Cost of contracts awarded to Amey PLC

victoria steele (Ataliwyd y cyfrif) made this Rhyddid Gwybodaeth request to Birmingham City Council

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victoria steele (Ataliwyd y cyfrif)

Dear Birmingham City Council,

I write to request information under the Freedom of Information act.

I would like to know the total cost the to the council in respect of contracts awarded to AMEY PLC.

AMY PLC seem to have the monopoly with the council for construction and repair, however, when observing such works they seem to have many more operatives standing idle, whilst presumably being paid, creating higher costs and substandard work.

Yours faithfully,

Victoria Steele

Marion Beale, Birmingham City Council

 

 

Dear Ms Steele

 

                        Freedom of Information Act 2000 – Request for
Information

                        Ref FOI 9023

 

Thank you for your request which was received on 08/08/2013 for
information held by the Council under the provisions of the Freedom of
Information Act 2000.

 

In some circumstances a fee may be payable and if that is the case, we
will inform you and ask you whether you would like us to proceed with your
request.

 

If you require any further information please do not hesitate to contact a
member of our team on 0121 303 4303 or 0121 303 4404.

 

Yours sincerely

 

 

 

Data Protection / Freedom of Information

Performance and Support Services

Telephone:  0121 303 4303

Fax:  0121 303 4943

Data Protection Act 1998

The information you have provided within your Freedom of Information
request will be held on our database and may also be held within manual
records for a period of 2 years from the date Birmingham City Council
received your request. Any personal data that you provide to Birmingham
City Council will be held in line with the requirements set out within the
Data Protection Act 1998.

 

Re Use of Public Sector Information

Where Birmingham City Council is the copyright holder of any information
that may be released, re-use for personal, educational or non-commercial
purposes is permitted without further reference to the City Council. Where
the re-use is for other purposes, such as commercial re-use, the applicant
should notify the City Council in writing to seek approval or agree terms
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dangos adrannau a ddyfynnir

Val Llewellyn, Birmingham City Council

1 Atodiad

Dear Victoria Steele,

Please find attached the response to your request for information under
the Freedom of Information Act.

 

Val Llewellyn

Performance and Support Services

Local Services Directorate

 

 

 

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victoria steele (Ataliwyd y cyfrif)

Dear Val Llewellyn,

Thank you for providing the information I requested.

I find it staggering that nearly 84 million pounds have been paid to such an inefficient service provider.

I have yet to hear anyone say they are satisfied with the standard of work provided by AMEY.

When they laid a new pavement in my area there were more contractors sitting in vans in the car park doing nothing than there were working.

The work itself seemed beyond them. I had reason to question the delay in completion, only to be told they had used the wrong materials and it had to be done again!

Same when they laid block pavement in the local high street. All had to be redone.

I note from news reports covering the repairs of the Queensway tunnel, the aerial reports show again a dozen workmen standing idle. I have passed this site at the weekend, again, workmen sitting around doing nothing apart from clocking up more pay.

I would ask why is it cheaper to employ these inefficient contractors?. Presumably AMEY are making a profit? So surely it would make more sense for the Council to use a direct labour force?

Costs would not be increased, and presumably the council would not have to factor in a profit margin.

I would like to know who keeps renewing the AMEY contract and why.

I look forward to your response.

Yours Sincerely

Victoria Steele

Yours sincerely,

victoria steele

Val Llewellyn, Birmingham City Council

Dear Victoria Steele,
I referred your e mail to Highways who have informed me that they would handle this under normal business rather than through the FOIA so that they can respond to the comments that you have raised.

If you would like to provide any further details of the locations of the specific schemes which have given you cause for concern, I will forward these on to Highways to look into.

Val Llewellyn
Performance and Support Services
Local Services

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victoria steele (Ataliwyd y cyfrif)

Dear Val Llewellyn,

Thank you for your prompt reply.

I will raise these matter directly as per the information you have provided.

