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CABINET -

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									                      CABINET – 27TH NOVEMBER 2008

       Report of the Director of Partnerships and Customer Services

ITEM 7         RESTRUCTURING OF CUSTOMER PAYMENT OPTIONS

Purpose of Report

To seek Cabinet approval for restructuring of the Council’s customer payment
options and the implementation of suitable alternative payment mechanisms
(including approval of requested Reinvestment Reserve funding).

Recommendations

1) That a restructure of the Cash Office Service be approved, which comprises:

   •   Withdrawal of the face-to-face Counter service (with effect from 30th April
       2009);
   •   Implementation of suitable alternative payment mechanisms (including
       introduction of Allpay barcoding solutions, and further promotion of Direct
       Debit, internet and automated telephone services);
   •   Deletion of Full-time and Part-time Cashier posts;
   •   Creation of additional generic Customer Advisor post and assimilation of
       Senior Cashier into this post;
   •   Creation of additional part-time (15 hours per week) generic Customer
       Services Admin resource to assist with residual back-office payment
       processing;

2) That in order to fund the above proposals a budget of up to £10k, to be funded
from the Reinvestment Reserve, be approved to support the introduction of
barcoding solutions and fund necessary communications and publicity material
advising customers of the revised payment options available (Appendix A).

3) That funding of up to £25k be included in the 2009/10 Governance &
Procurement Capital Plan to redesign the former Counter area to integrate fully into
Customer Service Centre and provide additional Customer Advisor positions
following the restructure proposed above.


Reasons

1) To offer customers greater local access to payments in a way and at a time that
suits them and their lifestyles, incorporating a suitable period of dual running of both
existing and new payment methods, while realising ongoing financial savings from
service reengineering.

2) To fund the timely introduction of barcoding solutions and maximise customer
awareness of alternative payment options and locations prior to and following
withdrawal of counter service.

3) To accommodate the revised working practices required and reinforce that
Southfields is a ‘cashless’ office, while also relieving existing pressure on interview
rooms, increasing Customer Service Centre desk capacity and future-proofing the
                                           5
possibility of delivering additional services from Customer Service Centre in due
course.


Policy Context

The current Corporate Plan undertakes “to develop innovative ways of delivering
services …to the public and harness new technology to improve the way we
conduct our business” while ensuring the Council “deliver value for money on all
council services”, while the Mission statement sets out that “we aim to be accessible
… to all our service users”.


Background

Cash Office Use

Traditionally Councils have collected rent, council tax and other such payments via
one central site, with opening hours limited to the normal 9am to 5pm of a standard
working week. Recent years have seen a significant migration from such traditional
over-the-counter payments to new and alternative payment channels, coming at a
time when the public are demanding greater choice and freedom to make their
payments at a time and in a place and way that suits them and their lifestyle.

The Council has not been immune to this change. Face-to-face transactions at the
Cash Office in the 2007/8 financial year were down 30% on the same period in
2005/6. Postal remittances processed were similarly down 9% on the period, giving
an overall reduction in Cash Office activity of 24% on a like-for-like basis. This trend
has continued into the current financial year with a further 8% fall in the total
number of transactions handled in the first six months compared with the same
period last year, which is down 35% overall on the same period 2005/6.

The overall percentage of payments to the Council which come via the Cash Office
has similarly reduced in recent years. In 2005/6 26% of all payments to the Council
were made via the Cash Office (18% over-the-counter, 8% by post). By 2007/8 this
had decreased to 18% (11% over-the-counter, 7% by post), with the significant
majority of the fall due to a reduction in over-the-counter activity.

Of those payments still made over the counter, Council Tax / NNDR and
Charnwood Neighbourhood Housing (CNH) rents make up the significant majority,
accounting for 56% and 31% of all face-to-face Cash Office transactions respectively.
‘Miscellaneous Income’ (internal General Ledger coded entries) account for a further
8%, while 3% of face-to-face transactions relate to ‘Sundry Debtors’ (invoices raised).

