Agenda and draft minutes

Resolved to appoint Councillor Dan Harrison as Chair of the Committee for the 2025-26 municipal year.

Councillor Helen Kalsi

Stuart Fair (Gareth Robinson substituting)

None.

Minutes of the meeting held on 9 December 2024 for confirmation

The minutes of the meeting held on 9 December 2024 were confirmed as a correct record and signed by the Chair.

It was noted that the EMSS Strategic Plan for 2025-2029 has now been agreed with both Nottingham City Council and Leicestershire County Council.

Report of the Head of EMSS

Susan Baum, Strategic Finance Manager, Leicestershire County Council, presented the report providing an update on the outturn position of the East Midlands Shared Service (EMSS) and Oracle/ICT spend for the financial year 2024/25 and use of reserves, and also an update on spend against earmarked funding for continuous improvements, which are separate to the EMSS partnership contributions, highlighting the following points:

(a)  The overall outturn position for EMSS on 31 March 2025 (period 12) was £5.17m, which represents an underspend of £478k (or 8.5%) against the approved budget for the year. This represents an increased underspend of £175k when compared to the last report (March 2025, which was based on Period 10 forecasts). The main reasons for the change since period 10 relate to additional fees and charges income (£35k) and increased underspends on: staffing (£19k); implementation of the seeded absence project (£56k); implementation of paperless direct debit (£31k) and the MSP contract (£136k). These increased underspends were offset by an increase in consultancy fees (£55k) and an Academy debt write-off (£31k). The balance (£17k) related to various minor net overspends on operational costs across the services.

(b)  Included in the outturn is the 2024/25 agreed pay award, based on £1,290 for all employees below grade 13 (pro rata for part-time employees) and 2.5% for grades 14 and above. This totalled £177k and represented a £63k underspend against the approved budget provision.

(c)  In recognition of the overall underspend position each partner has received a reimbursement of £239k.

(d)  The opening reserve balance at the start of 2024/25 was £105k, which has been used to fund the seeded absence project, leaving a closing balance on the reserve on 31 March 2025 of zero.

(e)  Separate to the partnership budget and contributions are the HR/Payroll improvement project and the Fit for the Future legacy project budgets which were agreed at the Fit for the Future Programme Board in May 2022, with changes to funding allocations subsequently approved by later Joint Committee meetings.

(f)  The draft 2025-29 Medium Term Financial Plan was approved by the committee in December 2024 and, as there were no changes to the final budget, and no Joint Committee between December 2024 and June 2025, the final budget was circulated for information in March 2025. As no questions have been raised, it is considered to be approved.

(g)  The overall EMSS funding requirement for 2025/26 is £5.95m, which represents an increase of £302k (or 5.4%) compared to the current level of partner contributions. Included within this amount is the cost of EMSS stabilisations (£74k) that would otherwise have been funded separately, a provision for the 2025/26 pay award (£89k net of the prior year adjustment) and the change in Employers National Insurance contributions (£98k). A like for like cost comparison is effectively a £41k increase, which can be directly attributable to the one-off costs associated with project resource for the implementation of Redwood, OGL and Freshserve (£57k).

(h)  The 2025/26 budget includes a provision of 3.5% (£152k) for the pay award. The employers opening and “full and final” offer is a flat rate of 3.2% for all employees regardless of grade. Including on-costs this is estimated to cost £146k based on budgeted staffing establishment and is currently within the provision available. Early indications suggest this offer will be rejected, with negotiations ongoing. Consequently, there remains a risk that the final award may be higher than the provision made in the budget for 2025/26.

Members queried if there would be ongoing underspends, and were assured that forecasting is more robust so is likely to be more accurate moving forward.

Resolved to note

(1)  the outturn position of EMSS for 2024/25, reporting an underspend of £478k, with reimbursements to each partner authority of £239k;

(2)  the reserve position;

(3)  the spend against additional earmarked funding for completing the Fit for the Future programme and stabilising the Employee Service Centre and HR/Payroll System.

Report of the Head of EMSS

Elaine Simpson, Head of East Midlands Shared Services (EMSS), presented the report providing a summary of the performance of EMSS for 2024-25, highlighting the following:

(a)  On the basis of audit work undertaken during the 2024/25 financial year, the Interim Head of Internal Audit at Nottingham City Council concludes that a “moderate” level of assurance can be given that internal control systems are operating effectively within EMSS and that no significant issues had been discovered. Whilst the direction of travel for the three audits, from 23/24 to 24/25 has varied, substantial improvement can be seen from the Payroll Audit.

