GATESHEAD TRADING COMPANY - Merlin Standardmerlinstandard.co.uk/downloads/attachments/adc43133dbe0fd8eb7… · around performance and processes are well understood all round, captured

TMX – Report Template V2 – 02.04.12

GATESHEAD TRADING COMPANY

Assessment Dates: 27/10/2015 – 29/10/15

Contents

1. About the Organisations ............................................................. 1

2. Assessment Methodology ........................................................... 2

3. Assessment Outcome ................................................................. 3

4. Areas of Strength ....................................................................... 4

5. Areas for Improvement ............................................................... 6

6. Areas Requiring Further Development…………….………..….…………7

7. Findings Against the Merlin Standard ........................................... 8

8. Conclusion ............................................................................... 22

1 TMX – Merlin Report Template V6 – 1.8.15

1. About the Organisation Gateshead Trading Company (GTC/the Organisation) is a private limited company established in 2008 and owned by Gateshead Council (the Council). The Council itself has recently become part of a new combined authority (7 councils in total) that covers a large part of the North East of England. The Organisation equally has projects across the North East of England, developing and delivering services to meet the needs of the local people and communities they work with and works in clear partnership with public, private and third sector organisations to meet shared goals and make a positive impact on society. The Organisation is based on the following constructs: Vision Gateshead Council has developed the following vision statement: “Local people realising their full potential, enjoying the best quality of life in a healthy, safe, prosperous and sustainable Gateshead”. Gateshead Trading Company has adopted this statement and expanded it to apply to the whole of their geographic reach. Values Here, GTC continues to adopt the operating philosophies of the broader Council and has built its principles on the following cornerstones: Integrity Inclusive Inspirational Contracts The principle contracts currently offered by Gateshead Trading Company include:

• New Enterprise Allowance (NEA) • Regional Youth Employment • The worklessness element of a Troubled Families contract on behalf of another Prime

contractor • Employability as part of a Work Programme contract for another Prime contractor, and • Construction Skills

The NEA contract is therefore the driver for this Merlin assessment, with the other contracts and projects being part of the wider consideration. Delivery has been designed to offer the entirety of direct delivery in Gateshead by GTC, with other Supply Chain Partners taking up the provision for NEA in the other areas. In some geographic areas more than one Supply Chain Partner is delivering services, though this follows previously established arrangements. Overall, GTC provides 6% of the NEA contract in the North east Contract Package Area.


2. Assessment Methodology This assessment is the Organisation’s first against the Merlin standard and, as identified above, the scope of the assessment was based primarily on Gateshead Trading Company’s NEA contract. The team comprised of Andy Richardson (Lead Assessor) and one team assessor: Chris James. At an initial planning discussion between the Lead Assessor and representatives of GTC, including the person acting as Coordinator for this Merlin assessment, a sample of Supply Chain Partners were identified that suitably reflected the make-up of GTC’s supply chain. From this sample, the Coordinator created schedules for each of the Assessors, modified marginally over subsequent weeks to accommodate the availability of individuals within the organisations selected. During the assessment, Assessors reviewed a diverse and substantial range of evidence, including written documentation and electronic systems. This was supported by face-to-face and phone interviews with representatives of GTC, collaborative partners and Supply Chain Partners.

Each assessor completed the schedule of interviews over the first two days of this assessment, convening on day three to share findings and agree scorings for each criterion within the Merlin Standard. These detailed findings were presented to a panel of senior GTC staff, at a feedback session on the afternoon of the third day. This feedback included the final outcome of the assessment, as well as providing an overview of the key areas of strength and areas for consideration when it comes to continuous improvement moving forward.


3. Assessment Outcome

Overall % 77% Overall Outcome Good Supply Chain Design Excellent Commitment Good Conduct Good Review Satisfactory


4. Areas of Strength A number of key strengths were identified during this Merlin assessment and summaries of these are given below. The numbers in brackets refer to the criteria of the Standard to which the areas relate. • Supply chain design has been shown to be of a high standard throughout all criteria of Principle

1. The scope and range of Gateshead Trading Company and its approach to understanding the commissioner’s objectives, researching pre-existing markets and legacy suppliers throughout the design process and actually consulting with the potential supply chain on supply chain and service design has all allowed for some very effective networks to be established with other local councils, Enterprise Agencies and organisational networks that include private and third sector organisations, all of which enable a diversity and depth to its provision. It will be these alliances moving forward that will play a major part in future stakeholder analysis and supply chain review. (1a.1, 1a.2, 1a.3 and 4a.1)

• Good up-front communications and consultation, through presentations, group discussions and one-to-one dialogue, enabled prospective Supply Chain Partners to understand what would be on offer throughout the contract in a highly transparent fashion. This included helping partners to understand the processes, relationships and reporting lines throughout the supply chain. Nor are the positive relationships experienced confined to the supply chain; GTC’s relationships with other Prime contractors have enabled them to enter into joint working agreements, for example in delivering the Work Programme and elements of the Troubled Families initiatives as a sub prime to other contractors. (2a.1, 2a.4 and 2a.5)

• Communications were cited by the vast majority of Supply Chain Partners as being highly effective, with open channels and free-flowing information. This has helped to identify and quickly resolve the vast majority of issues that occur within any programme and expectations around performance and processes are well understood all round, captured as they are in detailed contracts and Standard Operating Procedures (SOPs). (2a.4, 2c.3, 3c.4 and 3d.4)

• As the Enterprise Agencies were heavily involved in developing the bid for the GTC NEA programme, there are high levels of transparency regarding the costings, including the management fee. All those interviewed knew the split in payments between GTC and themselves and indicated that they felt this represented good value – as one Supply Chain Partner put it “we wouldn’t do it for that”. (2c.8)