A November 2007 survey found 90% of Cash Office users surveyed came from the
LE11 or LE12 area, whereas population-wise only 72% of the Borough live here,
giving a disproportionate slant in Cash Office usage (and a disproportionate slant in
access to services) away from the 40000 or so persons living further afield in the
Borough. These proposals will help address this imbalance, while enhancing
accessibility to payment options for all.




                                           6
Peer Comparisons

In today’s world it is important for any organisation collecting monies to maximise
opportunities for payment by offering an increased number of payment methods and
places and more flexible opening times to enhance customer convenience.

In recent years a number of Charnwood’s peers have revised their customer
payment options, withdrawing their counter service to become ‘cashless’ authorities
while implementing alternatives to allow greater customer choice and ease of
payment (predominantly Allpay payment solutions and extension of Direct Debits).

Most immediate is Melton Borough Council, who ceased their counter service in
October 2007. Rutland County Council had done so a couple of months earlier,
while other ‘cashless’ authorities in the East Midlands include South Kesteven
District Council (2006), Kettering Borough Council, North Kesteven Borough
Council, High Peak Borough Council, Derbyshire Dales District Council (2004) and
Boston Borough Council (2003). Several of our near neighbours are also known to
be considering similar restructuring options at the present time.

Melton’s experience in particular has shown the additional resilience that such a
move can bring and has meant that collection of payments has been able to continue
as normal despite the loss of the Council offices through fire. Had the fire been
twelve months earlier collection rates and cashflow would undoubtedly have
suffered.

The transition to a ‘cashless’ authority has generally run smoothly for all of the
above. Each implemented alternative payment options and heavily promoted and
publicized these for a period prior to closure. All have retained some form of back-
office function to process postal remittances received and undertake cash system
administration tasks. Collection rates have remained on a par (and in some instances
even increased). Our reorganisation proposals are along broadly similar lines.


Alternative Payment Options

The experiences of peer cashless Councils suggest that further promotion of Direct
Debit and extension of the Allpay payment solutions already successfully used by
CNH for rent payments (including adding barcoding solutions) are the most cost-
effective, secure and appropriate options to follow. Further extension and
promotion of 24 hour electronic payment methods such as telephone and
internet complete the suite of progressive, efficient and cost-effective payment
options on offer. (Other possible options have been explored and considered in a
more detailed paper supporting this document, but are not felt to be appropriate at
this time.)

a) Direct Debit – Direct Debit is possibly the easiest payment method available for
the Customer. It is also the cheapest method of collecting cash for the council.
Approximately 60% (39000) of those liable to pay Council Tax already pay by Direct
Debit, mostly in 10 instalments, and this number is likely to rise with the
introduction of ‘paperless’ Direct Debits early in 2009. Of the 6200 CNH tenants,
approximately 19% currently pay by Direct Debit (payable monthly in advance),
while 65% (9000) of the 13900 Garden Waste Bin customers have similarly now
opted to pay by Direct Debit from November 2008.

                                         7
Other services suitable for payment by Direct Debit include those with regular
annual, quarterly or monthly billings, such as sundry debtors, municipal hire charges
and the likes. Conversion to Direct Debit should continue to be sought wherever
possible to ease the collection / payment process in preference to other payment
options.

b) Allpay – Direct Debit is not suitable for everyone. Allpay offer a range of
alternative payment products and solutions designed to provide the maximum
convenience and choice for people in how, where and when they pay their bills.
Their swipe cards are already successfully used by Charnwood Neighbourhood
Housing (CNH) for rent payments, being introduced in July 2006 to all 5500 tenants
not paying rent by Direct Debit, and their barcoding solution is well positioned to
meet the needs of Council Tax bills and Sundry Debtor invoicing (among others).

By using an Allpay swipe card or barcoded bill customers can make cash payments
for free at any of the 34000 UK outlets on the Allpay payment network, comprising
19000 PayPoint outlets, 800 Woolworths stores and 14000 Post Office branches
across the UK (Post Offices also accept payments by cheque or debit card for free
as well).