(b)  During 2024/25 EMSS has led and managed a significant number of priorities and projects. They have been varied in their focus, size and complexity; but overall have enabled savings and delivered efficiencies in the operational performance of the services.

(c)  Work is also well advanced on the review of the Oracle Support Service, which included a survey of key system users on the main functions of the Oracle Support Service, the results were presented to Joint Committee in the Q2 Performance Report. The conclusion of the review has been to add a new role to manage the relationship with Mastek, to ensure work and requests are being completed to time and to the required quality and oversee the quarterly update processes. This will free up the existing Oracle Support Manager to focus on the technical aspects of system design and development to reduce the reliance on Mastek and provide greater challenge and oversight. The role will also provide partners with advice and guidance on how to meet organisational objectives and help develop an Oracle Roadmap.

(d)  Both Oracle Guided Learning (OGL) and Fusion Data Intelligence (FD)I, formally known as Fusion Analytics Warehouse (FAW) have been fully implemented. Each product offers significant opportunities for improvements across users and partners. The implementations were delivered by the EMSS Oracle Support Service without additional costs.

(e)  Work continues to ensure that the security of the system is always improving so EMSS has been working with partner IT colleagues and Mastek to strengthen multi-factor authentication across all environments for all users.

(f)  The Redwood implementation continues, which is a new look and feel being rolled out by Oracle, and although colleagues have been working hard to meet Oracle’s deadlines, a significant GDPR issue arose that would allow some managers to potentially see data from employees in the other partner organisation, and Oracle are working on a fix for this.

(g)  A big development in customer service is the implementation of a new ticketing platform called Freshservice, which is a cloud-based Software-as-a-Service (SaaS) IT Service Management solution that follows the ITIL guidelines and best practices with a simple user experience. It brings standard IT processes like Incident, Service Request, Problem, Project, Change and Release management together into one Service Desk. This will also allow the business to better manage service requests for the ESC and FSC. The system retains all the benefits of the old self-service access but also includes new functions such as project management.

(h)  One of the main issues is getting sufficient feedback from customers. All customers receive a request for feedback once their query has been resolved, but response rates are low, so work to improve this has been ongoing, including simplifying the survey.

(i)  Overall sickness has fallen from to 2.22 days lost per FTE in Q2 to 1.57 in Q4. The days lost per FTE for 24/25 was 4.9, which is significantly under the target of 6 days.

(j)  Annual performance reviews (APRs) have been a priority this year, which has resulted in improved results, and they will be at 100% for Q1 next year.

(k)  The completion of mandatory training modules has improved slightly with 86% of all required training complete (up from 85% in Q2). The improved reporting function also includes training that has been started but not complete, currently 1%.

(l)  Due to key management absence and some held vacancies 2024/25 was a difficult year for the Employee Service Centre (ESC), however, despite these difficulties the ESC continued its upward trajectory of improving the services delivered to the partners. Emma Sutton was appointed the ESC service centre manager a with a clear agenda and vision for the service. Improvements include, quarterly ‘All ESC briefings’ that bring the whole team together and focuses on business updates alongside improvements required. Other initiatives include, monthly slide decks produced to support team meetings and the launch of Colleague Voice. This is an initiative for employees to get involved in shaping the future of the ESC, by making suggestions that will improve process or ways of working.

(m)  In 2024/25 the ESC processed 173,297 payments for NCC, LCC and external customers.

(n)  Accuracy rates of the payroll are based upon the number of errors identified by employees, managers or EMSS after payday. The performance for 2024/25 is 455 errors out of a total of 173,297 payments (a rate of 0.26%). This is an improvement on the previous year when the error rate was 0.45%.

(o)  Emergency payments are a new measure recorded in 2024/25 with a total of 205 emergency payments made (73 for LCC and 132 for NCC) The strategic plan will see further focus in this area to help reduce the need for emergency payments.

(p)  In Q4 the Finance Service Centre (FSC) made over 36,000 supplier payments totalling £248.2m for Leicestershire; and 32,000 payments of a value of £225.2m for Nottingham, a combined increase on the previous year. Over the financial year 159,000 payments were made on behalf of LCC and 155,000 on behalf of NCC.

(q)  The FSC finished the year with the number of supplier invoices on hold for Leicestershire at 2,890 and 1,683 for Nottingham. A significant positive reduction in the total number from the previous year when the numbers were at 3,029 for LCC and 2,154 for NCC. Invoices are held for various reasons such as no PO, price variance, duplications, and incorrect information contained within the invoice. They also include invoices that require coding and service area approval.