• GTC has adopted the policies and uses the services of the Council’s HR specialists. With several TUPE situations under their belt, GTC have been able to demonstrate that not only do they have robust and effective processes and practices in place to manage TUPE, but that they are also able and willing to go beyond minimum requirements, offering excellent support to staff who are transferring out of the Organisation. In one situation, a secondment was instigated in order to meet the particular needs of a long standing member of staff, rather than insisting on a relocation under TUPE rules. (3a.2)


• Through the collaborative approaches described above, the supply chain is able to identify and share practice that it refers to as “different”, rather than best or good. In this way people are able to put practices forward as suggestions and recommendations without any sense of being judged. This approach together with frequent opportunities to discuss performance collectively as a group, have allowed Supply Chain Partners to build on their collective wisdom to good effect. (3b.8)

• Another area where GTC benefits from its links with Gateshead Council is in its approach to ensuring processes are in place to align the supply chain to its own commitment to Diversity and Equality. All the Supply Chain Partners were clear that Diversity and Equality are at the foundations of the working relationships and operating practices and commented that it is the clear match of values between organisations that attracts and retains partners. (3e.1)


5. Areas for Improvement

Whilst the Merlin Standard has been achieved, the following areas for improvement-could be considered for review and improvement. The numbers in brackets cross-reference the findings to the relevant elements and criteria of the Merlin Standard.

• In designing the supply chain in collaboration with the pre-existing members of the delivery network, consideration could be given to developing a strategy for wider engagement. This could then help organisations outside the existing network to play their hand and raise their profile with GTC, thus enriching the supply chain. (1a.1 & 1a.3)

• Reviewing the business relationships that exist, there could be advantages to be had from clarifying the roles of the mentors and to being clear on boundaries for information, advice and guidance, as there is a range of perceptions currently held, thereby providing for greater consistency across the mentor cohort. (2a.4)

• Whist SCPs confirmed that they had been asked to return an expression of interest in working with GTC, in some cases it appears that this was quite an informal arrangement. It is therefore recommended that a more structured and robust approach be taken to procurement, even where much of the supply chain pre-exists. This will allow for rigour and help to identify where development areas may exist and all applicants should then receive feedback on how their application has been judged, be they successful of not. (2c.1)

• The comprehensive nature of the GTC contracts is beyond doubt however, for some SCPs they are cumbersome and too detailed to be of real use in terms of establishing expectations. It is therefore recommended that some form of summary document be created that simply captures the essence of the details, whilst the main contract can be where the detail resides (as an appendix for example. (2c.3)

• Recognising that participant referral numbers are particularly low within the NEA contract (a national picture), it is recommended that GTC gives further consideration to defining and agreeing volume targets with the SCPs. This would help to manage expectations still further, as well as helping to identify performance improvements arising from the sharing of ‘different’ practice. Such performance could also become the focus of specific face to face review meetings were they to be introduced as part of the overall supply chain management strategy. (2c.5 & 3d.3)


6. Areas Requiring Further Development Although the Merlin Standard has been achieved with a ‘good’ outcome, there are a number of areas within the requirements of the Standard that need further development in order to support the organisation achieve excellence in supply chain partnership working. The numbers in brackets cross-reference the findings to the relevant element and criteria of the Merlin Standard. • In reviewing evidence of quality assurance, it would appear that much store has been placed in

the last 12 months on securing good quality ‘inputs’ through appointing experienced and effective staff and partners and in checking on policies and procedures as part of the initial due diligence process. The quality assurance of service delivery, including the provision of information, advice and guidance, data security, safeguarding and health and safety for SCPs could however be made more robust, for example by carrying out physical checks, ensuring that quality is maintained regardless of the delivery point. This is particularly relevant for the Business Mentors, as these can be family members, friends and other inexperienced mentors. Several SCPs commented that they have their own models and practices for this, including practice observations and accompanied meetings in some cases, and this may be worth further consideration and exploration by the management team at GTC. (3b.1, 3b.3, 3b.4, 3b.5 & 3b.6)

• Environmental Sustainability is a fundamental principle within the Council’s culture and, by default, GTC’s. A dedicated team of Council employees is able to collect and collate information, as well as design core strategies for the borough of Gateshead, with other local councils doing likewise. Recognising that the due diligence testing done at the procurement stage considers this aspect, there appears to be less focus on environmental sustainability as an ongoing indicator of performance. In essence then, it is recommended that GTC looks to define and communicate some clear targets for its supply chains to achieve, with specific objectives being agreed with each individual SCP. This will enable SCPs to be able to define their own contributions, as well as understanding just what is required of them in this regard. (3b.7 & 4a.6)

• A similar picture as described above equally exists for Diversity and Equality, with policies and practices being checked at the point of procurement as part of the due diligence process. What is currently lacking however, are processes for Diversity and Equality data to be collated and analysed by GTC and for any outcomes to be shared with the supply chains. This then is an area where development could help support supply chain understanding and identify how services are meeting local demographics. (3e.2 & 3e.3)

• With a strong philanthropic element to the culture and ethics embedded within GTC’s operating principles (very much geared to developing the economic infrastructure of the area), there are clear indications that supply chains have been designed and developed to meet some of the wider social needs of the various commissioners, for example health and wellbeing, employability and poverty. It is recommended however, that GTC looks to establish more measurable data on the impact that supply chain activities are having on these and other wider social objectives, in particular Environmental Sustainability (as described earlier). Impact could also be clearer around impact on criminality and homelessness, for example. This will help all members of any supply chains to identify their own contributions, as well as allowing GTC and the Council to create a corporate view of how its social agenda is making a difference. (4a.3, 4a.4 & 4a.6)


