Central Heating Servicing and Maintenance Contract Modification
North Lanarkshire Council · 16 November 2022
Back to Housing Committee — 16 November 2022 and its agenda
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North Lanarkshire Council Report Housing Committee Does this report require to be approved? ☒ Yes ☐ No Ref Central Heating Servicing & Maintenance Contract Modification Date 16/11/22 Central Heating Servicing & Maintenance Contract Modification From Brian Lafferty, Head of Business (Housing Property and Projects) E-mail starbucks@northlan.gov.uk Telephone Siobhan Starbuck -Contract Support Manager via MS Teams Recommendations It is recommended that Committee approves the one-off modification to the existing Central Heating Repairs & Maintenance contract. 1. Background 1.1 The contract delivered by Saltire Facilities Management Ltd has been in place since January 2011 and will expire in January 2024. 1.2 The base date is July 2010 which is deemed to equate to the price levels represented at the commencement date. 1.3 In 2021, the index figures were revised two weeks after it was due to be applied to the contract, the Contractor worked with the Council to agree a rate that was more reflective of the current market conditions which secured the Council a 10% saving against the original contracted index percentages. 2. Report Executive Summary The purpose of this report is to seek approval from committee to modify the existing contract for Central Heating Servicing & Maintenance provided by Saltire Facilities Management Ltd. The existing contract is expected to be replaced by the Enterprise contract in January 2024 resulting in this contract modification being utilised as an interim measure to ensure continuity of service for the Council’s tenants until such time as the new contract is awarded. The Plan for North Lanarkshire Priority Improve the health and wellbeing of our communities Ambition statement (1) Ensure a housing mix that supports social inclusion and economic growth
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2.1 In line with the financial regulations clause 15.4 any significant variations should be reported at the earliest opportunity. 2.2 The Index rates for July 2022 were reviewed, the levels do not represent current market rates. 2.3 Members will be aware of the well-publicised inflationary pressures in the wider economy linked to Covid-19, Brexit and the war in Ukraine. As a result, material prices have risen significantly in recent times with the only way to address this within the contract being through the index fluctuation. 2.4 A 10% saving was realised last year through working closely with the Contractor to agree an uplift rate lower than that generated through the index, however this is not the case for 2022 and the Contractor is seeking an additional uplift on top of the BCIS index figure which will equate to an overall uplift of approximately 10%. 2.5 An earlier committee report to the Housing and Regeneration Committee on 20 May 2020 regarding the Central Heating Servicing and Maintenance Extension advised there would be no change in the scope of the contract or the schedule of rates. This amendment may be considered a one-off modification to the existing terms and conditions to deal with the unprecedented market conditions and ensure the sustainability of the contract. Allowing an increase to the index percentage would have a consequential effect on the Schedule of Rates. 2.6 The uplift of the Contract will be fully funded from the HRA budget. 2.7 The rates including the 10% uplift have been assessed and are still considered to demonstrate best value. Price Savings / Increases 2.7 Not applicable. Price Stability 2.8 The is index remains volatile, with materials at the labour market still struggling to recover post Brexit and the Covid-19 pandemic, therefore there remains a risk that prices could continue to risk, this will be monitored and managed appropriately.
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3. Measures of success 3.1 The contract will remain sustainable for the duration of the contract period; 3.2 that Best Value is both demonstrable and achieved. 4. Supporting documentation Not applicable. Brian Lafferty Head of Business (Housing Property and Projects)
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5. Impacts ( http://connect/report-template-guidance ) 5.1 Public Sector Equality Duty and Fairer Scotland Duty Does the report contain information that has an impact as a result of the Public Sector Equality Duty and/or Fairer Scotland Duty? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? If Yes, has an assessment been carried out and published on the council’s website? https://www.northlanarkshire.gov.uk/your-community/equalities/equality-and-fairer- scotland-duty-impact-assessments Yes ☐ No ☐ 5.2 Financial Impact Does the report contain any financial impacts? Yes ☒ No ☐ If Yes, have all relevant financial impacts have been discussed and agreed with Financial Solutions? Yes ☒ No ☐ If Yes, please provide a brief summary of the impact? The cost associated with increase will be contained within the HRA budget. 5.3 HR Policy Impact Does the report contain any HR policy or procedure impacts? Yes ☐ No ☒ If Yes, have all relevant HR impacts have been discussed and agreed with People and Organisational Development? Yes ☐ No ☐ If Yes, please provide a brief summary of the impact? 5.4 Legal Impact Does the report contain any legal impacts (such as general legal matters, statutory considerations (including employment law considerations), or new legislation)? Yes ☒ No ☐ If Yes, please provide a brief summary of the impact?
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Risks associated with legal proceedings exist if the decision is formally challenged. 5.5 Data Protection Impact Does the report / project / practice contain or involve the processing of personal data? Yes ☐ No ☒ If Yes, is the processing of this personal data likely to result in a high risk to the data subject? Yes ☐ No ☐ If Yes, has a Data Protection Impact Assessment (DPIA) been carried out and e-mailed to dataprotection@northlan.gov.uk Yes ☐ No ☒ 5.6 Technology / Digital Impact Does the report contain information that has an impact on either technology, digital transformation, service redesign / business change processes, data management, or connectivity / broadband / Wi-Fi? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? N/A Where the impact identifies a requirement for technology, has an assessment been carried out (or scheduled) by the Enterprise Architecture Governance Group (EAGG)? Yes ☐ No ☐ 5.7 Environmental / Carbon Impact Does the report / project / practice contain information that has an impact on any environmental or carbon matters? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? N/A 5.8 Communications Impact Does the report contain any information that has an impact on the council’s communications activities? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact?
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N/A 5.9 Risk Impact Is there a risk impact? Yes ☒ No ☐ If Yes, please provide a brief summary of the key risks and potential impacts, highlighting where the risk(s) are assessed and recorded (e.g. Corporate or Service or Project Risk Registers), and how they are managed? Risks associated with legal proceedings exist if the decision is formally challenged, however the risk remains that if no increase is permitted the contract may no longer be sustainable and could lead to a re-procurement exercise being required earlier than planned which would leave the Service exposed to more volatile market conditions.