Within Charnwood there are currently 33 Post Offices and 29 PayPoint outlets
(including Woolworths) where customers could pay (Appendix D). For most
customers these outlets will be closer to home, so payments can be made locally
while out shopping in the Borough rather than having to make a special trip to the
Council offices in Loughborough, but they can also be made at any of the other
outlets across the UK, i.e. if away on holiday or if a relative makes the payments on a
customer’s behalf.

With many PayPoints located in newsagents, convenience stores, supermarkets and
garages this network also offers customers greater accessibility and longer and more
convenient opening hours. The Cash Office counter is currently open for 37 hours
per week, whereas the average PayPoint outlet is open for some 101 hours per
week (evenings, weekends and public holidays as well), offering greater freedom of
when as well as where to pay.

Such local shops and Post Offices were once the focal point of the community. By
facilitating their greater usage and encouraging their patronage by Allpay customers
we can also help support them and their position within the communities they serve,
particularly at a time when some local services are under threat.

With Allpay’s barcoding solution, a barcode can be printed at the foot of a bill
instead of issuing a swipe card. This gives the freedom to produce barcoded bills in-
house as and when needed, i.e. house moves, lost / replacement bills etc. This also
gives a greater degree of control than the swipe cards, which need to be reordered
direct from Allpay, and without the ongoing card issuance costs associated with this
(£1.10 a time for next-day despatch). This is particularly pertinent given Council
Tax’s relatively high “daily” billing numbers, however barcoding, like Direct Debit, is
also ideal for quarterly bills or one-off payments such as sundry debtors, municipal
hire charges, garden waste bin renewals, or any other invoices generated via
Agresso. Repayments of Benefit overpayments would be similarly suited to barcoded
bills, as would CNH’s invoices for overnight accommodation.

There will be some one-off initial set up costs for barcode software integration
within Agresso and Academy, totalling approx £3k, and for the required compliance
                                        8
testing of the printed results (approx £2k, £650 per key service). These are to be
met from the Reinvestment Reserve bid accompanying this report. However, outside
of these, the ongoing cost of utilizing Allpay will be lower than the year-end support
service recharges for providing the over-the-counter Cash Office services, resulting
in ongoing efficiency savings for the Council.

c) 24-hour Electronic Payments - Electronic payment methods such as the
automated telephone payment service and the internet are already available
24 hours a day, 7 days a week. Take up has flourished in recent years with over
31000 such payments in 2007/8 (up 25% on 2006/7), equivalent to over a quarter of
the transactions still handled through the Cash Office. Payments which can already
be made this way include Council Tax; Business Rates; Council Mortgages; Debtor
Invoices; Excess Charge Notices (parking fines); Housing Benefit Overpayment;
Charnwood Neighbourhood Housing Invoices (including rent); payments for
Collection of Bulky Items; and Garden Waste Bin services.

The number of telephone lines to process automated payments was doubled last
year (from 4 to 8 lines) following reports of engaged lines at peak invoicing times.
The closure of the Cash Office is likely to encourage greater use of the payment
lines, but further capacity can be easily added should circumstances require (£4000
for each additional block of 4 lines).


Impact on Staff and Premises

The usual restructure and reorganisation procedures have been followed, including a
three week consultation period during which the views of Staff, Management,
Unison, and other interested parties were sought. The responses are summarised in
Appendix C.

The Cash Office presently consists of one full-time Senior Cashier (Scale 4), plus a
full-time and a part-time Cashier totalling 108.5 hours per week (2.94 Full Time
Equivalent staff). Currently only the Senior Cashier is in post so will be the only staff
member in a potential redundancy situation following the deletion of Cash Office
posts proposed under this reorganisation.

It is proposed that an additional Scale 4 Customer Services Advisor post is created
(funding earmarked from existing Cash Office budget) and the ‘at risk’ Senior
Cashier is assimilated into this post (the staff member already meets the Essential
and Desirable skills set of the generic Customer Advisor person specification).

