Agenda item

Norse Joint Venture Partnership



-        Tracy McKim – Head of People, Policy and Transformation

-        Rhys Cornwall – Strategic Director – Transformation and Corporate Centre

-        Lyndon Watkins – Managing Director of Newport Norse

-        Mark McSweeney – Director – Professional and Contract Services – Newport Norse

-        Councillor Laura Lacey – Cabinet Member for Infrastructure


The Head of People, Policy and Transformation introduced the committee to the Newport Norse representatives. The Managing Director of Newport Norse provided an overview through a presentation of the joint venture plan and covered the turnover, profit sharing and covered the main points of the report such as performance monitoring and the meeting arrangements in place for review and discussions with the authority and schools in particular. The Partner advised the Committee of the pipeline of work planned with the council for the next 2-3 years but assured Members they are aware of the areas they could improve on and that they will be working harder with the council with austerity coming shortly. The Members were informed of the office based in Cleppa Park and were offered an open invitation to visit the team to see what they do.


Committee raised the following points:

-          A Member felt pleased to see that the partners are working with the schools to encourage young individuals for apprenticeships. In relation to value for money, as it is important for customer satisfaction. A number of head teachers seem to hold negative opinions on the efficiency of Norse and asked the partners for their comments on that.


The Managing Director advised that over the years as with any client/provider relationship there can be tensions. The partner has evidence of those which are looked into on a case by case basis, usually out of ten, only one of those have any substance for a complaint.


The Director clarified that the Corporate Landlord Policy is the council’s policy, and that Newport Norse are the agent for the policy. The partner highlighted there are occasions where structures have been built not in accordance with respective regulation in which Norse would have to do something about it to make it safe, and appreciated that some schools may complain. It was stressed that particular buildings such as schools should be safe from a health and safety compliance view.

It was noted the partners encourage all schools to go through in terms of the education liaison groups so they can sit down and discuss with the schools – when schools get quotes for certain things it may be they are looking at different materials such as timber instead of steel, for instance. The Partner admitted generally that some suppliers may be cheaper but not by a lot and felt it was important to mention they pay their employers the living wage.

The Head of People, Policy and Transformation highlighted that it is important to acknowledge how things can be perceived from the client side such as corporate landlord policy, and it’s important for schools know what Norse is, how it is priced and why that is. They work closely with education on that, but acknowledged there is more that they can do to improve on that.


-          In relation to the rebate section of the report; a Member asked the partners to confirm the proportion of profit that the Authority receives.


The Managing Director advised the Committee in the region of 50% with the way the contract is structured.


-          The Member also asked the partners to confirm what happens with the rest of the profit made.


In response, the Managing Director confirmed that most of it is in the public sector, a dividend goes to the parent company, Norfolk City Council who started Norse, and the rest goes to the Newport Norse group.


-          The Member then made an observation that they reinvest in the company and Norfolk City Council gets a dividend and asked if that is above the share that the partner receives.


The Managing Director confirmed that it is as they also put their work into it and share as they are the ultimate shareholder but informed Committee it is not a huge payment.


-          The Chair asked if that figure is published.


The Managing Director confirmed that it is and that he will follow that up to share with the committee as he was unable to confirm the figure from memory.


-          A Committee Member queried if all of the 298 Norse employees are on a full time contract.


In response, the Managing Director clarified that there is a variety of full time and part time staff, being both office and field based. On average there are around 70-80 in office based roles as it has expanded, with a number of those roles being part time. They aim to attract the best staff with their flexible arrangements.


-          The Member acknowledged that Norse spend £13.9 million on staff wages, and asked if that number included the work that has been sub-contracted out. How many are full time.


The Managing Director confirmed that the number provided includes the sub-contracted work. Norse have 35 full time members of staff.


-          The Member asked if most of the work is from sub-contractors.


The Managing Director confirmed that out of their own labour, they do active maintenance and statutory testing, with minor works and providing technical services, but very often that work can be sub-contracted.


-          The Chair referred to Norse’s case study of a school needing aluminium windows but ordering from another trader for the wrong material. The Chair asked Norse to explain who would have got the material for the school, who negotiated with them and asked whether it was contractors. And asked if they get a range of people to bid and then Norse select the best.


The Director for Contracts highlighted that the issue they face is that as the school is the purchaser, they dictate the specifics and the Managing Director confirmed that the school do not have to use them.

The Director for Contracts confirmed that they do indeed review the bids and select which one would be best.


-          The Chair asked the partners if those mentioned would be local.


The Director for Contracts confirmed they are as they aim to hire and bring in local. The Managing Director advised on page 11 there is a statistic which highlights around 79% of the work is given locally.


-          A Member referred to the number of 25 trainee apprentices and asked what the partners do to encourage female and individuals from ethnic minorities to work in the construction industry.