Yours sincerely,

victoria steele

Domenic De Bechi, Birmingham City Council

Dear Ms. Steele,

Thank you for your comments further to your request under the Freedom of
Information Act. I understand that your request has been met but I wanted
to ensure that you had a response to your further comments.

Firstly, I am concerned about the issues that you have raised regarding
Amey works that you have observed. This is something that the City Council
takes seriously and whilst this is a matter for Amey to manage, I would
like to make them aware of the details so that they can deal with the
matter appropriately and advise you what action is being taken.
Unfortunately, I didn’t receive any further details; to help in following
this up, could you please advise the following information if possible:

·         Details of the locations (streets, or if they are large streets,
the specific area they were working in); and

·         Dates and times that they were working there (if this was some
time ago, approximate details would still be helpful).

With regard to your general comments about how the services are provided,
Amey is the City Council’s partner in a 25-year partnership contract that
commenced in June 2010, expiring in June 2035. This is a large service
contract that includes not only the provision of maintenance and
management services on the highway but also a significant (c. £350m)
investment programme that will improve the city’s highway infrastructure
to a set standard between 2010 and 2015. This standard is then maintained
for the rest of the contract.

The contract is financed by a Private Finance Initiative (PFI) or Public
Private Partnership (PPP) arrangement, whereby Amey has borrowed the money
to carry out the investment. The payment from the City Council to Amey
therefore reflects not only the cost of carrying out the services under
the contract but also repayment of that borrowing. In return, Amey carries
the full risk of delivering the services under the contract and the City
Council’s payment to Amey does not change to reflect this risk. As I said
earlier, it is therefore a matter for Amey to manage this because there is
no cost implication to the City Council of inefficiency.

Prior to entering into the contract the City Council evaluated a range of
options, which included alternative ways of financing and delivering this
and options where the City Council retained the workforce and managed them
to deliver the improvements. The PFI / PPP mechanism was selected by the
City Council because it provided the best overall value to the City
Council in terms of the funding available and the transfer of risk of
delivering the services. Subsequently, once the City Council had made the
decision to pursue this arrangement there was a separate process of
procuring the contract and selecting the Service Provider.

I have summarised this process here, but if you would like further
information you can find a considerable amount of detail of the evaluation
and decision making of the City Council in relation to this process in the
decisions database on the City Council’s web page at
[1]www.birmingham.gov.uk/democracy/Pages/Index.aspx.

I hope this answers the questions that you have raised in an appropriate
level of detail. If you could advise further details on the Amey works
that you have observed, I will follow this matter up with them and ensure
you receive a response.

Yours sincerely,

 

Domenic de Bechi

Contract Manager

Highways, Street Services Division

Tel: 0121 675 0158

E-Mail: [2][email address]

 

 

 

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References

Visible links
1. http://www.birmingham.gov.uk/democracy/P...
2. mailto:[email address]

victoria steele (Ataliwyd y cyfrif)

Dear Domenic De Bechi,

Thank for your prompt response.

I would advise you that the works I am referring to were pavement resurfacing at Jockey road, Sutton Coldfield. The whole road was done but my area is B73 5XP.

The work was supposed to take approximately two weeks but dragged on for at least six if I remember correctly.
We residents were bumping up and down pavements in our cars, prompting me to make a complaint, as did other residents. I recall it took a long time to get a response but do recall talking to a contractor, not from Amey who told me the reason for the delay was that Amey had used the wrong materials and that the new pavement had to be removed and re done!

I would also point out that Amey removed all waste bins from the bus stops on Jockey road, discarding one in the Sutton Park Hotel car park and another behind business premises.

To date there are no waste bins on Jockey road, causing a big litter problem. I have now contacted the council regarding this matter and am informed that bins should be in place by 17 September. If Amey are doing this I will not be holding my breath.

The same thing happened in Boldmere road, just adjacent to Jockey road. Amey were tasked with block paving the Boldmere high street. Again the work dragged on for an inordinately long time, having to be redone in parts because of failures in the original laying of the new surface.