Initially this additional Advisor will act as a ‘bridge’ between the old Cash Office and
the new regime, primarily accepting payments by cheque and debit / credit card from
those customers inadvertently still visiting us while they get used to Southfields being
a ‘cashless’ office. The Advisor will not be accepting cash payments, but will instead
direct customers to the alternative payment channels available to reduce the need
for future visits and /or arrange for barcoded bills or invoices to be issued as
appropriate. As the throughput of bill payment customers drops away over time this
can then revert to the more ‘traditional’ multi-skilled Advisor role to further
enhance the Customer Service Centre (CSC)’s service proposition.

Other Advisors will also be able to use paye.net to accept cheque and debit / credit
card payments arising from the enquiries they are dealing with. While not intended
for standalone payments, this will enable immediate payments to be made from
                                         9
enquiries such as Council Tax arrangements, instalments towards repaying Benefits
overpayments, purchase of Planning documents, payments for Residents Parking
Permits and other similar matters at first point of contact. There will also be a need
to retain the ability to accept small amounts of cash in truly exceptional
circumstances (i.e. to avoid imminent bailiff / debt recovery actions) where it is not
appropriate on that occasion to redirect the customer to the alternative payment
channels available.

All peer Councils who have closed their counters have found it necessary to retain
some form of back-office function. It is anticipated that there will still be in the
region of 50000 retained transactions following the counter closure, primarily postal
remittances and internal Miscellaneous and General Ledger payments. These will
continue to require secure back-office processing alongside the ongoing cash system
and financial administration tasks. Such processing can be partially resourced from
within Customer Services Admin’s existing establishment and it is proposed that that
this be supplemented by additional resource (approx 15 hours per week at Scale 2,
or 0.4 FTE) from the existing Cash Office budget. Staffing levels will be kept under
review to ensure they remain appropriate.

Structural alterations (removing the public-facing area of the cash office, providing a
further three Advisor desks to match the current Customer Service Centre
arrangements and re-installing the secure deposit box) will be required to
accommodate this new way of working and to reinforce that Southfields is now a
‘cashless’ office. The desk capacity of the Customer Service Centre is already below
current operational requirements, with knock-on effects on interview room usage
and their oversubscription / undercapacity. The required alterations would
overcome this, providing additional desk capacity to accommodate the proposed
Advisor to handle the residual payments and ‘bridge’ the changeover, easing pressure
on interview rooms to facilitate more private discussions should customers prefer,
while future-proofing the possibility of delivering additional services from the CSC.
The alterations are to be funded from Property Services’ 2009/10 Governance &
Procurement Capital Plan.


Arrangements For Internal Customers

Payments from internal customers generally come under the ‘Miscellaneous Income’
umbrella. This covers any General Ledger coded entries, such as departmental
bankings for Planning Applications, Leisure Passes, Taxi or Premises Licences, Bulky
Waste Collections, Residents Parking Permits, monies from the ‘Breakout’ and
vending machines etc.

These are mostly ‘customer not present’ payments, paid in bulk over the counter,
and in some cases include cash. It is proposed that these will be paid direct into the
back office instead via sealed paying-in bags (contents subject to checking), utilising
the secure deposit box wherever possible. However, attempts should be made by all
internal departments to eliminate such transactions and promote alternative
methods of payment wherever possible.


Impact on Cash Receipting, Finance and Accountancy

Withdrawal of the counter service will not negate the need to operate a cash
receipting system, due to the high volume of postal remittances and General Ledger
                                        10
payments which will still require processing (approx 50000 items per annum, as
noted above). The replacement of the ageing cash receipting system (Spectrum) by
Capita’s Axis Counter Receipting (ACR) system was at an advanced stage, and much
of the preparation work undertaken before reorganization of the Cash Office was
proposed. The paye.net system could not realistically accommodate this level of
transactions, and we recommend prompt migration to ACR after the counter
closure is complete in order to maximize the potential efficiency gains from its
deployment. (The purchase of ACR formed part of a package of services purchased
from Capita which have already been paid for in full.)

The move to alternative payment methods will inevitably have cashflow implications.
An increase in cheques received instead of cash will not impact on the Council’s
bank balance, but unlike cash there will be two days’ delay in the funds being
‘cleared’ for interest-earning purposes. Increased use of Direct Debits may offset
this, as the Council originates the payment requests and so has greater control over
when funds should be received. Increased awareness of Telephone and Internet
payment facilities may also speed collection of cash through providing easier / more
convenient ways to pay. Use of Allpay (barcoding or swipe cards) may also speed up
collection of cash as customers have more (and more accessible) outlets to pay at.

