Future of the MPS central records repository

Report: 10
Date: 24 October 2002
By: Commissioner

Summary

This report outlines on the current position with the replacement of the Hayes repository and contains costed options and a recommendation for the future storage of MPS records.

A. Recommendation

That

1. members note the contents of this report which takes account of the recommendations of the recently concluded Best Value Review of records management
   [1];
2. the Committee be asked to consider the options available for the future storage of MPS hard copy records (principally paper based files); and
3. members approve option 2 to convert the former driving school workshop at Peel Centre into an in-house repository (to be staffed by 13 MPA personnel) and use this to store the most frequently used records and place its remaining low use records with the PFI contractor who will be taking over the Hayes repository.

B. Supporting information

Summary

1. The MPS stores approximately 20,000 linear metres of files and similar records at the Hayes repository and employs 17 staff to manage them. The repository is owned by the Ministry of Defence (MoD) which has decided to dispose of the site and replace it with a PFI contract for 25 years to build and operate a repository. It has invited all current Hayes users to become parties to the PFI. The MoD is planning to hand over the current site to the incoming contractor during the second quarter of 2003 and requires a firm decision on participation by 30 October 2002, failing which non-participants will be issued with six months notice to vacate Hayes.

2. The MPS has set up a project board under the direction of Directorate of Information Group Director Service Delivery to coordinate a response and identify the most appropriate means of storing records in the future. This issue is being dealt with in the wake of a best value review of records management which anticipates, as yet unquantified, changes to storage requirements at both the repository and on boroughs and headquarters branches. The review's recommendations were agreed the Finance, Planning and Best Value Committee at its meeting on 29 May 2002.

3. The PFI process has reached the stage where the two remaining bidders have submitted best and final offers. An affordable proposal has been developed which involves placing the most frequently used records in existing MPA accommodation at Peel Centre which will be operated by MPA personnel. Less frequently used records will be deposited with the PFI contractor.

4. The MPA Finance Committee is requested to approve option 2 which provides a repository service to the required standard at the lowest cost available and is fully funded within existing budget provision. It also provides sufficient flexibility to support the recommendations of the best value review of records management. In doing so the Committee is asked to approve the contract action necessary to enable the associated building work at Peel Centre to be implemented and the award of contract(s) within the costs shown in the report. This course of action is necessary due to constraints impacting upon the time available to implement a solution.

Background

5 The MPS currently stores approximately 20,000 linear meters of files and similar records at the Hayes Repository. This is a facility owned by the Ministry of Defence (MoD) for which the MPA pays approximately £100k annually for the use of storage facilities and a small amount of office space. The MPS occupies approximately 6% of the storage capacity at Hayes. A benefit of using a joint facility allows the MPA to pay only for space actually used. This has increased by approximately 10% in the last four years. The accommodation charge levied by the MoD is considerably below a true market rent. Consequently future costs can be expected to be higher than at present.

6. A staff of 17 MPA personnel is employed at the Hayes site to handle MPS records moving in and out and to destroy records no longer required. At present this is made up of nine permanent employees and eight temporary staff provided by an agency. The MPS transport services provides a daily courier service to move records between Hayes and central London.

7. The MoD has decided to rationalise its property holdings and realise the value of the Hayes site which is poorly utilised, expensive to maintain and partly derelict. It intends to replace the current repository with a PFI contract likely to be serviced from a different location. The proposed contract (25 years) will require the contractor to take over the existing site and services, rehouse the repository into more suitable building(s) within a prescribed period and provide a repository service. This will include a collection and delivery service to customer premises. The contractor will purchase the Hayes site from the MoD.

8. All Hayes users were invited to join the proposed PFI and the MPS together with the other users (approximately 13 other government departments and agencies) have participated in developing the service specification against which the two consortia have submitted bids. Users of the Hayes repository who do not join the PFI will be required to vacate the accommodation by the time the contractor takes over. Hence there is no do nothing option.

9. The MoD timetable anticipates that an announcement of the preferred bidder will take place in late autumn 2002 with handover of the site and services to the contractor taking during the second quarter of 2003.