This caused considerable disruption for business's on Boldmere road and I'm sure complaints were registered.

Aside from the inconvenience, I find it a staggering waste of resources and money. I understand how PFI works and am aware that costs of the contract include large interest payments which are ultimately borne by council tax payers and limit the money available to the council to carry out much needed work throughout the city.

I am also amazed that not only ,if I understand correctly, Amey carry out work, they also sign off on it's standard?

Another area which I feel needs looking into is the question of flower beds maintained by Amey. At the Junction of Jockey, College road and Melrose Avenue I can only describe what I see as a farce. I do not know how often they attend the flowers on the Island but I have witnessed it twice. A group of six or more men, standing on the Island. chatting, whilst one carries out the planting, maintenance etc.

Perhaps they only have one vehicle available but yet again another blatant waste of time and resources.

This is a feature time and time again, all over the city. As happened with the resurfacing in my area, Amey seem to have twice as many operatives in attendance than ever appear to be engaged in any activity. I am not joking when I say when the Jockey road work was in progress, neighbours would watch to see how long the workmen would sit in their vehicles before a few would venture out to do any work.

In conclusion I really think the monopoly Amey have should be investigated to ensure the council are getting value for money. I have heard many people making the same complaint, which prompted my initial enquiry.

Thank you for your time. I look forward to receiving your comments.

Yours sincerely,

victoria steele

Domenic De Bechi, Birmingham City Council

Ms. Steele,

Thanks for the further details. I have contacted Amey and asked for an explanation to be provided of what has happened.

Some of the points you have raised apply to other contractors and I shall follow those up separately and combine them into one response for you. As there are a number of points that you have raised this may take a little time to get all the information together, but I shall send you details a.s.a.p.

Regards,

Domenic de Bechi
Contract Manager
Highways, Street Services Division
E-Mail: [email address]

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victoria steele (Ataliwyd y cyfrif)

Dear Domenic De Bechi,

Thank for for your swift response.

I understand you will have to investigate and look forward to to hearing from you when your investigation is complete.

For information, no action has been taken regarding the waste bins and I am now wondering if, as they were originally in place, a charge was made to the council for their replacement ?

Yours sincerely,

victoria steele

Domenic De Bechi, Birmingham City Council

Ms. Steele,

 

Following your e-mail I have obtained details from our Service Provider
Amey and other colleagues in the City Council regarding the issues that
you have raised. Sorry for the length of the response and the time taken
to provide this but I wanted to provide a comprehensive response to the
issues that you have raised.

 

Jockey Road

 

This was a footway resurfacing scheme and the works were carried out from
20^th August 2012 to 26^th October 2012, a total of ten weeks. I
understand that prior to starting, the works were advised by letter posted
to residents as being for a duration of ten weeks. This is a standard
practice that we expect from Amey. Whilst I understand that it will have
been inconvenient while the works were carried out, such maintenance works
are necessary from time to time and the overall timescale for carrying out
works was met.

 

As you said, there was a quality issue with the surface course material
which resulted in approximately 300m^2 of the works (approximately 6% of
the site by area) having to be re-excavated and replaced with a new
surface course. This was identified by the Amey Supervisor and was
rectified at the contractor’s own expense. Whilst we do expect work to be
carried out effectively first time, on occasion this unfortunately does
not happen. However, I hope this re-assures you regarding any potential
additional cost to the City Council.

 

In relation to your complaint regarding the litter bins, I understand that
these have now been replaced. There is no additional charge to the Council
for their replacement.

 

Boldmere Road

 

In the case of the footway resurfacing at Boldmere Road, this surfacing
work did take longer than was originally envisaged. As you are aware,
Boldmere Road is a busy road and the works were staged in small sections
to reduce the impact on pedestrians. This meant that the works took longer
than envisaged. I am advised that there were no issues with the quality of
these works beyond what are considered ‘minor snagging’ items that a
contractor would be expected to put right.