7. Findings Against the Merlin Standard

1) Supply Chain Design 1a) Supply Chain Design The scope and variety of the supply chain was found to be of a very high standard with a good representation of public, private and third sector organisations forming the network used to deliver and support services. This use of a diverse range of delivery partners, including local partnerships and other Prime contractors, enables the commissioner’s objectives to be addressed effectively. These wider social objectives are typically included in the Invitations To Tender (ITT) issued by the commissioner and form part of the considerations within the bid development process by GTC and its partners. The inclusion of certain Supply Chain Partners has enabled GTC to provide support for people with learning difficulties and health issues amongst others. The organisations within the supply chain are able to deliver services to a wide range of customer groups with varying needs. Supply Chain Partners were initially, and continue to be, selected based on pre-existing arrangements that take account of geographical coverage, experience and track record, as well as for their specialisms. Element 2c carries more detail of the selection process itself. There is clear evidence that GTC undertook effective research and consultation regarding local demographics and existing supply chains and delivery models, as well as employer and customer needs. In addition to an analysis of their own experiences in delivering a range of contracts, both as contractor and as sub-prime, this research consisted of discussions with various other Local Authorities, existing enterprise agencies, Local Enterprise Partnerships (LEPs) and other key players in the areas covered by the various contracts. These relationships have enabled Gateshead Trading Company to establish supply chains in a seamless fashion, even where timescales were tight and some potential partners dropped out at the last minute. “It made sense for us to work with NEEAL as they are the umbrella organisation for the enterprise agencies in the south of the patch. As the provider of enterprise advice services in the north, we’ve obviously worked with NEEAL in the past to good effect ”. (Manager). “Gateshead (Trading Company) spent a long time consulting with the network of (Enterprise) Agencies and I think that worked out well in terms of getting everybody to buy in to what was being proposed”. (SCP) Over the course of the contract bid development, there was evidence of an evolving supply chain and examples were provided of a small number of new Supply Chain Partners being brought in to reinforce and enrich the range of provision on offer, for example to provide additional support for people who are hard to reach, to support disabled people on Employment Support Allowance (ESA) and to provide specialist support for the high number of unemployed women in the area. GTC is also able to identify a number of organisations outside its own supply chain that are used to provide further support of a more specialist nature and this was confirmed in some of the discussions with Supply Chain Partners. Examples here include: Wider networks include Further and Higher Education institutes, Federation of Small Business and North East Chamber of Commerce, LEPs and business growth services.


“I think it’s clear that we were brought in as much as anything for the networks we have and who we know”. (Network Member) “We received a Referral Toolkit and that included a number of organisation outside of the supply chain that we could use to support customers”. (SCP) 2) Resources 2a) Collaboration, Cooperation and Communication The procurement processes for Supply Chain Partners within GTC were found to be both effective and transparent. Partners commented that they found the communications throughout the procurement process to be of high order and that there are good links to established best practice, for example the use of existing providers in the design of the supply chain. The communication processes included a number of presentations and collaborative meetings for all interested parties, together with emails, face-to-face discussions with existing networks and individual organisations. “The discussions we all had in the early stages were really useful for setting the scene and agreeing how we would go about things (as a supply chain)” (SCP) Following procurement, communications have continues to be excellent with Supply Chain Partners citing the effectiveness of discussions within the ‘task and finish’ groups set up, as well as ongoing emails and networking/partnership events. Quarterly partner meetings in particular received positive comments, with Supply Chain Partners positing that they found them to be open, honest and effective at challenging processes and identifying good practice currently in effect. GTC has certainly proved to the satisfaction of its Supply Chain Partners that they listen and act on what they hear through the range of feedback opportunities and communications have created a collegiate approach to managing relationships. “The Task Groups are really good and you can see how your suggestions are listened to and acted upon”. (SCP) Examples of consultation opportunities include Partner Meetings and Task and Finish Groups, Project Board meetings and ongoing dialogue with the GTC staff. This consultation has impacted on many aspects, including the application of procurer changes across the supply chain and the development of various system and processes to best meet the needs of Supply Chain Partners and service users, for example the development of the new CRM system and the design of an acceptable format for business plans. “We identified that our clients needed a different format for the paperwork and we were able to work with GTC to make the changes quickly and effectively”. (SCP) “We discovered that our local Job Centre was opening up training rooms above their offices and we let everyone know who might be able to take advantage of the facilities”. (SCP) All Supply Chain Partners were clear as to the business relationships underpinning supply chain arrangements now in place and there was no ambiguity evident. All operate under a formal contract and all offer end-to-end provision and do not sub-contract to other partners, though they may signpost customers to other providers, especially effective where additional funding may be available from other sources to support this alternative provision.