10. This change provides an opportunity to facilitate some of the recommendations from the best value review (paragraphs 11-15).

Best Value Review of Records Management (RMBVR)

11. This review commenced in November 2001 and concluded with a report and recommendations for improvements to the MPA Finance, Planning and Best Value Committee on 29 May 2002. Liaison between both projects has been maintained throughout.

12. Recommendations from the RMBVR relevant to the storage of paper-based records have emerged in the areas of retention periods and the inadequacies of local record storage facilities on some boroughs. The RMBVR anticipates introducing shorter retention periods with a consequent reduction in storage at the central repository.

13. The review also found that a large quality of accommodation on boroughs (some 5,000 square metres) is given over to records storage. Some of the accommodation is unsuitable for this purpose (eg attics, basements, former cells) and consequently much is disorganised and poorly managed. It has formed the view that effective records management can only be achieved on boroughs if, amongst other things, alternative storage facilities are obtained, for example through the use the central repository or an external provider.

14. The review also found that on boroughs 62% of records storage is in office accommodation originally identified for alternative use. The MPA estate is already under pressure and is expected to come under greater accommodation requirements from increases to police manpower (lockers etc), including community safety wardens. In turn, more activity from greater manpower is expected to increase records storage requirements. There is an opportunity to alleviate some of these pressures through the relocation of records normally retained on boroughs to the central repository.

15. At this stage it is not clear what the net effect of the RMBVR will be on overall storage requirements for the central repository. Nevertheless the solution for MPS records stored at Hayes needs to recognise the potential to reduce pressure on other police accommodation through the relocation of records from boroughs.

Current position

16. Since the inception of the PFI project in 1997, it has moved through long list, short list and Best and Final Offer (BAFO) stages. The two consortia that remain in the bidding have recently submitted revised prices to take account of changes to the user base. The MoD has evaluated both bids and has provided Hayes users with the tariff of charges that represents the best offer.

17. The tariff of this 'nominated preferred bidder' has been evaluated by Records Management Branch (RMB) against the current and anticipated usage by the MPS of the Hayes Repository as far as can be gauged at this stage. This work is being overseen by a project board chaired by the Director of Service Delivery, Directorate of Information. The outcome of the evaluation is reported at paragraph 42.

18. The MoD is seeking by 30 October 2002, a commitment from Hayes users to join the project on the basis that they would withdraw only if negotiations at preferred bidder stage produce an adverse circumstance that could not have been foreseen earlier. A number have already made such a commitment based on bids submitted in November 2001. The commitment being sought will require an acknowledgment of the affordability of the tariff and approval to enter into a contract subject to a satisfactory outcome in the final negotiations. This is necessary so that the MoD and remaining Hayes users can move into the final negotiations with the preferred bidder with a degree of certainty of the scale of business involved. The withdrawal of any party at that stage may necessitate renegotiation of the terms and, in the worst case, a lengthy and costly rebidding exercise.

19. Users that cannot provide this level of commitment will be given six months notice to leave Hayes in accordance with their occupancy terms.

20. To date, two authorities have declined to remain with the project and are arranging to remove their records. The MoD has made it clear that notice to quit will be issued to any Hayes user that have not committed to the project by the end of October 2002. Furthermore it will seek to recover any costs that arise from delays to the project caused by any Hayes users that do not comply with a notification to leave the site. The MoD is unable to elaborate further on what these might be or how they will be calculated.

Budget

21. A budget to meet the cost of future storage of MPS records has been assembled as follows:

• current expenditure on the provision of storage at Hayes (principally staff and accommodation costs). For 2002/03 this is £395k.
• an increase to the current baseline of £100k from 2002/03 which was built into the medium term financial plan in anticipation of increased costs (paragraph 5).

22. This produces a baseline for revenue expenditure of £495k. Additionally:

• A provision of £600k has been made in the balance sheet as at 31 March 2002. This provision was made in the light of emerging information that the summation of the two items above would be insufficient to met the cost of the future storage of MPS records.

23. At the Finance Committee meeting on 27 September 2002, it was agreed that a sum of £570k be incorporated within the medium term land and buildings capital programme for the construction of a facility for MPS records should the MPS not join the PFI.