The Managing Director recognised that the majority of individuals coming to work in are male and they have struggled to change that statistic as they have struggled for direct labour. Members were assured that the Norse team would like to have female operatives in that area and appreciated that it is something they need to work on. It was mentioned that they have a significant number of females in terms of office based roles, their gender split in the overall work force is 40/60 at the moment.


The Director with Contracts agreed and added that they went to Llanwern pre-pandemic and will look to visit John Frost School to talk about construction work opportunities with the pupils. They attend job fairs and also have a kick start scheme in which a female law graduate came in for training and has now been given a permanent role there.


-          A Member asked the Partners if they work with local universities to attract students to the roles.


The Managing Director recognised that they could look into it as they could do more on that. It was mentioned that the benchmark scheme he once worked on in Somerset Council was pre-dominantly white males in the profession. It was acknowledged there is a course being developed with Jeff Bacon in Bristol on surveyors on how to bring in more people. They advised they are looking at it constantly as it is a competitive market.


-          A Member expressed his interest in the apprentice training statistics as it is an important role to upskill people in the local area. It was highlighted that they have 298 staff and have 500 training days, which equates to around 1.5 training days per person a year. The Member felt that number did not sound like much training.


The Director for Contracts felt it was important to note that 200 of those staff are cleaners who work part time and may do less than 15 hours; which skewed the numbers.


The Managing Director added that some employees are undertaking a Masters of Business Administration. Many of the colleagues who work in the administration team are undertaking courses, when they apply that number to the office based staff then that number would go up as it was highlighted that Norse pay for those courses.

The Director for Contracts also mentioned that teambuilding is not classed as training. Members were informed that Norse does lots of work on that but mentioned that it is not included in the report.

The Director also highlighted they have a system called The Learning Hive which is an online system which ensures all employees are up to date on their health and safety training and a range of different training modules.


-          A Member wished to know more on the partner’s plans for sustainability and asked if they could see their policy on climate change to see how it aligns with the council’s policy.


The Managing Director explained that they will be introducing climate change as a standing item in their board. They support the council on climate change, it is built in the environment and group policy. It was mentioned that the group aspirations net carbon aim is by 2050 and the council’s is by 2030.

It was mentioned that Norse have a tradition base fleet of around 30 vehicles which are all leased, and that they are looking to change the electrified fleet. They are currently in talks with the council on how long that aspiration would need to become a reality.


The Managing Director also mentioned that they are looking to develop this, noted that the council has undergone Carbon literacy training and have therefore asked for the provider so they can do it for Norse also. The Head of People, Policy and Transformation added that it has been mentioned as it is important to weave it into their decisions.


-          A Member asked the partners to confirm their total profit from 2021-2022 and if any of the profit has gone into local charities/community groups. It was acknowledged that Newport Norse has arranged work for charities such as Age UK and MacMillan.


The Managing Director confirmed that they have worked for local women’s shelter, and pre-covid, they were able to take children to the pantomime, supported St. David’s Hospice and that they usually do a sponsored bike ride to support schools also for their playing kits and for local organisations.


-          A Member asked if they have built or invested in Newport with projects.


The Managing Director confirmed that they have not but explained that staff have a number of volunteering hours where they can work on projects. If there is a Newport City Council project whereby the case and aspiration may not match, the Newport Norse staff can get involved with jobs such as gardening and decorating jobs, for instance. The Committee was assured that colleagues are encouraged to use their volunteering hours.


Discussion ensued about the profit share model and the Managing Director explained the value is shared between Norse and the Council which can be shared in a range of forms for the council, such as a financial sum or as goods and services. The Director acknowledged that the social value now is very different from the value from when the contract was signed back in 2014. Part of the ongoing discussion amongst the partnership, if the Council were to extend the contract, then there are things that the council would like to see differently due to the changes over time.


The Head of People, Policy and Transformation recognised that it is important to highlight what Newport City gets in return from the partnership, for instance, with the profit share model. The Council made those decisions on the profit share model and felt it was important to mention that. At the renewal, the council and partner will consider those in discussion.


-          A Member noted that the partner’s presentation was very similar to the last year and that there is not much change in terms of profit/rebate and asked why the partners have not done a breakdown this year on their compliments/complaints data. The Member also asked the partners to confirm how they see the potentially last two years of the contract going; and asked where it could benefit both services users and the partners.


The Managing Director explained the difference on complaints procedures, but agreed that they could produce more and share more detail on that if the Members would like that information, it has just been a change of style.


The Chair and Members wished to follow that up with the partner.


Further to the discussion, the Managing Director continued to explain that for the last two years, the operating model will be much more secure and with customer feedback, the Newport Norse team undertake an annual survey in terms of customers such as schools. It was explained they undertake the work and also request the feedback while it is being done. It was stated that the approval rate is along the lines of 98% and they are trying to maintain that level of satisfaction and go beyond that.


The Director recognised that the uncertainty in the relationship has been discussed due to there being two years left in the contract. They strive to perform the best services they can and that they are committed to Newport and will continue to look to provide certainty.