The Business Mentors are all volunteers and can be nominated by either the Supply Chain Partner, or the service users themselves where there is an existing relationship. This was the only grey area for some Supply Chain Partner staff as there were some differing views as to whose asset the mentor is, the Supply Chain Partner’s or the service users’. This may be worth further consideration by GTC and the Supply Chain Partners at some point in the near future. With effective working relationships becoming embedded at both senior and operational levels, the cascade of information was cited by all Supply Chain Partners to be good. In addition to the monthly Keep-In-Touch (KIT) discussions the Contract Director has with all Supply Chain Partners and the two-monthly Partner Meetings, GTC also provides daily and weekly email and phone contacts. “I think it’s clear that the partners all feel that communications are open and honest. You know you can get hold of **** at any time to discuss things and that he’ll get back to you quickly if you have to leave a message”. (SCP) “I’ve always found them to be open and honest and this has been there from the start” (SCP). 2b) Developing Supply Chain Partners With a high level of pre-existing providers in the supply chain, many Supply Chain Partners are already well established and at an advanced state of organisational development, requiring little in the way of further development by GTC. That said, GTC did provide examples of working with some partners in order to help build capacity and to develop strategically, for example during the Partner Meetings. In one case, an Supply Chain Partner received hands on support in order to develop their understanding of the NEA programme, another was guided and supported in looking to increase traffic into the programme and a third was coached on how to improve conversion rates. Others cited training provided to them by GTC and other partners and the sharing of key policies that GTC have developed and allowed some of the smaller Supply Chain Partners to adopt. “There were a couple of policies that we didn’t have to start with and Gateshead provided us with some examples and talked us through what they were looking for. That really helped us to develop our understanding and I think we’ve raised the bar as an organisation as a result”. (SCP) There is good evidence to show that additional funding streams have been brought to the attention of partners, e.g. funding available from West Ward to support people with hidden disabilities. Several Supply Chain Partners commented that they had been able to identify alternative bid opportunities as a result of advice and information from GTC and other members of the supply chain. There was also some evidence to suggest that some of the partners themselves had accessed additional funding from very localised sources and had shared these opportunities with other collocated partners. In regards to developing the staff within the Supply Chain Partners, there are many examples of training being offered, in the main associated with the data management systems and processes, but also including wider aspects such as social media training.


The training offered thus far has been without cost to the Supply Chain Partners and has been delivered either by GTC’s own staff, or by drawing in specialists as required, for example to brief on social media strategies. There are also examples of the Provider Meetings being used to support the professional development of the Supply Chain Partners. “We’ve done a lot recently on the YETI system and that’s been useful“. (SCP) “We weren’t able to make the YETI training session, so they arranged for **** to come out to us and we had some training on a one-to-one basis on our premises”. (SCP) With a number of developments planned, opportunities exist for GTC to expand the range of staff development available to supply chain personnel, in particular Business Mentors for whom this could provide a valuable source of Continuing Professional Development (CPD). Aspects such as Data Protection, Safeguarding, Health and Safety and Diversity and Equality could be particularly useful in this regard. 2c) Contracting and Funding From a thorough review of the processes and discussions with Supply Chain Partners, the contracting processes were found to be highly effective, fair and equitable by all those interviewed and, as identified above, communications are good throughout the process. The procurement process commences with preparation for procurement and includes the research and consultation efforts mentioned earlier, including discussions and consultation with intended supply chain partners and in the provision of events and briefing sessions with partners. This then moves on to formal bidding and winning the bids by GTC and concludes with contracting and transition into delivery. Application to join the supply chain is by the submission of an informal Expression of Interest (EoI) and the Contract Director in association with the operations staff considers these. For those selected to become part of the supply chain, applicants were put through a standard due-diligence process that included financial stability, Health and Safety and other policy and resource checks. This is an area where further consideration could be given to making the procurement more robust for future contracts (see recommendations). Partners commented favourably on the fact that the communications and consultation had made the funding arrangements and payment structure clear from the very start. Whilst just one funding model has been applied, this had been designed and agreed in consultation with key Supply Chain Partners. In one case, one of the network partners put up a special fund with which to support Supply Chain Partners significantly affected by the extrapolation of inaccurate claims applied by the commissioner. Due diligence also includes some financial viability checks as a standard item. Several partners indicated that cash-flow problems had been encountered due to the low volumes of referrals coming through the system, though certain Supply Chain Partners were taking their own positive steps to encourage more people to enter into the programme. “Everyone knew how much the bid was going to be. We all said what our minimum cost would be and we all went with it”. (SCP) Supply Chain Partners confirmed that GTC has devised and distributed effective and robust contract and guidance documents that clearly define the obligations of both the Company and its partners.


Supply Chain Partners confirmed that they are operating under a comprehensive contract with GTC and are clear on the obligations of all parties. “It’s quite a weighty tome, as you’d expect from the Council, but it’s fairly straightforward to understand”. (SCP) “We have Minimum Performance Levels built in to the contracts, so we know what’s expected of us.” (SCP) “To be honest, I haven’t read the contract in detail, as it’s just too detailed, but I’m confident that the information we were provided during the (initial) briefs is being followed through – I certainly know our expectations and am aware of minimum performance levels, for example 8 weeks for a business plan and 26 weeks for a successful outcome”. (SCP) Market share has been defined and agreed largely based on geographic areas, with a degree of flexibility when it comes to larger conurbations that supports multiple partners. Specialisms also play a part, allowing for some partners to provide their services across the CPA. As a result of the presentations and up front discussions in advance of contracts being issued, in which the delivery model was outlined, Supply Chain Partners are generally aware of how market share was allocated. Awareness of market share is reinforced through the regular performance statistics that are published and accessible to all Supply Chain Partners at the Partner Meetings. “We were given x places and we consider that fair and ‘doable’ as this is what we had discussed in the lead up to contracting”. (SCP) There is also evidence to show that proactive negotiation/consultation took place regarding volumes and expectations, with Supply Chain Partners being asked to identify the number of participants they had handled under the previous NEA programme. The cumulative total was then used as the basis for this new bid and the payment by result model used to determine the payment structure directly mirrors that of DWP and all partners are aware of this and its implications. The transfer of funds throughout the supply chain is working effectively for the vast majority of Supply Chain Partners, though in keeping with the programme nationally, there were a number of incidents identified where payments had been delayed due to inaccurate or incomplete paperwork. GTC has worked with partners to help them understand the very specific requirements of the procurers, including the need for paper-based records with which to substantiate claims. “I think there was just one time when there was a problem with payment and that was right at the start when the systems were just being developed – since then everything has been spot on”. (SCP). The initial consultations and discussions around supply chain and process design, together with contracting arrangements have done an effective job and all the Supply Chain Partners are aware of the general level of management fee and its purpose, citing the management information system, staff training, GTC’s infrastructure, the development of systems and processes, communication tools and the Company’s support generally. “I think the fee they take off is well worth what they have to provide to us; I know I wouldn’t want to do it for that” (SCP). “I wouldn’t want to be where they are. They’re actually doing a lot for the fee” (SCP).