The PFI option

24. The following are the main issues associated with the PFI option.

• Services will be paid for on the basis of use. There will be separate charges for storage, indexing records, deposits and withdrawals, transfer of records to the Public Record Office and transport of records to/from customer premises. A high security storage area will be available at additional cost. Customers are not required to use all services.
• Customers have the option of guaranteeing storage usage at a saving of ... over the cost of non-guaranteed storage. Guaranteed storage will be charged for regardless of use. Non-guaranteed storage will be charged only for the period that it is used. Guarantees need not be the same for the duration of the contract but must be fixed at the outset.
• Higher charges may occur during the early part of the contract while the contractor arranges new accommodation
• The MoD has agreed (subject to approval of its full business case) to meet the cost of relocating the records of all the Hayes users to the new repository - regardless of location.
• All parties involved (including the MPS trade union side) have agreed that TUPE will apply to the contract. Therefore MPA staff in post at the time of the handover will be expected to transfer to the contractor's employment. If this happens there will be an exposure to a pension transfer to the new employer's scheme but the staff numbers involved are not great and will not impact adversely on the pension budget.
• The MPA will be required to meet the cost of any redundancies that occur to former MPA personnel that arise as a result of the repository relocating after the contractor has taken over. This is a term the MoD is proposing to insert in contract so as to give the bidding consortia greater certainty over their costs. A factor influencing the MoD's decision when identifying the 'nominated preferred bidder' is the opportunities the bidder has available to employ repository staff in the Hayes locality with one of the consortium's members.
• Accountability for records that the contractor can be held responsible for will depend upon the detail and reliability of information available about the records passed to the contractor at handover. There is no inventory of MPS records at Hayes and while details of records in some collections are held elsewhere there has been no recent reconciliation of what is at Hayes. Without indexing the records it will not be possible to hold the contractor responsible for individual records if they cannot be found. In any event, it will not be possible for either the MPS or the contractor to draw up an index of MPS records in the repository before handover but the contractor will offer a chargeable indexing service after handover. This means that initially (up to 2 years) MPS records will not be indexed and it will be very difficult to hold the contractor accountable for those that cannot be produced.
• The tariff under evaluation does not include provision for consequential loss should the contractor be found to be responsible for the loss or misappropriation of a record in its custody. Indemnities of this nature may become available within the contact terms at preferred bidder stage at an additional cost.

25. The MPS will need to devote resources to managing the contract (verifying invoices, performance monitoring, authorising additional services etc).

The PFI bid

26. The evaluation of the tariff provided by the MoD included a review of the contractor's services that might be used by the MPS. Discussions were held with the MoD and their advisers with the objective of identifying opportunities to reduce the cost of the PFI to the MPA. This resulted in the following changes to the MPS requirement.

• It is not intended that the high security storage will be used. While this is desirable it is not currently available at Hayes and will only be provided by the contractor at additional cost. The MPS has limited high security storage elsewhere.
• The contractor's delivery and collection service will not be used because ceasing to use MPS transport will not realise any savings nor will it make any additional funding available to defray the contractors costs. Consequently it is intended that MPS transport services will continue to move records to/from the repository, subject to confirmation of the final location and a review of the final PFI tariff compared with MPS costs.
• The contractor's tariff to destroy records selected by the RMB review staff is considerably more expensive that the cost of this being done by the review staff, as is presently the case. Consequently it is intended that this activity will remain in-house.

27. These changes have been incorporated into the costing at paragraph 42.

Guaranteed levels of storage

28. The terms of the PFI contract provide for a reduced storage tariff for space that customers guarantee to pay for regardless of their need to use.

29. This has been considered by the project board in conjunction with the RMBVR team which believe that significant reductions in paper records will not occur before 2010. It is proposed that if the PFI is selected the MPS will commence the contract guaranteeing 75% of current usage with downward steps thereafter to reflect reduced confidence in the need to continue with present levels of paper record storage.

