interactive staff meetings where issues are discussed and resolved.

NSL and Oldham Council looked at the make-up of the processing team and used flexibility in staffing the operation, allowing some early retirement, key time working, peak time multi-skilling of the wider enforcement and trainee positions, and supported by an automated telephone PCN payment facility. This technological efficiency means that now 60% of payments are made without the need for human interaction (this system is available at nights and weekends leading to improve customer interaction and satisfaction)

On 1st December 2010, Oldham Council and NSL signed an agreement that cemented their relationship for nine years, coinciding with the TUPE transfer of Oldham Council staff to cover the responsibilities of end-to-end Notice Processing, together with an agreement for NSL’s bailiff service TASK to provide debt recovery services. As part of this process, NSL sought and secured Pension Fund Admitted Body Status to protect the Local Authority TUPE staff’s pension rights.

The Result

NSL achieved a seamless transfer of services and is now processing around 30,000 PCN’s per annum and far exceeding the operations agreed Key Performance Indicators.

The review and consequent implementation of efficiencies within the parking service produced efficiencies of 31% upon the existing outsourced on street/off street/cash collection/machine maintenance operation operated by NSL.

NSL and Oldham Council were able to reduce the number of notice processing and customer contact staff from nine to six through voluntary retirements, the introduction of an automated telephone payment, and the recruitment of an apprentice position within the customer service function. This reduced labour costs by 25%.

A policy of continuous improvement triggered the introduction of a new digital telephone system within the call centre producing improved telephone handling and management. Allied to this is a staff-training programme that provides a contingency resource that can be called upon within the larger NSL team to meet peaks in workload.

This has resulted in correspondence turnaround within an average of 2 working days, down from a peak of 17 days. From a situation where over 600 letters per month were outstanding, the team now have consistently fewer than one hundred letters. This control of workload has in turn produced increased staff satisfaction, significant improvements in customer service levels, lower complaint levels, thereby protecting and enhancing the Oldham reputation.

Next Steps

Having achieved an improvement in service at a reduced cost NSL and Oldham are working together to further drive quality and efficiency. The planned development of the parking service web site will facilitate a more effective customer interaction, and the introduction of web based PCN payments and permit applications will drive further process efficiencies.

NSL are currently evaluating the opportunity to introduce software that allows the setting of local authority policy criteria on the system, thus preventing the production of a letter that is not in accordance with that policy. This software would provide an absolute guarantee of compliance with policy and produce even greater efficiencies.

Read how Parking Review reported on our Oldham operation

Read about our new BPO structure