At least one Supply Chain Partner however, felt that the management fee is excessive, though this partner was a latecomer to the supply chain design negotiations and was not party to the initial discussions and consultations. This may therefore, be worthy of further investigation by GTC. 3) Conduct 3a) Demonstrating Commercial and Business Integrity The working relationships between GTC and its Supply Chain Partners across the range of supply chains are generally at a high level and feedback from Supply Chain Partners suggests that these relationships are fundamental to the effective working of the supply chain going forward. The core principles and operating philosophy of GTC are shared by the Supply Chain Partners and all partner are clear that the aim is to target and support the more disadvantaged individuals and to promote the economic infrastructure of the area. The willingness of GTC to be flexible and to be influenced by Supply Chain Partners comments, demonstrates to the partners that the principles of being transparent are being carried forward in to day-to-day practices and behaviours. “We’re all working to the same aim and we’re all trying to achieve the same thing”. (SCP) With significant experience under their belt and the support of internal Subject Matter Experts (SMEs) available from Gateshead Council, the Company has demonstrated an excellent understanding of the TUPE processes and requirement, though only one person thus far ha fallen in scope for TUPE. GTC representatives were able to provide a high degree of support to this person in order to address any misgivings or particular needs. Regular meetings and discussions and frequent emails from a Specified Person of Contact (SPOC) all helped the affected member of staff to make the transition and allay any concerns they might otherwise have had. In reality, GTC arranged for the individual not to be TUPE’d, but to be retained by their previous employer and to be seconded to GTC, as they had expressed a keen wish not to relocate. As identified earlier in this report, the relationships and interactions between GTC and its Supply Chain Partners are wholly positive and commented that they have found the Company’s staff to be helpful, approachable, trusting and trustworthy. One Supply Chain Partners described how GTC ‘went out of their way’ to offer support to them – they were new to NEA and GTC met with them and discussed the processes on numerous occasions to ensure they didn’t feel ‘left on our own’. GTC staff meet with Supply Chain Partners at the Partner Meetings on a two monthly basis and there are operational discussions held by email at least twice each week and the GTC Contract Director has KIT discussions with NEEAL on a monthly basis, whilst the Performance Manager has monthly discussions with each Supply Chain Partner. Supply Chain Partners commented on the highly positive and effective relationships they hold with the Company, from senior management levels within GTC to front-line operational staff. Changes and updates to guidance relating to legislation and statutory change requirements are notified effectively through discussions and emails and these are again reinforced within the Partner Meetings and KIT discussions. The effective relationships and open dialogue provide for a good degree of understanding amongst Supply Chain Partners regarding interpretation and implications of funding, regulatory and legislative changes.


3b) Quality Assurance and Compliance From discussion with GTC staff and SCPs, Quality Assurance (QA) processes and practices are considered to be in need of further development at this time. Quality assurance is largely driven by the checks done at due diligence stage and by the use of well qualified and experienced partners. The basic premise is that GTC believe in building good quality in, rather that examining poor quality out. 100% Provider Referrals and Payments (PRaP) checks are conducted and the business plans produced by the service users are reviewed both by the Supply Chain Partners and by GTC to establish levels of acceptability. In some Supply Chain Partners, the Business Mentors are accompanied by a fully qualified Business Advisor, though in others they are not on a consistent basis. Customer progression and feedback is also considered as part of the assessment to determine whether or not a quality service is being delivered and periodic surveys of service users are undertaken. It is therefore strongly recommended that the approach to quality assuring services at the actual point of delivery is reviewed, with a view to developing robustness and consistency. Supply Chain Partners commented that they have found the Partner Meetings to be useful for discussing quality issues which have then been picked up in the discussions with the Quality/Performance team at GTC and with the Contract Director at their monthly KIT discussions. With an emphasis on performance and compliance thus far, it is difficult to evidence how GTC have used the findings of quality assurance activities to inform and improve delivery. Focussing on quality assurance will allow GTC to not only monitor service delivery, but to also provide additional feedback on quality and other issues to SCPs and help them to understand where their suggestions and requests have been actioned and the impact this has had. Through its supply chain design and with well established supply chain partners, many of whom having a long history in the field of Information, Advice and Guidance (IAG), GTC is able to demonstrate that access to suitable provision is made available and promoted to service users. GTC itself is accredited with the matrix Standard. Through the various communication channels, networking approaches and one-to-one dialogue, all Supply Chain Partners are aware of the IAG available in their geographic areas and commented that the IAG they receive from GTC is of a good quality. As above with the quality assurance comments, little is currently in place to monitor the effectiveness of the IAG to services users at the point of delivery, other than that performed by the SCPs themselves. “Observation and shadowing is happening among our advisers but not because of Gateshead”. (SCP). It is recommended therefore, that the management team consider how the quality of IAG can be more robustly and comprehensively assured at the point of delivery, both for Supply Chain Partners and for internal staff providing IAG to partners. Data security within GTC is guided by the PSN compliance system in keeping with the stance taken by the Council and is reviewed for Supply Chain Partners during the Due Diligence process at the procurement stage. Emails are all encrypted and permissions levels ensure that data is ring fenced and only accessible by appropriate persons through the YETI system. There has been no penetration testing or site visits to Supply Chain Partners carried out for this purpose to date.