The transfer of funds from Allpay’s client account to the Council takes between 5
and 10 working days dependent on the item costs and charging structures agreed.
Council cashflow would therefore be delayed for this initial period until the regular
remittance cycle is established, with a resultant reduction in bank balances held and
potential loss of interest for the period. On average the Cash Office takes £16k cash
per day. Assuming 90% of cash payers migrate to Allpay this equates to loss of
interest on £144kk worth of Council funds cumulatively over 10 days (£16k x 90% x
10 days), assuming all of these funds are normally moved to interest bearing
accounts rather than being used as ordinary current account working balances /
cashflow. Based on an estimated 3% credit interest rate this equates to approx £120
lost interest over the 10 day period while the regular remittance cycle is established.

At present the costs of providing the Cash Office service are recharged internally to
user-services at year-end as part of the support service recharges, in a similar way to
how other cash collection charges (i.e. bank charges) are apportioned. We
recommend a similar accounting treatment for the Allpay charges, with
establishment of a suitable Finance budget code and costs recharged from Finance
(along with the other support service recharges) at year end, based on Allpay’s
separate invoices in respect of each service. Cash collection is a corporate overhead,
and it would not be appropriate for individual budgets to be set up for each cost
centre pro-rata to anticipated transaction levels.


Pricing

There are only two providers in the bill payment services market, Allpay and the Co-
Operative Bank. We have recommended procurement of a contract with Allpay on
the grounds of Contract Procedure Rule 11 (1) (c) and this has been approved by
the Contract Compliance Officer.

Allpay are a Limited Company, allpay.net Limited, founded in 1996 and are market
leaders in the bill payment field. They are used by over 40 councils, 250 housing
associations and a number of other organizations. All funds collected on behalf of
client organisations are held in individually-designated trust accounts in the name of
                                           11
the client and do not form part of the assets of Allpay. Allpay also maintain
appropriate fidelity insurance and other such insurances necessary for this type of
business.

Consideration has been given to becoming affiliate members of the Northern
Housing Consortium (at a membership cost of @£800 per annum) to take advantage
of the preferential Allpay rates offered to partners (as the consortium procurement
of Allpay already meets the Public Contracts Regulations 2006 and the European
Union Procurement Directive and is fully OJEU Official Journal of the European
Union compliant). However, given the relatively low anticipated throughput (50-
100,000 items per annum) it transpires that membership would bring no further
shading of the transaction charges already on offer from Allpay, only savings on initial
card embossing and encoding if we were opting for swipe cards rather than the
barcoding route. We can nonetheless take some assurance that the rates already
offered by Allpay are fine and ‘best value’, given that they are effectively the same as
if we were members utilising the consortium’s existing OJEU compliant agreement.

Assuming all current over-the-counter transactions migrate to Allpay (excluding
CNH rents, as their Allpay collection costs will be payable by CNH directly), there
will be potentially 53000 chargeable transactions per annum. Each transaction will
cost 42.78p, based on the standard 10-working day transfer. To shorten this to the
minimum 5-day cycle would attract a premium of 3p per item on the transaction
costs. On potentially 53000 transactions this equates to an extra £1590 per annum
to receive the funds in 5 rather than 10 days.

By way of comparison, direct Cash Office processing costs in 2007/8 equated to
@57p per transaction (excluding support service recharges and other indirect costs,
which will continue to be incurred by the Council irrespective of the counter
closure).

Finance will need to determine whether the interest that would be gained by
receiving the funds 5 days earlier outweighs the additional cost of £1590 per annum,
and guide the contract negotiations accordingly.


Financial Implications

The Revenue and Capital costs and savings are set out on the next page.

Based on the standard 10-day remittance option and assuming all current non-CNH
face-to-face transactions migrate to Allpay this would equate to a gross annual cost
of £22.7k (based on 53000 transactions x 42.78p). Assuming conservatively that 10%
of these customers will convert to Direct Debit, Internet or other payment method
the cost drops to £20.4k.