 

Flower Beds, Jockey Road / College Road / Melrose Avenue

 

Whilst this is a service on the highway the maintenance of these flower
beds is not carried out by Amey. I have spoken with my colleague Darren
Share who has discussed the matter with the relevant contractor - I have
copied Darren into this response and he will come back to you directly on
this.

 

Other Points

 

You raised two further points that relate to the principles of financing
PFI contracts in general and how completed works are approved.

 

The PFI contract does require that Amey has borrowed money to finance the
investment it has undertaken to bring the highway network up to standard.
As with any borrowing, this is paid back with interest by Amey.

The Council pays for all the services under the contract via a single
unitary payment, which includes paying the costs of the borrowing and the
transfer of risk in delivering those services to Amey.

 

In entering into the contract with Amey, the Council undertook to maintain
its spending on the services in the contract and additionally receives a
grant from the Government. Broadly speaking, the grant, together with the
ring-fenced council resources, covers the total cost of the contract. It
is not the case that these are a pressure on Council Tax in the city.

 

As you would expect from any contractor, the Council requires that Amey in
the first instance satisfies itself that its works on site meet the
necessary standards. In the case of investment works such as those under
the PFI contract, Amey’s own processes require that it carries out such
checks before confirming that it believes the works comply with its
requirements. Completed works are also subject to further checks on a
sample basis by both an Independent Certifier and by the City Council’s
client team. Where issues are identified, these are expected to be
rectified as soon as possible and should not be included towards achieving
contract requirements.

 

Once again, I apologise for the delay in responding on this. I hope this
response has covered the points that you have raised sufficiently and
addressed some of your concerns with how these issues are managed. If
there are any further questions, please do let me know.

 

Regards,

 

Domenic de Bechi

Contract Manager

Highways, Street Services Division

E-Mail: [email address]

 

 

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victoria steele (Ataliwyd y cyfrif)

Dear Domenic De Bechi,

Thank you for your response.

I appreciate your comments regarding financing of PFI contracts but fail to understand how this type of funding does not put pressure on council tax funds.

Surely if the council carried out the works directly, it would nor have the additional burden of including a profit element into the calculation.

That said I also understand that the council has to adhere to conditions set out by central government and accept your explanation. I may raise this issue directly with the council in a different manner.

With regard to the works on Jockey road, residents were told works would take approximately 2 weeks. Whether this was for specific areas, I am not sure but I know the prolonged works did prompt complaints from residents. I am sure we would not complain if works were carried out in accord with the given time frame.

I fail to see how AMEY could get basic resurfacing wrong. Surely that is basic work for them and if memory serves me correctly, it was not AMEY that alerted to the problem but another contractor.

With regard to the waste bins, yes, following my request they were replaced but I would like to know if they were charged for? If they were then surely this is a matter to be investigated. If they have been sited without further charge this implies to me that they were already costed but not provided?

I would like to point out that as of today I have not received any information regarding the flower displays.

I look forward to your response

Yours sincerely,

victoria steele

victoria steele (Ataliwyd y cyfrif)

Dear Domenic De Bechi,
I have been prompted to contact you by the website.

I did this yesterday. Please accept my apologies for this email.

Yours sincerely,

victoria steele

Domenic De Bechi, Birmingham City Council

1 Atodiad

Ms. Steele,

 

Thanks for your note. To address your additional points in order:

 

1.       The arrangement under the PFI contract does not put additional
pressure on Council resources because the price that the Council pays is
not varied for factors such as this. In short, Amey has taken all the risk
of delivering the services in the contract to the price tendered.

2.       Part of the requirement in obtaining funding from HM Treasury was
to demonstrate that the costs provided better value for money than
carrying the services out directly. The Council did this in order to
qualify for its PFI Credit.

In looking at the overall cost position, you need to factor into the
equation that if the Council carried out the works directly, whilst it
would not pay profit, it would need to take all the risk of prices (e.g.
materials, plant and labour) to carry out the works, together with the
risk of performing the works as required. This is assuming it did not
sub-contract the works to an external supplier (as it did prior to the
contract being let).