Equally, there was found to be inconsistencies in how the Supply Chain Partners themselves monitor data security for the Business Mentors, though a number of partners do ask their Business Mentors to sign a data protection agreement. Data protection does however, feature in the contracts that SCPs sign. “The Business Continuity Plan template had some value for us”. (SCP) Health and Safety policies are equally assessed at the initial stages as part of the procurement process and again Supply Chain Partner policies are checked. In the event of any shortfall, or corrective action being required, an action plan is drawn up with the partner and agreed with their GTC contact. There are however only informal approaches to monitoring health and safety beyond the initial due diligence stage, for example as part of regular site visits. A similar situation exists for safeguarding, with initial checks on policies in place through the procurement processes. The HR Team within the Council effectively acts as the ‘Designated Safeguarding Officer’ (DSO) for GTC, providing advice and support as required. All Supply Chain Partners are required to evidence that DBS checks have been done for appropriate staff and with safeguarding having a high profile, many partners have developed their own approach and policies and many have undergone specific training in this regard, though this is a topic where further guidance and support, for example to Business Mentors, could be made more widely available by GTC. Monthly management information returns capture related data, although there have been no reported, or identified incidents since contract start. With both safeguarding and H&S, there remains a need to continue the work to drill down to the Supply Chain Partners and beyond to the Business Mentors. There are policies in place throughout the supply chain related to Environmental Sustainability (ES) and this forms part of the selection criteria for all supply chain applicants and is an integral part of the due diligence activities undertaken by GTC. GTC itself is subject to DWP audits on a regular basis and these factor in their approach to environmental sustainability and build on the good work done by the Council. Whilst GTC has made some excellent strides forward in starting to understand its own approach and impact towards Environmental Sustainability, for example in reducing CO2 emissions and easing fuel poverty, there are currently no targets defined to improve performance against any broader metrics for the supply chains, for example related to business mileage or energy usage, beyond those that the Supply Chain Partners may have in place of their own volition. “I think we are all aware of the sustainability issues and do our best with things like recycling, but we don’t have any targets to achieve in this way”. (SCP) Throughout this assessment, there are emerging examples of ‘different practice’ being shared and demonstrated, e.g. during the Partner Meetings where Supply Chain Partners are asked to ‘showcase’ their approaches. NEEAL, the umbrella organisation for the Enterprise Agencies, have taken on board the role of visiting all Supply Chain Partners in order to identify and share examples of where practices are away from the norm and may prove to be beneficial to partners. A recent example of an effective showcase can be seen in that the Business Innovation Centre write to their clients to explain the full journey ahead. Other Supply Chain Partners have now picked up on this and are following suit.


“We’ve also produced leaflets and we now promote ourselves proactively within JCPs to Advisers, without infringing branding guidelines….picked this up from another showcase…..working well” (SCP). Comments made by other Supply Chain Partners were very positive when describing GTC’s approach to identifying and sharing good/excellent practice, with several citing improvements they have made to their own approaches and processes as a result of hearing what other partners have done. “We identified how service users could better use market research when developing their business proposition as a result of an approach taken by another provider”. (SCP) “Best Practice is on the agenda at all our Partner Meetings and I think that works well for everybody. People get the recognition for innovative approaches and others learn from them”. (SCP) 3c) Honouring Commitments GTC has managed Supply Chain Partner expectations well with effective and improving communications throughout the procurement phase and during live running. Expectations have been clearly defined from the outset and communicated in both written format through the contracts and variations and verbally through discussions and consultation. Within this assessment, partners confirmed their understanding of these expectations and that post-contract arrangements reflect pre-contract agreements. The only change has been in the percentage of finance paid at each stage that Supply Chain Partners understood was due to DWP. This change hasn’t affected the amount overall partner are paid however. In discussing the complaints procedure within the GTC supply chain, partners were generally aware of the dispute resolution processes and how to access this through the Contract Director within GTC should the need arise. Again, the vast majority of Supply Chain Partners interviewed indicated a good level of satisfaction with regards to concerns being quickly addressed and in a positive manner. The low volumes of formal complaints is due largely to the positive relationships existing between GTC and its supply chain partners, with any concerns being addressed as they occur, drawing in senior GTC staff as appropriate, where the issue determined that it be escalated to a more senior level. GTC senior staff also indicated that the Organisation would abide by any decision made by the Merlin Mediation Service (MMS), though this service was relatively unknown to the specialists, due in the main to the fact that it has not been required to this point in time by any Supply Chain Partner. Whilst no such cases exist, all those partners interviewed in this regard commented that they felt GTC would abide by any findings of an external adjudicator, but that in their experience, they felt the Company would work to resolve any issues before this became necessary, as this was part of their values set. As identified earlier in this report, expectations regarding processes, practices, performance and standards have been fully discussed and agreed as part of the bid development process and subsequently built into contracts and Standard operating Procedures. These expectations continue to drive the KIT and performance discussions and are a key feature of the bi-monthly Partner Meetings.