30. The starting point of 75% is considered appropriate even if proposals by the RMBVR project described above to reduce storage through shorter retention periods are achieved to the fullest possible extent and the space released is not taken up by records transferred from boroughs.

31. The intended scale of guarantee is:

• Years 1-5 = 75% of current usage (20,000 metres)
• Years 6-10 = 50%
• Years 11-15 = 25%
• Years 16+ = 10%

Indexation of records

32. Any third party taking custody of records for storage can only be made accountable and responsible for records that can be confirmed as passing into its possession. With the PFI it is intended that the contractor will hold an index of records in its possession and update it to reflect every movement in and out of the repository. For records handed over in bulk at the time of the handover, an index will need to be drawn up. The detail held in the index is for each customer to decide. A cost of £350k has been estimated by the MoD to create a simple index of MPS records at the repository.

33. It will not be possible for either the MPS or the contractor to draw up an index of MPS records before handover. This means that initially (up to 2 years) MPS records will not be indexed and there will be minimal accountability on the part of the contractor during this period for records that cannot be found.

34. Consequently there is an additional cost of approximately £350k to get to the position in approximately the third year of the contract where the contractor can be held responsible for records in its custody. In practice, the indexing is likely to be achieved through the noting of records being moved during the first two years of the contract (at an additional cost of £75k pa) with the remainder being indexed during the third year at a cost of £200k.

35. Any storage regime that includes an indexing system will require an additional administrative overhead to revise the index each time a record moves in or out of the repository. The contractor's costs for this activity is reflected in its charges.

Comparison of costs

36. The anticipated costs of joining the PFI (details at paragraph 42) have been compared with the costs of providing a comparable service from within the MPS. The comparison is based on the MPA taking additional premises, relocating the records from Hayes and staffing the repository with MPA personnel. Both lease and purchase options were costed. Prices were based on locations outside London in areas that the PFI bidders are considering as alternative locations for the repository.

37. As shown in table 1t the PFI offered considerably lower costs throughout the duration of the contract period than any comparable MPS repository using either purchased or rented accommodation. The anticipated costs over 25 years are:

Table 1. Accommodation costs

38. The use of an alternative contractor to provide a repository facility for MPS records stored at Hayes has not been pursued for two reasons. Firstly it is believed that no external provider will be able to compete with the PFI given the economy of scale associated with the project. Secondly, soliciting an alternative private sector supplier for the MPS would be incompatible with continued participation in the MoD project, particularly as some of the potential suppliers of the service are, or have been, bidders for the PFI contract.

Implications of joining the PFI

39. The cost of the MPS joining the PFI has been calculated by assessing the tariff of proposed charges against the current and anticipated usage by the MPS of the Hayes Repository. An assessment has also been made of the non-financial implications which is included in Appendix 1.

40. The financial analysis assumes that the PFI will start at the beginning of 2003/04. The cost of indexing records is excluded on the basis that this is an optional cost based upon the degree of accountability required of the contractor (paragraphs 32-36).

41. Redundancy costs (para 24, 6th bullet point) have been assumed as occurring when the repository is relocated. This is expected to commence at the end of the second year (March 2005) and continue for seven years. While these costs are by no means certain to occur, exposure to them has been factored into the analysis.

42. The cost of joining the PFI over 25 years at present values is £14.7m. shows the highest costs are in the first two years where accommodation charges are at their highest while the contractor builds a new repository (para 24, 3rd bullet point refers). It also shows that for every year costs are forecast to be above the budget baseline. For the first two years this can be offset by the balance sheet provision of £600k (paragraph 22) but from the third year additional revenue provision of £70k-£80k will be required.

43. The implications of reducing activity levels to fit expenditure within the baseline budget are described at paragraphs 55-59.

An alternative option

44. The project board has considered opportunities to provide the MPS with satisfactory repository facilities. There is potential to achieve financial savings by setting up an in-house repository run in a similar fashion to the existing MPS facility at Hayes, including staffing with MPA personnel. An in-house facility would remove the concerns about the accountability for records being held by a third party and eliminate the need to pay additional sums for indexing records (paragraph 32).

