Authority to bid for Transport for London vehicle removal & storage tender

Report: 10
Date: 21 December 2006
By: Acting Director of Resources on behalf of the Commissioner

Summary

This report makes application for the Vehicle Recovery and Examination Service to be given authority to bid for all or part of the Transport for London (TfL) London-wide removal service contract currently out to OJEU tender. VRES currently undertakes this service through a Special Service Agreement between TfL and MPS resulting in budget income of £1.24m. This report seeks to continue that service through a formal contract.

A. Recommendations

That

1. MPA members are invited to give authority for the Vehicle Recovery and Examination Service to bid for the Transport for London red route/bus corridor removal and storage OJEU contract.
2. Full costings will be agreed with the Treasurer and Internal Audit prior to the submission of any bid sent to TfL.
3. A further report outlining the options will be submitted to members before any bid is made.

B. Supporting information

Introduction

1. Application is made for the Vehicle Recovery and Examination Service (VRES) to be granted authority to bid for all or part of the Transport for London (TfL) removal and car pound services now out to tender under the OJEU contract award process. The report outlines the current arrangements, the income benefits to the MPS as well as the impact both human and financial should VRES not be awarded the contract.

Background

2. Enforcement of the TfL red routes and bus corridors continues to undergo change; firstly with the establishment of the joint TfL/MPS Special Services Agreement (SSA), the setting up of the Transport OCU, the decriminalisation of the red routes in 2005 and currently TfL’s decision to expand the removal and car pound service and to place it out to OJEU tender.

3. The MPA is empowered by Section 1 of the Local Authority Goods and Services Act 1970 to provide "administrative, professional or technical services" to any other legal person, including local authorities and public bodies. VRES falls within the scope of "technical services" and it is therefore open to the MPA to decide to tender for the provision of services to TfL.

4. It is essential that Members understand this application relates to a commercial tender process with the associated obligations normally expected, e.g. penalties for non-performance. The uniqueness of this application is fully recognised by the MPS and as a consequence, there is full commitment to ensure MPA members are informed at each stage of the process and, in particular, the intended governance arrangements.

5. Since the formation of the Transport OCU (TOCU) in 2002, VRES has provided the removal and enforcement capability as part of the terms of the TfL/MPS SSA. Removal resources are drawn from the VRES Special Operations Removal Unit (SOR), which is retained for other police supporting roles including, central London security patrols, public order and ceremonial events. Operation deployment on the red routes etc. is set by the TOCU whilst TfL fund the service through the TOCU budget allocation.

6. VRES also provides the car pound service currently utilising space at the Angerstein Centre, Charlton. Enhanced service delivery to TfL, also formed part of the business case submitted to the MPA in 2004, additional storage space being provided at the second site at Perivale. This pound is due to come on line in April 2007.

7. The method of funding the car pound service has undergone changes since 2002. Until November 2004 red route parking irregularities remained a criminal offence. Funding came from the statutory fees charged to the offending motorist and retained by the VRES. The red routes were decriminalised in November 2004, further reducing the number of criminal parking offences. As a consequence the funding arrangements for red route offences changed in April 2005. Since that date the MPS charge TfL for the service provision.

Transport for London OJEU Tender/Contract Process

8. As part of the London-wide Removal Service published in 2006 TfL has in accordance with the OJEU regulations offered the removal (excluding enforcement) and car pound services out for tender. The TfL briefing suggests a significantly enhanced service than currently provided, with the London-wide contract being divided into a number of sectors, which contractors may tender. The briefing further suggests that the contract(s) award programme will be rolled out between November 2007 and February 2008.

9. The tender of interest process was concluded on 10th November 2006 VRES having presented its notice of interest to TfL prior to the closing date, assistance having been given by Procurement Services. The next stage of the process, including the detailed specification is scheduled for December. The specification will determine the level to which the VRES (if permitted) will bid. At this time it is intended that the VRES bid be kept within existing/available resource levels. Therefore it is probable that VRES may only bid for a single sector.

10. The advantages of VRES bidding for the London–wide contract(s) include:

• Support to the TfL/MPS SSA allowing the TOCU to provide/control all services relevant to red route and bus corridor enforcement and removal.
• Provision of a significant income stream, which contributes to the overall running cost of the VRES.
• Best value use of SOR spare capacity around the peaks and troughs of its other policing demands

11. Should authority to bid not be given, the SOR overheads will increase by 76% against budget. This will mean that a review of this unit will have to be undertaken. The roles of undertaking public order, London security and ceremonial duties will not then be able to be fulfilled without significant increase in budget funding. Risks would include:

• Retaining the existing vehicle fleet, but restructuring the unit to assist with the 24/7 MPS requirement to recover vehicles seized for no insurance – a role shortly to be offered out to third party contractors.
• Alternatively downsizing SOR and selling off its vehicle assets to meet only its security and public order commitments. This may impact on the number of the specialist vehicle recovery officers and traffic wardens whose skills may not be conducive to redeployment within the MPS.
• Utilise the car pound space to further reduce third party storage costs and to increase the potential to seize more uninsured vehicles, which has separate VRES budget implications.

Abbreviations & acronyms

VRES

Vehicle Recovery & Examination Service

TfL

Transport for London

OJEU

Official Journal of the European Union

SSA 

Special Services Agreement

TOCU 

Transport Operational Command Unit

SOR 

Special Operations Removal Unit

C. Race and equality impact

The matters raised within this report have no significant impact upon race and diversity.

D. Financial implications

1. The VRES budget income from the TfL/MPS Special Services Agreement for the financial years 2003/4 to 2006/7 for the recovery service and car pound service at the Angerstein Centre, Charlton is shown below:

2. TfL have released information, which indicates that the London-wide contract (including a single sector) has a far greater resource requirement than currently provided. However, without the detailed tender specifications financial assessments as to cost and income potential is not yet feasible.

3. Should VRES be invited to bid for the contract(s), it is proposed that all relevant costings will be drawn up by the MPS Finance Services in liaison with the MPA Treasurer and Internal Audit prior to release to Transport for London. Further reports will be presented to Members prior to submitting any tender. Given the time limited nature of the process it may be necessary to seek approval to another MPA Committee.

4. Should authority not be approved, the unit will have to make savings to the value of the 2006/7 budgeted cost recovery income.

E. Legal implications

Should the VRES be successful in securing a contract, legal advice will be sort in the drawing up of any contract and supporting documentation.

F. Background papers

None

G. Contact details

Report author: Stephen Ditchburn Head of VRES

For more information contact:

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

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