3d) Performance It is clear that the supply chain has been encouraged effectively to work collaboratively, e.g. in the partnership approaches and in the sharing of facilities and ‘different’ practice through the mechanisms mentioned earlier. The regular email and phone contacts, KIT and performance review discussions and attendance at Partner Meetings also evidence GTC’s approach to working in partnership and collaboration with its Supply Chain Partners on an ongoing basis. This communications infrastructure provides for partners to review and discuss developments and requirements across the network. Further encouragement by GTC for Supply Chain Partners to collaborate in sharing resources, for example mentor specialisms, could also reinforce this supportive approach to supply chain development and position the Company as a catalyst for change and improvement in the eyes of the supply chain. GTC has demonstrated effective performance management processes and practices, primarily through the PRaP monitoring, the check on business plans and during the bi-monthly Partner Meetings, where performance data for the whole supply chain is shared and discussed. These discussions are underpinned by the Standard Operating Procedures document and the Management Information (MI) system that provides the raw data on performance. Opportunities exist for Supply Chain Partners to raise issues and discuss concerns at these meetings and these are shared across the operational teams within GTC and the wider Council if deemed appropriate) in order to resolve them effectively. Innovative ideas and lessons learned (‘different’ practices) are also noted and shared across the network through emails and ongoing discussions, though at this time there is no central log of lessons learned in this fashion. “The agenda the Partner Meetings always includes a review of performance and we make sure we send different people each time to give the all a taste of what goes on”. (SCP) “Innovation is now showcased at the Partner Meetings and has been useful, for example in helping us to promote ourselves to service users”. (SCP). Any under-performance identified within a Supply Chain Partner results in targeted discussions as to how this will be addressed and this drives more frequent reviews, until such time as the shortfall is addressed. Several examples were provided of partners needing to improve performance for example in their conversion rates and then working alongside their Performance Manager to identify the causes of the poor performance and introducing measures to remedy with the effect that conversion rates improved. There may be advantages to be had from GTC taking a more ‘pro-active’ and robust approach to performance management and relying less on Supply Chain Partner’s own approaches. Regular (physical) meetings could prove most beneficial, as these could address many of the issues identified in Element 3b above, whilst monitoring performance. Through good communication and regular updates, Supply Chain Partners confirmed that they are very clear as to their performance expectations and that the review processes and meetings infrastructure provide for effective analysis of such performance. Partners are updated bi-monthly at the partnership meetings and this allows all members to see their performance as compared to others. “We’ve all worked closely together now for some time and have an easy alliance. We don’t have any concerns in sharing performance figures and, in fact, this can sometimes help”. (SCP)


The YETI management information system is now becoming an established piece of technology that has developed over time with input from the supply chain itself and now has the capability to store, analyse and report information in a comprehensive manner, though it is still relatively early days at this time. Supply Chain Partners commented that they had thus far not been able to use the reporting features of YETI to analyse their own performance, relying instead on their own, often manual systems. GTC is aware that the previous Management Information System (MIS) fell short of requirements and has, hence, commissioned the use of YETI. “It can be frustrating, having to re-input data, But I feel sure Gateshead are doing everything they can to sort out the glitches”. (SCP) “We’re running two systems at the moment and that’s not ideal, but it means we can keep on top of things and I’m sure Gateshead will resolve the issues – it is in all our interests after all”. (SCP) GTC has built the concept of Value For Money (VFM) into all aspects of their negotiations and contracting processes and the general feeling amongst Supply Chain Partners across the range of contracts is that VFM is discussed effectively. That said, those partners questioned indicated that VFM is very much dependent on the volume of referrals and that these had been roughly half the numbers anticipated at the bid stage and, as a result, most Supply Chain Partners felt they would be in a loss making situation and therefore, that the contract did not represent value for money despite the costing model being designed to provide VFM. In at least one case however, Supply Chain Partners are able to support their Work Choice clients through NEA and so believe that it this represents VFM for them and the client. In looking to measure and encourage demonstrable outcomes and performance improvements, for NEA, the main criterion is the customer journey milestones (8 weeks to deliver a business plan, acceptable conversion rates and 26 week outcomes). This is monitored for all contracts through the MIS and, as such, GTC has established effective processes to determine ‘distance travelled’. For the other services/contracts, a more robust and complex approach is taken to monitoring distance travelled, due to the more complex issues at play with some of the client groups, for example, those within the Troubled Families programme. The tracking of ‘distance travelled’ for participants within NEA tends to be left to the Supply Chain Partners own devices however and has not been a priority thus far. There may be some benefits therefore in GTC looking to bring partners together to look specifically at this aspect at a Partner Meeting at some point. 3e) Promoting Diversity and Equality Diversity and Equality (D&E) is seen as a key issue for all service users and stakeholders aligned to the basic principles and ethos of GTC and in keeping with Gateshead Council. All those within the supply chain are required to have and maintain a D&E policy that at least matches that of GTC and compliance with this requirement is confirmed during the procurement process. Thereafter, Supply Chain Partner discussions and Showcasing sessions have helped to define expectations and all partners said they believed that even though there is a difference in the polices and wording that generally their policies are aligned with GTC. In collaborating and designing the supply chains, GTC were able to contract with Supply Chain Partners that share its own beliefs and values, including those related to diversity and equality.