3.       Regarding the works on Jockey Road, the information I have been
provided from Amey indicates that residents were told this would take ten
weeks. Works commenced on 20th August 2012 and was completed by 26th
October 2012. I have attached a copy of the letter that I have been
advised they provided (please note that the date at the top of this
changes to today's date, but I am advised this is the letter that was
sent).

4.       I understand your frustration that the works were not done right
first time. In relation to who did the work, Amey manages a number of
suppliers to deliver the works via sub-contracts.

5.       Regarding the litter bins, as I said in my response, there is no
additional charge for replacing them. The cost of removing and replacing
any apparatus that is necessary to carry out the services is included
within Amey's tendered price.

6.       I have followed up with Darren today and I would hope that he
will come back to you soon regarding the flower beds.

 

I do hope this answers your questions. Can I suggest that if you have
further questions regarding payment for services under the contract it may
be more helpful for me to discuss these with you in person? That way if
you have follow-up questions then I could respond to them at the time. If
you wish to do this, please let me know and I can set up a meeting. If it
helps, I can also arrange for Amey's Account Director to be present to
discuss any other issues that you may have.

 

Thanks,

 

Domenic de Bechi

Contract Manager

Highways, Street Services Division                

E-Mail: [email address]

 

 

 

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victoria steele (Ataliwyd y cyfrif)

Dear Domenic De Bechi,

Thank you for your further response.
I appreciate your offer of a meeting with yourself and Amey's finance director but respectfully decline as I can see no resolution of my complaint coming from it.

I understand that the council are somewhat tied by government legislation in relation to raising finance but fail to understand why companies like Amey seem to be a virtual cartel when it comes to providing public works.

As a tax and council tax payer I fail to see the benefit of such funding. The council was always, despite some criticism, efficient in providing services to the city from an in house arrangement.

I note that you say no further cost was incurred by providing bins however I do not have an answer to whether they were costed into the original contract? I am presuming they were given that no further costs have been incurred.

My point is, if the council paid for this work but it was not undertaken, it illustrates that the self monitoring by Amey is not working and begs the question, what other services have been billed yet not provided?

My area would still not have bins if I hadn't taken it upon myself to request them.

Thank you for the information provided. I would be interested to hear if you have any further comments.

Yours sincerely,

victoria steele

Domenic De Bechi, Birmingham City Council

Ms. Steele,

I understand your comments and in respect of whether I have any further comment, I think I have answered all your questions below.

I shall raise the issue with Amey regarding the reinstatement of street furniture after their works. This is entirely within their overall charge for the services and not charged for as an extra. There is no reason why they should have missed this other than an error; whilst this will happen occasionally my concern is that there is a process to reduce the chance of this happening again.

The financing arrangements relating to the contract with Amey are not the same as traditional contracts. They are considerably more complex and involve very different premises and concepts, which often leads to misunderstanding of the position. As I said previously, if you do wish to discuss this in more detail, I am more than happy to do this.

Regards,

Domenic de Bechi
PFI Contract Manager
Highways, Street Services Division
E-mail: [email address]

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victoria steele (Ataliwyd y cyfrif)

Dear Domenic De Bechi,

Thank you for response. I apologise for not replying earlier.

I do hope some mechanism is put in place to ensure over charging does not occur. This concerns me as I understand Hertfordshire council uncovered nearly £300,000 billed by a company called Amey Lafarge for work not done. I do not know if there is a connection between the two companies, however, in the light of G4S also billing for work not done, I do think more should be done to protect public money from these predatory behemoths.

Just to let you know, I have not yet received a response regarding the flower bed.

I would like to take this opportunity to thank you very much for the information and assistance you have given me. I continue to have faith in the council and understand it has to work within tight government restraints.

Thank you again.

Yours sincerely,

victoria steele