Agenda Item No. 4 – Appendix B

Update on the West Sussex County Council Street Lighting PFI Contract 1. Purpose of Update 1.1 Due to performance concerns noted in recent Total Performance Monitors

regarding the street lighting contract, Members of the Policy and Resources Select Committee have questioned the financial and contract management arrangements regarding this contract. The purpose of this update note is to clarify the current position on those issues, and reassure members of the actions being taken.

1.2 The focus of this paper relates to the contract monitoring and financial

management processes that are in place for this contract (in line with the remit of PRSC responsibilities). It does not however directly address operational performance because: a) operational performance remains a direct responsibility of the Strategic

Environmental Services Select Committee (SESSC) where appropriate monitoring is taking place on an ongoing basis, and

b) there is a generally improving picture with regards to performance – and, in particular, current performance relating to Lights in Light is the best to date during the life of the contract, currently reporting at 98.8% against a 99% target.

2. Background 2.1 On 19 August 2009 West Sussex County Council announced that it had

selected Tay Valley Lighting as its preferred bidder for the Street lighting PFI contract.

2.2 This 25 year, contract covers the investment, maintenance and operation of

street lighting, illuminated signs and bollards. Over the first 5 years (the investment period) it is envisaged that 80% of the 67,500 streetlights will be replaced. This is known as the Capital Investment Programme

2.3 The Capital Investment Programme and the on-going operation and

maintenance are delivered by SSE Contracting (SSEC) who also have responsibility for all public consultation, customer communications and complaint handling.

2.4 This contract has an estimated value of £339m over its lifetime and will be

funded by a combination of PFI credits (a grant from DfT) and WSCC budgets.

3. Current Position 3.1 The current position with the Street Lighting PFI is that after two years in

operation there have been many improvements that have been made when compared against the previous Contract. Notwithstanding there are some targets that have yet to be met mainly around the delivery of the capital investment programme.

3.2 There are many more lights operating correctly across the county than at any time in the past, the lights currently in light is measured at 98.8% against a target of 99%. The previous contract required a target of 98% and the

Agenda Item No. 4 – Appendix B

average performance achieved for that contract was 97.5%.

3.3 The previous contract required that lights would be repaired within 5 working days, however, the average time to repair never dropped below 7.5 days. The PFI service provider is required to attend any fault within 3 working days and is currently achieving 94% repaired within time.

3.4 The Service provider receives some 50 – 70 emergency calls each month and is required to attend any emergency within 2 hours of it being reported. To date every emergency has been attended within the two hours and many are attended with an hour.

3.5 The largest shortfall against the provision of the contract is noted within the column replacement programme where the shortfall currently stands at some 4500 installed columns. The service provider has installed in excess of 5000 new columns in the past two years which more than doubles any streetlighting replacement programme on record.

3.6 It should also be noted that the cost to West Sussex of these works in measureable terms is less than the previous contracts and can be ably demonstrated that a much improved service is being delivered now at less cost than in any time in the past.

3.7 As a result of the sound WSCC contract monitoring processes that are in place for this contract, effective negotiations have been taking place with SSEC to agree plans to address difficulties that have been encountered with the contract. This led to SSEC issuing a Recovery Plan document in January 2012 outlining actions to be taken. The key deliverables from this Plan include

a) Actions to support recovery on the capital investment programme - eg: - recruitment by SSEC of additional team management and administration

staff, and appropriate redeployment of existing staff to provide further stability and control over the recovery programme,

- recruitment of additional lighting operatives to support a shift away from significant reliance on subcontracted labour,

- provision of an additional jointing gang (via UK Power Networks), - employment of additional lighting design staff with a view to bringing the

design function in-house to ultimately improve the quality of design in meeting standards required, and reducing the potential for customer complaints, and

b) Actions to address failings by SSEC with their consultation and customer care process - eg:

- Appointment of a WSCC liaison officer with political management experience to improve communication and engagement with the public, and enhance partnership working with key stakeholders (this WSCC appointment has now been made - to start April 2012),

- Earlier involvement of planners, conservationists and environmental assessors in the design stage,

- Appointment of additional staff in the SSEC Customer Care Team.

3.8 Members can therefore be assured that progress on the Recovery Plan is now being monitored through robust WSCC street lighting contract monitoring processes, and there is strong ongoing commitment from both parties in this contract to work effectively in partnership to continue to deliver an enhanced street lighting system for the residents of West Sussex.