45. Subject to the costs of accommodation not exceeding the current charge payable to the MoD, such a proposal would represent a cost no higher than current expenditure. However there would be a one-off cost for fitting out the accommodation and relocating the records.

46. In paragraph 37 it has already been shown that to provide a repository service in new accommodation (purchased or leased) is more expensive that joining the PFI. Consequently the only viable alternative proposal would involve using existing MPA freehold accommodation that is not suitable for disposal. In other words a place where the accommodation costs are already dealt with.

47. PSD has identified the former driving school workshop at Peel Centre as the only accommodation in the MPA estate that meets this criteria. It was also being sought for secure parking for driving school vehicles but an alternative for this has been found elsewhere on the estate subject to expenditure of approximately £60k for building work (which is included in the costs of implementing this option). The area at Peel Centre is sufficient to provide approximately 10,000-11,000 metres of storage and could be used for just over 50% of the material currently at Hayes.

48. A scheme has been worked up that demonstrates how the use of this accommodation can be incorporated into a repository facility that can be delivered at a lower cost than participation of the PFI. The key elements are:

• An in-house repository comprising 10,000-11,000 metres of storage using the accommodation available at Peel Centre for frequently used records, employing 13 MPA staff.
• The remaining less frequently used records (± growth/contraction) will be stored with the PFI contractor.
• It is estimated that approximately 80% of record movement will take place at the Peel Centre store thus reducing considerably the activity charges levied by the PFI contractor.

49. The cost of this solution over 25 years at present values is £12.3m excluding the continuing expenditure already being incurred in providing and maintaining the vacant accommodation at Peel Centre. A summary of the year-by-year costs shows that apart from the first two years, forecast expenditure in every year is below the baseline budget. In the first two years the total above the baseline is £203k. Additionally one-off set up costs of £840k for the repository at Peel Centre would be incurred. Proposal for funding these costs are at paragraph 53.

50. In this option exposure to redundancy costs has been calculated on the same basis as for joining the PFI because it is unlikely that many of the MPA staff at Hayes will transfer to Peel Centre. However a cost has also been factored into the analysis to provide staff with transport to Peel Centre for the first two years so as to be able to retain their experience initially. There is not expected to be any additional costs arising from recruitment or training activities for any new staff recruited to work at Peel Centre.

51. The use of Peel Centre produces an attractive outcome in so far as it enables the MPS to implement a solution to the closure of Hayes while enabling the organisation to remain a member of the PFI customer group and thus take advantage of its very competitive terms and the flexibility to use more/less storage at these rates should this be required in the future. This fits well with the longer term changes to storage requirements that may arise from the RMBVR. An assessment of the non-financial implications is included in Appendix 1.

52. Table 2 overleaf outlines the cost of setting up a repository at Peel Centre:

Table 2. Costs of establishing a repository at the Peel Centre

53. For this option, it is proposed that funding should be arranged as follows:

Table 3. Funding options

54. This proposal takes up £473k of the balance sheet provision of £600k. The remainder can therefore be given up or used to pay for the indexing of that remain with the PFI contractor. A clearer view of the need to index will be available once work has been done to in identifying the records that will be passed to the PFI contractor.

The penalties of joining the PFI with the current baseline budget

55. To reduce the PFI contractor's charges to no more than what is available in the baseline budget will require savings amounting to £70k- £80k per year (paragraph 42). Part of this (say £10k) is likely to be achieved in any event from the review of material stored at Hayes currently underway as part of the RMBVR although some of this saving may be offset from the receipt of high risk records currently held on boroughs.

56. Other savings can only be achieved through restricting activity levels and artificially depressing the number of deposits and retrievals. The savings required would reduce by approximately 25% movements of records between the repository and boroughs/HQ branches. In practice withdrawals would remain unaffected but limits would have to be placed on records being returned.

57. The implications of doing this are potentially severe. Large quantities of additional records would be stored locally and inevitably fall into poor order very soon. Records withdrawn from the repository that could not be accepted back may become misplaced or lost. Information would become more difficult to find and some formal records would cease to be created.