Members were informed that the feedback has improved and that they receive around 2000 calls a month through the helpdesk which translate to thousand work orders. On the scale of the operations, there are bound to be issues; as if they would not receive communication from their customers then those customers would be hiding the problem and not tackling the issue. It is also in the staff’s interest to provide a good service as they are local, therefore are recipients of their work.


-          The Chair asked how independent the Partner’s report is on compliments.


The Managing Director confirmed that they have a complaints procedure as they are reported quarterly to the board. It was mentioned that they did not have any complaints in the latest one and the council has two independent representatives on that board.


-          A Member felt he appreciated the concept of the public ownership side of Norse, paying their staff the real living wage and local people being employed through them. However it was noted the report lacked feedback of customer satisfaction. The Member suggested that Norse could include the customer surveys in future on cost efficiency and feedback from the service users.


In response the Managing Director said that on value for money report each year they run through that and agreed to share their feedback records after the meeting. For their benchmark rates, they do an annual survey from customer experiences and assured the Members that they are taking the Committee’s feedback on board.


-          A Member expressed his concern on the rebate model during the current financial climate and asked the partners if they would look to keep it the same.


The Managing Director appreciated the Member may have philosophical views on that. The Director gave a breakdown if the Council went to another provider with a 10% rate. If that work went through Norse rather than external with the same profit margin, the Council in effect gets 5% back. Norse accepted lower profit margins than any other private company would. The Rebate is for value share. It could be that the council may want that share done in a different way, they could either have it given back through work done or rather have the money to use.


-          Discussion ensued and the Member highlighted the cost of the living crisis and believed that the service users are overspending to get the rebate back and was conscious that it is taxpayers’ money. It was appreciated that the model was set years ago and that the partnership does return money to the council; but the Councillor felt during the current climate, Norse’s prices being higher than others so the council may not be saving that much and a new model could be brought in.


The Managing Director noted the Member’s comments and asserted that the alternative for the council would be to insource everything, the supply chain as well. It would be a huge entity for the council to arrange. The Director of Contracts stated that he has been in the public sector industry for 38 years and felt that the current model is the best he has worked with as they can make a decision quickly.


The Managing Director acknowledged the concerns mentioned and assured the Committee that they review their benchmark trade rates and sit in the middle of their competition. The Head of People, Policy and Transformation reminded Members that it was the proposal at the time when the joint venture was agreed and that the view from the committee on how the partnership is perceived and how the public money is spent is just as important to note.


-          A Member mentioned the facilities offer to the council in the report, and noted that project management was included. The Member referred to the work at Bassaleg High School with Wilmott Dixon and asked if they selected them or did the panel group select from the school.


The Managing Director clarified that Wilmott Dixon are the contractor and the Director for Contracts highlighted that they were the contract manager and ran the procurement selection, the project between Wilmott Dixon and the Council. The Director mentioned that Norse were not involved with the contractual arrangement, just the procurement.


The Managing Director advised that the procurement is based on the framework that the Welsh Government determined, and that it is specific because of their funding arrangement.




-        The Committee thanked the Officers from the Newport Norse Joint Venture Partnership and considered the report and presentation that was shown. The Committee decided that although there has been satisfactory progress against the initial aims of the partnership, some Members spoke of disagreement about the existing profit split model that was agreed at the start of the contract.


Comments were made that with the current cost of living climate, the model perceives an overspend on services and the partnership not directly showing corporate responsibility. Members also wished to comment that when discussing a possible renewal of the contract, the partnership arrangements need to consider corporate social responsibility and social value further, as well as reconsidering the cost model. Further comment was made that the next partnership with Norse or other, should be operated as an open book with a fixed profit margin, maybe 3 - 4%. There would be little or no risk to the partner as they have 100% of the work, should charge the true cost and still have a profit of 4% to operate the management of their responsibilities.


-        The Committee think that better communication is needed between Norse and NCC/clients in relation to the costing model.


-        That Norse and the partnership should consider climate change in its decisions and planning.


-        The Committee thanked Newport Norse for their invitation to their Newport Head Office and wished to take up their offer to visit their site to see how things are operated there.


-        The Committee that unlike last year’s report, there were no breakdown of the compliments and complaints attached. Members would like to receive the full details of the complaints. Members also advised it would be helpful to see customer surveys undertaken and included in performance reporting.


-        The Committee asked the partners to provide a more detailed breakdown of their staff numbers and to clarify how much of the work is subcontracted. The Committee also requested what the gender and ethnicity of the apprenticeships/trainees were, would like to see this area monitored on an annual basis and also what action they might take to move towards ensuring they have a diverse workforce.


-        The Members would like to know the figure of money which goes into the public services and how much shares Norfolk Council gets. Members also wish to know where does the rebate money go, and how is it used and recorded? Members stated that it is not transparent and for clarity, very suspect to interpretation by the public.




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