The partnering Primes and other large stakeholders of GTC have very clear guidelines and requirements in this respect, leading to a high degree of visibility for this issue and, through the good offices of GTC, all Supply Chain Partners are clear as to expectations. The promotion of D&E is therefore good however, the MIS is currently not designed to capture diversity and equality data and any data on take up of provision compared to their own demographic data is currently being undertaken by Supply Chain Partners themselves, though this is equally inconsistent. Supply Chain Partners however, felt confident that the new YETI system would be able to deliver this data in the fullness of time and that eventually they would receive such comparative data, though until then, they would rely on their own processes and analysis. One Supply Chain Partner commented that they believe their clients used to be predominantly male, but the mix is now more balanced. They also commented that they feel this is a reflection of social change but they don’t formally monitor this aspect and have not currently evaluated any changes. “E&D formed part of our initial due diligence and we’ve had to submit a copy of our policy to Gateshead for them to confirm it’s OK”. (SCP) “It’s an important issues for all of us, but I think we’re all a bit behind the curve when it comes to monitoring diversity issues”. (SCP) With the YETI system as an emerging piece of technology, many Supply Chain Partners are, as yet, unaware as to how GTC will analyse this data to inform future service delivery, or how it links to the wider policy and objectives of the commissioner and this may be worthy of making a priority for the future. 4. Review 4a) Supply Chain Review Feedback has been collected from a wide range of stakeholders such as service users, Supply Chain Partners, staff, other local authorities, Chambers of Commerce, Local Employer Partnerships (LEPs), Strategic Partnerships, third sector organisations and of course, DWP and central government, through formal processes such as performance review meetings, national and local networking and though informal situations. Customer complaints and compliments and survey results (where Supply Chain Partners carry out such activities) also feed in to the supply of review data to good effect. Effective relationships with these stakeholders all provide for a rich vein of information and feedback and there were several examples of this information giving rise to improvements being made to both practices and processes throughout the supply chain. These examples include the development and sharing of resources, the Showcasing and sharing of ‘different’ practice and the innovative approaches to generating interest in self-employment. Whilst GTC will be required to produce a Self-Assessment Report (SAR) for the NEA contract, a full year has not yet passed. In reviewing GTC’s approaches to other contract delivery, it is clear that the Company has adopted effective practices in this regard previously. Indeed, where GTC operates as a sub-Prime to other organisations, GTC have indeed produced their own version of a SAR and therefore have good first hand knowledge and understanding of requirements.


An example of how the SAR process had improved performance can be seen in the Troubled Families programme where a review of Phase 1 through a SAR process gave rise in Phase 2 to improved in-work support and approaches that helped family members to reduce the time taken for them to move into employment whilst on the programme. “We also identified that Benefits Teams didn’t know enough about how changes to the benefits system would affect people going in to self-employment, so we’ve been able to address this”. (Manager). There could therefore be advantages to be gained in requesting that all Supply Chain Partners produce their own Self-Assessment Report (SAR), against a pre-agreed set of subject headings, including the Business Mentors. Not only would this help GTC to see where SCPs position themselves, it would also help to support a strategic review within each SCP, something that typically these businesses are weak at. Producing a supply chain SAR and Quality Improvement Plan and publishing them for access by Supply Chain Partners could help to further the transparency of GTC’s approach. Discussions with Supply Chain Partners at all levels have shown the communication channels identified earlier within this report to have had some effect on keeping the supply chain up to date with information on the wider policy and strategy of the various commissioners. The design of the supply chain and subsequent changes (see below), equally demonstrates a clear commitment within GTC to the wider policy and objectives of the various commissioners. Whilst some members of staff within the Council are able to perform Social Return on Investment calculations, this has yet to be utilised within the GTC provision. Some of those Supply Chain Partners interviewed were aware of the commissioner’s wider objectives, as well as the part they will be playing in contributing towards them in a demonstrable fashion, although this is inconsistent and tended to relate to their own area of expertise and interest, rather than across the contract. Many Supply Chain Partners commented on the usefulness of the supply chain meetings, regular emails and the discussions with the Contract Director as vehicles for keeping them updated on the wider policy and strategy of the commissioner in broad terms. “One of our partners is helping people in the more remote rural areas to access enterprise support where they want to start their own business and another is helping to improve access to affordable loans”. (GTC Staff) Other Council wide initiatives such as the iHouse, will also start to have significant impact on Environmental Sustainability. With the contacts and connections across a wide range of stakeholders, GTC is now well placed to further develop this understanding of impact. (see recommendations). The introduction of various specialists into the supply chain over the previous year or so, for example to better meet the needs of disabled people and those with financial challenges, are clear demonstrations of how the supply chain has evolved over time to better meet the changing needs of service users and stakeholders of all types. The design and activities of the supply chain have without doubt had a positive impact on such aspects as customer health and wellbeing and employability, though there is a tendency for the positive outcomes to lean towards the anecdotal. This report also carries comments about the need to bolster the approach to driving environmental sustainability more robustly through the supply chain.


Opportunities therefore now exist to extend the range of data collection to other stakeholders, e.g. by engaging with the health sector, the various housing associations, environmental groups and the justice system, in order to better understand the wider impact of the supply chain on the commissioners’ key social objectives.


8. Conclusion GTC has exhibited practices and behaviours that fully meet the requirements of the Merlin Standard and several areas of good practice have been demonstrated and yet more are emerging. It was evident to the assessment team that Gateshead Trading Company has drawn on its connections and experience in the marketplace to forge some highly effective collaborative approaches, which in turn have led to effective working relationships at all levels. These relationships have been accompanied by ever evolving systems and processes, all developed with good consultation with SCPs and this in turn is starting to lead to improved performance all round. Supply Chain Partners confirmed that GTC has established the positive behaviours expected of a Prime contractor organisation - and that the developments to strategies, policies and processes deployed since the NEA contract go-live date have resulted in a supply chain that is increasingly able to meet the needs of the various stakeholders. Some work has yet to be done around embedding environmental sustainability, Diversity and Equality and the wider social objectives of the commissioners across each of the supply chains, however good work is already underway and clear plans are in place to take many of the development areas identified in this report forward. If these plans are followed through effectively, the next six to twelve months should see GTC make significant strides forward.

Assessment Type INITIAL

Assessor’s Decision STANDARD MET

Lead Assessor’s Name ANDY RICHARDSON

Visit Date 27/10/2015 – 29/10/15

Client ID C18517

Documents

GATESHEAD TRADING COMPANY - Merlin Standardmerlinstandard.co.uk/downloads/attachments/adc43133dbe0fd8eb7… · around performance and processes are well understood all round, captured