58. The RMBVR believes this will inevitably and quickly have adverse consequences for operational efficiency and bring about failures to comply with legal obligations to disclose information.

59. Additionally the RMBVR has found that urgent action is needed to make substantial improvements in the quality of records management throughout the organisation and in particular to bring about a cultural change to one where information and records are regarded as a valuable asset. The implementation of those changes described above would serve to make a poor situation even worse and send completely the wrong message to the workforce. Furthermore the retention of such a large quantity of increased numbers of records in boroughs and headquarters offices will place additional pressure on accommodation throughout the estate.

Summary of options

60. The options are:

Option 1

• Join the PFI based on current levels of storage and activity (but moderated on the basis of paragraph 26). The PFI contractor will take over existing service at Hayes and relocate to new accommodation. Payments will be made according to services used. MPS transport will continue to provide the collection and delivery service. MPA staff will transfer under TUPE to contractor.
• The cost of this option is £14.7m and is not affordable after the first two years without an increase in the baseline budget of £70k-£80k pa or a substantial reduction in service levels.

Option 2

• Set up an in-house repository comprising 10-11,000 metres of storage using the accommodation available at Peel Centre for frequently used records (80% of movements) employing 13 MPA staff. The remaining records (± growth/contraction) will be stored with the PFI contractor.
• Including the set up costs for the Peel Centre repository (£840k), the cost of this option is £12.2m. Proposals for the funding of the set up costs are at paragraph 53. This option is affordable within existing budget provision.

Recommendation

61. In addition to the financial considerations, the project board has reviewed the options from an operational aspect and strongly favours the implementation of option 2. This will preserve current service levels within the budget available and is regarded as the most pragmatic approach to dealing with the uncertainly about future records storage by using the PFI contractor to absorb fluctuations. It will also reduce the concerns about the accountability of records being held by a third party and the need to pay additional sums for indexing records (paragraphs 32-36).

62. The RMBVR has identified a need to increase the proportion of records stored in a central repository with attendant benefits for accommodation throughout the MPA estate. Whilst the timings and qualities are not yet known the RMBVR identified the following relevant information.

63. Storage on boroughs is currently taking up 5,500 square metres of accommodation which has an annual cost of £1.17m. Of this 62% is in office accommodation originally identified for alternative use.

64. The review estimates that compensation relating to failures in record retrieval is running at an estimated £1.5m annually. The preservation of dispersed and unsuitable storage in the MPA estate hinders efforts to reduce this compensation through improved retrieval.

65. The management of paper records in local archives is estimated to represent an annual staff cost of £736,000 (opportunity costs).

66. The nature of paper record storage outside the central repository imposes costs and risks associated with the legislative requirement to maintain and promote health and safety at work. Whilst there is currently limited information of staff injuries associated with records archiving, it is clear that staff are regularly putting themselves and the MPS at risk.

67. Option 2 reduces the dependency on indexing records both in terms of a lower volumes of records stored outside the MPS and lower risk arising through placing only low use records with the contractor.

Implementation of preferred option

68. Whatever solution is selected for the future storage of MPS records, there are some critical timing issues to deal with. In the event that the MPA does not commit in some way to the PFI by the end of October 2002, it is most unlikely that a satisfactory alternative arrangement for storage and access could implemented by the end of notice period. The MPS may then be faced with the prospect of negotiating an arrangement with the incoming contractor for extended use of the Hayes facilities. This will be done from a position of some disadvantage and the outcome is unlikely to be to the liking of the MPS.

69. In the event that option 2 is selected, the MoD will not issue notice to quit because the MPA will be committing to the PFI, albeit at a lower level than the current use of Hayes. However the time available to set up an in-house repository and remove the relevant records before the contractor takes over (expected in the second quarter of 2003) will be very challenging.

70. In order to maximise the opportunity for a timely removal of records from Hayes, acceptance of option 2 should also be regarded as giving approval for contract action to commence for the necessary work and award of a contract up to the estimated cost without further recourse to the MPA for approval.