(r)  The average days to pay Trade Suppliers stands at 15.9 days for LCC and 13.1 days for NCC (excluding feeders), again a significant reduction on the previous year on year volumes and values are stable. The statutory requirement to pay all trade suppliers within 30 days is being met.

(s)  Q4 also saw FreshService go live, and the transition from Freshdesk to FreshService has been handled well. The functionality provided by the new system has improved how tickets are classified and reported, allowing for tickets to be accurately organised and prioritised across the service. Phase 2 of the implementation will focus on reporting and analytics and improved utilisation of the new functionality.

(t)  The project for the No PO No Pay (NPNP) policy for NCC is now underway, with go live estimated for Summer 2025. The FSC will be on hand to offer support post go-live date with any issues that arise.

(u)  The new debt recovery service operates with a strong emphasis on proactivity and accountability. Each collector is responsible for managing a defined portfolio of accounts, with a clear mandate to engage customers in advance of invoice due dates rather than waiting for balances to become overdue. This structured, forward-thinking approach ensures timely collections, strengthens customer relationships, and significantly reduces aged debt.

(v)  Over the financial year 2024/25, debt recovery has delivered a strong performance, achieving significant improvements in key areas such as aged debt reduction and proactive customer engagement. This year has been marked by strategic progress, laying a solid foundation for continued performance for the next financial year. This approach has contributed towards the stable position of aged debt, with the percentage of open debt aged over 90 days reducing from 5.3% to –0.43% for LCC and consistency in the year on year low percentage below 1% for NCC.

(w)  The Debt Collection Agency (DCA) project was also commenced in Q4. The FSC is in the final stages of implementing a partnership with a Debt Collection Agency “CDER Group” to support the recovery of sundry debt. The initial rollout is focused on LCC, with the intention to extend the service to NCC pending their final approval of the agency. The agreement will work on a no win no fee basis. The initiative is designed to ensure that all collection avenues have been exhausted before debts are taken down the Legal route.

(x)  Ways of benchmarking performance are being investigated and options will be presented for a solution in the future.

The following points were raised during the discussion which followed:

(y)  The turnover has staff has been due to the movement of around 8 key members of staff obtaining promotions and backfilling, which has been dealt with internally.

(z)  Benchmarking is critical and needs to be resolved as soon as possible, especially because public money is being spent.

(aa)  Emergency payments are usually due to contractual changes or new starters too close to the payroll deadline. The emergency payments allow employees to be paid on time, but there is a charge for budget holders to deter unnecessary emergency payments.

Lee Mann, Strategic Director of HR and EDI, NCC, thanked EMSS for their support with significant changes in HR at NCC.

Resolved to

(1)  note the performance of EMSS during 2024/25;

(2)  approve the strategic aims as set out in Appendix B to the report.

Report of the Head of EMSS

Elaine Simpson, Head of East Midlands Shared Services (EMSS), presented the report requesting approval to undertake a review of the Partnership Agreement in relation to adding and removing services from the partnership, highlighting the following:

(a)  EMSS and the Sponsors representative of the Partnership Agreement are of the view that there are some gaps in the current agreement that may cause some operational difficulties and need to be addressed, particularly in relation to the clauses that set out how additional functions can be added to the partnership.

(b)  The agreement does not stipulate the process for removing a joint shared service function, the process if one partner wants the service to remain, and the other wants it removed, or the process for amending an existing shared service provision already in place.

(c)  Business needs change, technology evolves and over time, those subtle changes and ways of working can become significant. The gradual churn in employees over time can create gaps in knowledge transfer and the understanding of the specific requirements that form part of the agreement.

(d)  There have been some examples recently between the two partners where changes have been requested but without following a thorough process, which has caused some confusion and delay. Having a clearer process set out in the Partnership Agreement will ensure change is managed more proactively in the future.

Resolved to

(1)  agree to a review of the Partnership Agreement Approval to include:

·  the process for removing a joint shared service function;

·  the process if one partner wants the service to remain, and the other wants it removed;

·  the process for amending and existing shared service provision already in place;

(2)  receive a report to the next Joint Committee meeting confirming any changes to be made to the agreement

To agree to meet on the following dates at 10.30am at Leicestershire County Council’s County Hall:

Thursday 11 September 2025

Monday 15 December 2025

Resolved to meet at 10.30am on the following dates at Leicestershire County Council’s County Hall:

Thursday 11 September 2025

Monday 15 December 2025