BANKING CONTRACT : Executive on 08/01/2008

Waverley Borough Council Committee System - Committee Document

Meeting of the Executive held on 08/01/2008
BANKING CONTRACT

Summary & Purpose

The purpose of this report is to consider the extension of Waverley’s contract for the provision of banking services by up to 9-months to enable the tender to reflect the outcome of the review of the Council’s cash collection arrangements.

APPENDIX D

WAVERLEY BOROUGH COUNCIL

EXECUTIVE - 8TH JANUARY 2008

Title:

BANKING CONTRACT

[Portfolio Holder for Finance: Cllr M H W Band]
[Wards Affected: All]

Summary and purpose:

The purpose of this report is to consider the extension of Waverley’s contract for the provision of banking services by up to 9-months to enable the tender to reflect the outcome of the review of the Council’s cash collection arrangements.

Environmental implications:

There are no direct environmental implications.

Social / community implications:

There are no direct social/community implications.

E-Government implications:

It is essential that the banking service provider can meet Waverley’s requirements to continue to extend its use of electronic payment and receipt transactions. Meeting Waverly’s future ambitions will feature in the evaluation of the tenders.

Resource and legal implications:

Waverley’s 2007-08 budgets for the different elements of its banking arrangements are as follows:

1) HSBC Bank charges -Ł26,000
2) HSBC Charges for receiving debit/credit card payments - Ł14,000
3) Secure Cash Collection from 4 cash officers - Ł13,000

The first two amounts would form the basis of the tender for banking services. The cash collection is currently a separate contract, although the provider must be approved by Waverley’s bank.

Background

1. Waverley tendered for the provision of banking services in 1999 and HSBC were awarded the contract commencing 1st April 2000 for an initial period of three years. Previously Lloyds bank operated the contract. The Council approved the extension of this contract for a further 3 years to 31st March 2006 and then a further 2 years to 31st March 2008.

2. Overall, officers are satisfied with the service that HSBC have provided and previous benchmarking with other authorities has indicated that the charges are in line with other others. This, combined with the fact that there have only been a small number of banks tendering for local authority contracts, has supported the case for extending on previous occasions.

3. Waverley’s Contract Procedure Rules (CPR Q101a) allow contracts to be extended for up to 3 years, beyond which the approval of the Executive is required. Officers are keen to tender this contract on the open market to ensure that the many changes to Waverley’s banking transactions in recent years, mainly brought about by increased electronic transactions, are fully reflected in the future contract and pricing structure.

4. However, the Corporate Overview and Scrutiny Committee has requested a review of Waverley’s cash collection arrangements. A scoping report will be considered by Members of the Committee in January and the review is likely to be wide-reaching with, potentially, major changes to the structure and volume of Waverley’s banking transactions and arrangements. Therefore, rather than tender with an uncertain transaction base and, as any changes to the service are likely to be known and approved in mid-2008, officers suggest that a 6-month extension to the banking contract is appropriate.

5. An extension of 9-months would enable tender documents to be prepared with a much higher degree of certainty about Waverley’s future banking requirements, following the outcome of the review of cash collection, and would avoid significant variations to the contract being necessary early in the new contract. Officers also believe that, potentially, a wider range of tenders and more competitive prices will be achieved if tenderers are given more certainty and fewer options to price.

Tendering the Contract

6. If Members agree to the extension of the existing banking contract, the following outline tender process and timetable will be followed:

Analysis of transactions	April-June 2008
Market assessment	April-June 2008
Initial conclusions of cash collection review	May 2008
Preparation of tender documents	June 2008
Advert placed in EU Journal and invite tenders	June 2008
Receive tenders and evaluation	July 2008
Approval and award	July 2008
Implementation and change-over if required	August/September

7. There can be significant business disruption and changes for many of the Council’s customers arising from a change in bank contract. Whilst any costs associated with a change of bank would impact on Waverley’s budget, the contract would be evaluated on the basis of cost and quality of service against pre-determined assessment criteria. Whilst officers would endeavour to implement any necessary change-over by 30th September, a 9-month extension to the current contract gives sufficient time contingency for unexpected.

Recommendation

It is recommended that, in accordance with the provisions of Contract Procedure Rule Q101a, the Executive approve the extension of the current banking contract for up to 9 months from 1st April 2008, on the existing terms and conditions, to coincide with the outcome of the review of Waverley’s cash collection arrangements.

Background Papers (DoR)

There are no background papers (as defined by Section 100D(5) of the Local Government Act 1972) relating to this report.

CONTACT OFFICER:

Name: Graeme Clark Tel: 01483 523236
E-mail: grclark@waverley.gov.uk

Comms/exec/2007-08/205