C. Equality and diversity implications

1. The implementation of the recommendation at A will result in the jobs of the MPA staff currently employed at Hayes transferring either to Peel Centre of to the PFI contractor under the TUPE regulations. Of the nine MPA staff employed at Hayes the majority (seven) are women and traditionally the majority of staff employed in this type of work are female. To avoid unintentional discrimination, the personnel implications are receiving a high degree of attention. The MPS project board has HR and trade union side representation. Additionally there is also a MoD led personnel forum covering personnel issues for all staff affected by the PFI project at which the MPS is fully participating member.

2. The recruitment of new staff at Peel Centre will ensure as far as possible that the workforce represents the diversity of the local population. This will be pursued through the use of local Employment Services offices. Part-time and full-time positions will be available. 

D. Financial implications

To place all repository activities within the scope of the PFI will cost £14.7m over 25 years but it is not affordable within current budgetary provision. The recommended option at A above will cost £12.2m over 25 years and is covered by the existing budget and medium financial plan throughout its life. This includes a one-off cost of £840k to set up a repository at Peel Centre.

E. Background papers

Progress papers were submitted to the FPBV Committee meetings held on 6 December 2001 and 21 February 2002.

F. Contact details

Report author: Ailsa Beaton, Director of Information, MPS.

For more information contact:

MPA general: 020 7202 0202
Media enquiries: 020 7202 0217/18

Appendix 1: Options - analysis of advantages and disadvantages

Option 1

Join the PFI on the basis of existing storage and activity levels.

Involves

The PFI contractor takes over existing service at Hayes and relocates to a purpose built repository after 2 years. Payments will be made according to services used. MPS transport continues to provide collection and delivery service. MPA staff transfer under TUPE to contractor.

Advantages

• Contractor takes the risk of changes in levels of storage and activity.
• Contractor takes the risk of all accommodation related issues (eg health & safety, security, maintenance).
• Contractor takes the risk of all personnel related issues (except redundancy costs).
• Contractor takes risk of late completion of new repository building.· Certainty to MPS over costs of specified services.· Costs reduced through penalty payments if contractor fails to meets performance targets.

Disadvantages

• Anticipated cost of the service in excess of budget after first two years.
• MPS to be required to meet cost for any former MPA staff made redundant by the contractor in the (likely) event relocation of repository.
• Accountability by the contractor for lost records will only be achieved by the MPS paying £350k for indexing the records and then only after 2-3 years of the contract.
• No compensation for consequential loses.
• Changes to service provision will require variation to contract (time & cost).
• Risk of paying for storage not used if guaranteed levels of storage are taken up.
• Contractor's staff may have loyalties divided between MPS, other customers (over whom the MPS has no say) and their employer.
• Risk of skill loss to MPS.

Option 2

In-house repository for frequently used records with the PFI contractor providing storage for less frequently used records.

Involves

Set up an in-house repository comprising 10-11,000 metres of storage using the accommodation available at Peel Centre for frequently used records employing 13 MPA staff. The remaining records (± growth/contraction) will be stored with the PFI contractor.

Advantages

• Cost is less than option 1 and less than the budget available.
• Improves utilisation of accommodation at Peel Centre.
• MPS in full control of repository and has full control over high use/ high-risk records.
• Places the risk for fluctuations in levels of records storage with the contractor.
• Reduces the dependency on indexing records because fewer and less frequently accessed records are with the contractor.
• Protects against fluctuating storage requirements.
• Provides access to highly competitive storage rates for records that may be decanted from boroughs.

Disadvantages

• Risk for recruiting and retaining staff to work at Peel Centre. HR advises that no undue difficulties are expected in recruiting and retaining staff at Peel Centre.· Set up costs of £840k.
• Management overhead to organise relocation and additional staff required to provide service from two locations during relocation and thereafter until PFI contractor takes over.

For records held by the PFI contractor

• Accountability by the contractor for lost records will only be achieved by the MPA paying £175k for indexing the records and then only after 2-3 years of the contract. (50% of option 1 cost as only 50% of records will be deposited with the contractor).
• Risk of paying for storage not used if guaranteed levels of storage are not needed.
• Contractor's staff will have loyalties divided between MPS, other customers (over whom the MPS has no say) and their employer.

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