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RESOLVED:
 
1. 
To approve the procurement strategy for the re-tender
of the security service framework for the duration of four years
for regular and ad-hoc security requirements, and concierge
services.
 
2. 
To note that the Council’s security services and
housing concierge requirements will be procured as two separate
lots under this procurement exercise.

 
Reasons For
Decision
 
1. 
The 24 month extension of the current security service contract
secured in August 2023 was agreed on the basis that the Council
would explore:
 
· 
Insourcing option: in line with the Hackney Insourcing Model,
undertake the development of a business structure and financial
model to establish an insourced council service. 
· 
Reprocurement option: with a focus on
identification of opportunities for modernisation and cost
efficiencies.
· 
Modernisation & optimisation of the estate: identify and shape
critical upgrades to the CCTV Infrastructure to enhance the
security provision and enable cost savings through insourcing
and/or reprocurement.
 
2. 
The Concierge Services was established in Hackney in the
1980’s-90’s across 13 locations. Initially conceived to
provide reception and security services, it evolved into primarily
a security service with functions such as admitting residents and
visitors, supported by CCTV surveillance. Despite its initial
purpose, concierges continue to perform traditional reception
services such as taking messages and receiving parcels.
3. 
The introduction of concierges and CCTV has proven successful in
reducing crime in the area, including squatting, graffiti, criminal
damage, unauthorised access (rough sleeping) and drug-related
activities. We recover the entire cost of the service £1.3m,
from tenants and leaseholders receiving the service.
4. 
The initial Concierge security service contract was awarded on 4
August 2018 and ended 3 August 2022. It was extended for a year,
for some feasibility work to take place and extended again for a
further 2 years by Cabinet Procurement and Insourcing Committee in
August 2023. Therefore, the new 
contracted service provider must be in place and operational by
July 2025.
5. 
The Landlord and Tenant Act 1985 governs service charges, which are
variable and related to actual costs incurred for estate
management. The consultation process will seek residents’
preferences regarding the continuation of concierge services,
operational hours, and service levels and is different to statutory
leaseholder consultation.  There are
currently 125 leaseholders who contribute towards the concierge
service and the Council must undertake Section 20 consultation with
them all. Section 20 consultation with residents for Lot C has now
completed.
6. 
The vacant premises security (Lot B), which comprises regeneration
sites and projects has a core workforce of 27 staff. The service
fluctuates in demand due to changes in the number of vacant
premises at any given time, and the duration of the additional
demand for security provision varies depending on the period of
time the premises are vacant. This generates significant financial
and business continuity risk to an insourced model from the ease of
resource scalability required to satisfy quick paced demand
change.
7. 
The Residential Concierge security (Lot C), which comprises the 13
tower blocks and is funded by residents, has a core workforce of 26
officers.
8. 
These numbers do not include supervisory, management or response
officers working across more than one Service Lot.
9. 
The Council’s first review of the account (comprising 16
sites across all 3 security service lots) undertaken by independent
industry experts, concluded that LBH does not have the maturity in
service experience to insource under its current model, and that
the Concierge and Vacant Premises services should remain outsourced
due to the nature of the services.
10.Retaining an outsourced service
also provides the level of management expertise afforded via
industry professionals, which is not an intrinsic skillset within
the Council. Including the management of specialist services such
as dog handlers too.
 
 
Alternatives
Considered and Rejected
 
Option 1: Not to extend
1. 
The option not to extend was considered and rejected on the basis
that the Council has a duty of care to provide safe and secure
environments for its staff and visitors. 
 
Option 2: Retain Fully
Outsourced Service
2. 
The Council rejected the option to retain a fully outsourced
service as it has been able to identify efficiency opportunities
that may facilitate the implementation of a modernised insourced
model for parts of the current service. This is, however, subject
to further financial modelling and review is cognisant of the
Council’s worsened financial position.
3. 
In its obligation in delivering its Sustainability & Insourcing
Policy, the Council has opted to explore these opportunities
further rather than procuring all elements of the service at this
stage.  
 
Option 3: Insource these
security services
4. 
In addition to the operation risks and challenges posed to the
Council through the provision of an insourced service, the Council
rejected the option to insource these services under the current
security model due to the additional cost base related to an
insourced security service, such as on-costs, pension contributions
and additional working hours.
5. 
Insourcing the Concierge service specifically would result in an
increase from 26 to 39 officers to deliver the service on Council
employment terms & conditions, which translates to a
£384K annual cost increase. One particular reason is a
variance between the number of contracted working hours established
in Council employment terms as compared to external service
providers.
6. 
Moreover residents have autonomy in the decision for the future
scope and indeed continuation of the concierge service as they pay
the full cost. Cost analysis has identified that each tenant &
leaseholder would be subjected to at least a £449 annual
increase in costs to deliver the current levels of service under an
insourced model.
7. 
Given the current cost of living crisis it is not felt that
benefits from insourcing would be proportional to the increase in
costs to the residents and the HRA is not able to revert back to
its historic position of subsidising the service.
8. 
It is feasible that residents would invariably discontinue the
service in its entirety on a cost basis only, which carries safety
risk to the local community in these areas and therefore
reputational risk to the Council too.
9. 
Case studies of insourcing concierge services at other London local
authorities has shown additional oncosts have been required to deliver the service,
much in line with the Council’s own cost analysis, and that
service levels were significantly reduced in part in order to
offset some of the additional expenditure.
10.Resident consultation will shape
the levels of service for each of the thirteen residential blocks
based on lower contracted costs and Section 40 Consultation will
govern whether residents approve costs following and based on the
results of the tender exercise.