The provision of banking services – Oldham Council

Posted on 1st July, 2014

Introduction

Oldham Council’s current banking contract with the Co-operative Bank is due to end on 31st May 2014, therefore in-line with our CPR’s and EU Regulations we carried out a tender process to secure banking services.

Due to the current instability of the Co-Operative Bank and potential opportunities to secure innovative banking solutions from alternative providers it was agreed that we would go to the market to secure a new provider, rather than invoke an option to extend the contract for a further 2 years.

Background

A specification was issued with the tender documents which included an overview of our current requirements and also a key focus on opportunities for innovation, sustainability and added social value.

We received bids from Barclays Bank, Lloyds Bank and Nat West Bank.  The Co-operative Bank declined the opportunity on the grounds that their current business strategy is not to contract any new business with Local Authorities.

A full and detailed evaluation was carried out by both Procurement & Finance and bids were scored in accordance with the tender: 60% technical/service quality and 40% price.  The table below sets out the scoring of the tender documents and clearly shows that Barclays had the highest score on both technical content and pricing.

 

  Technical (60%) Pricing (40%) Total
       
Barclays 48.4% 40.0% 88.4%
       
Lloyds 44.9% 28.2% 73.1%
       
Nat West 42.7% 12.1% 54.8%

 

Given the current level of business that is undertaken by the Council, the current t spending under the contract with the Co-operative bank is £47,679 p.a. The successful bidder, Barclays Bank proposed an annual contract cost of £35,188 p.a. (assuming the same level of business) giving an estimated saving of £12,491 p.a.

In addition, we secured 6 months free banking in year one only, representing an estimated further £17,957 saving in the first year.

Innovative Solutions

In addition to the cost savings the Barclays solution also gives access to a number of innovation banking solutions including:

AMS – Account Management Solution

BarclaysAMSis a unique market leading money management software solution able to optimise the client funds process, including individual virtual client accounts, flexible accounts structures and interest calculations, client statements and automatic reconciliation. An area where AMS has an outstanding fit is Court of Protection Arrangements.

Barclays ‘Pingit’ for Corporates

Barclays Pingit is the UK’s first instant mobile payments app for smartphones and is at the cutting edge of banking technology. It facilitates quick, simple and secure payments without requiring traditional account details during the payment process, so it’s easy to make payments wherever you are, whenever you want.

Added Social Values

Social value means getting the greatest possible impact from the money we spend – not necessarily just opting for the cheapest contract, but making sure we get the best social, environmental or economic value overall for Oldham.

As a co-operative council, we are committed to securing the best possible outcomes for our borough – social value offers us an important way to do this – and in June 2013, Cabinet signed-off a new framework for procurement which means that we will include social value outcomes in every new contract we let.

In line with Oldham Council’s Social Value Procurement Framework, the tender document included a section which asked each of the bidders to indicate how through their approach, they could demonstrate how they would be adding social value to the contract and below is a summary of the innovative approach to this area provided in Barclays’s submission:

LifeSkills

“Barclay’s target is to reach over 1million young people through LifeSkills by the end of 2015. Essentially, we are offering teachers a range of free resources designed to develop the skills employers most seek in young people covering topics such as CV writing, managing money and building self-confidence. After students have completed the modules in the classroom or online, teachers can then match students to local work experience opportunities. We use our contacts in the business community to find suitable placements. The take up from businesses has already been very high although stats on specific placements will not be available until the scheme has been up and running for a while longer.”

Apprenticeships

“With regards to apprenticeships in the Local area, Barclays have taken 32 apprentices to date in and around Manchester. 26 of which were in Manchester, 1 in Oldham and the other 5 around the rest of Greater Manchester. Barclays Corporate also has 9 apprentices at our Gadbrook Park centre in Cheshire and a further 76 apprentices were taken on last autumn as part of our Technology Apprentice Scheme in our Radbroke centre in Cheshire. “

MoneySkills

“Barclay’s have also successfully delivered our flagship UK community program, Barclays Money Skills, to 26 schools and colleges in the Oldham area. This is an industry leading initiative where we try to help people develop the skills, knowledge and confidence they need to manage their money more effectively and become more employable.”

Parish Banking

“Barclay’s host events at our flagship branches in Greater Manchester Boroughs to bring together key people in the area with a view as to how we can all work together to improve employment, social inclusion and various other areas. Again this is a relatively new program and so far we have held these in Bolton and Rochdale with a Bury event organised. We aim to host these events in all the GM boroughs including Oldham by the end of 2014. The previous events have been attended by business leaders/ key employers in the area/ Council members/ Mayors have also attended.”

Other plans

“Barclay’s are looking to link in with Terry Flanagan at Mahdlo to see if we can deliver some of the above programs and maybe have a monthly slot where we send volunteers from all areas of the bank to help teach things like interview skills (and maybe more fun things) to the young people there. Last week we held an event in conjunction with Salford Diocese, where we provided £ for £ matched funding for all money raised, at St. Edwards church in Oldham.”

Summary

It is intended that the contract will be formally awarded to Barclays on Friday 13th December, although the official contract commencement date will is 1st June 2014, it is envisaged that the contract will be in place and operating from 1st April 2014.

The lengthy lead in period is necessary to ensure that all transactional activities are ready to transfer, or go live, on or by the 1st April 2014. For example, household Council Tax bills for the financial year 2014/15 will need to be issued with the new Council banking details on them.

An initial meeting with Barclays has been arranged for 17th December, to formulate a detailed implementation plan. The incumbent Co-Op Bank have given assurances that they will work with the Council, and Barclays Bank, to fully support all activities related to the transfer of banking responsibilities.

To discuss this case study, contact Karen Lowes, Head of Strategic Sourcing at Oldham Council, at karen.lowes@oldham.gov.uk.