This is offset by £30k net savings realisable from withdrawal of the counter service
and approx £6.5k from Council Tax print cost savings on ‘annual’ and ‘daily’ payment
books), giving total net savings across the Council of £16k per annum from Year 3
(2010/11) onwards (allowing for capital costs for counter conversion in 2009/10).
Based on the experience of peer cashless councils it is reasonable to assume that
further migration to other payment methods will continue over time, realising
further savings year-on-year (approx £2k for every subsequent 10% migration).


                                          12
The £30k net savings from the original Cash Office budget have already been realised
in the 2008-9 Financial Year (Year 1). Counter services have continued to be
provided through cross-subsidisation from other Customer Services budget lines but
this is not sustainable beyond the end of the current financial year and is not an
option going forward. Similarly it is not possible under the current funding regime to
restructure payment methods and introduce Allpay barcoding across all bills while
simultaneously continuing to offer a counter service from one central location.

In real terms the additional Capital Costs identified under the accompanying
Reinvestment Reserve bid and the 2009/10 Governance and Procurement Plan are
largely offset by the Year 1 savings already realised.




                                         13
Financial Implications

- Revenue


Forecast savings – Cash Office:

                                                              £54.6k
       Salaries (original 2008/9 budget – 2.94 Full Time Equiv)
       Other savings from Cash Office budgets                   5.3k
                                                              £59.9k
       Additional Customer Advisor post (former Snr Cashier) (£23.0k)
       Additional Admin Assistant 0.4 FTE                    (£ 7.0k)
       Realisable Cash Office Savings                         £29.9k


Forecast savings – elsewhere:

       Revenues payment book printing costs                       @ £ 6.5k
       (current spend @£8.8K on annual & daily books)
                                                                    _____
Gross Savings identified                                            £36.4k




Forecast costs - Allpay

       Allpay transaction costs (based on 90% migration)            (£20.4k)

                                                                    ______
Realisable Savings (Year 2 onwards)                                 £16.0k per annum




- Capital 2008-9

       Barcode software integration costs                           £3.0k
       Barcode compliance testing costs                             £2.0k
       Publicity, communications and explanatory leaflets          @£5.0k
                                                                   £10.0k

       (to be funded from Reinvestment Reserve as per Appendix A)



- Capital 2009-10

       Counter conversion and CSC furnishing costs                  @£25.0k

       (to be funded from 2009/10 Governance & Procurement Capital Plan)


                                         14
Risk Management

The risks associated with the decision Cabinet is asked to make and proposed
actions to mitigate those risks are set out in the table below.

    Risk Identified    Likelihood Impact     Risk Management Actions Planned
Adverse publicity      High       Low      Proactive communications campaign
arising from                               to be initiated. As well as
withdrawal of                              encouraging take up of Direct Debit
counter service                            and alternative payment channels, it
                                           will also emphasise how use of
                                           Allpay offers customers a choice of
                                           over 60 new places where can pay
                                           council bills in cash, that are more
                                           accessible and closer to home
                                           (including details of where these
                                           are), with longer opening hours to
                                           suit them and their lifestyles (albeit
                                           by closing one central site with
                                           declining usage).
Inherent lag in        Medium    Low       Finance to determine whether the
receipt of funds                           additional cost to receive funds in 5
from Allpay                                days is proportionate to the impact
adversely affecting                        on working balances and loss of
Council balances                           interest from receiving funds on
and cashflow                               standard 10-day terms and guide the
                                           contract negotiations accordingly.

Adverse impact on      Low       Medium Experience of peer ‘cashless’
collection rates                         councils suggests that collection
(Council Tax, CNH                        rates remain high and in some cases
rents) as former                         have risen as a result of giving
Cash Office cash                         customers more options of where
payers refuse to pay                     and when to pay. Services will need
by other methods                         to continue to remain alert to any
                                         dips in collection rates and react
                                         accordingly.
Delay in readiness     Medium    High    Push for completion of compliance
of barcoding for                         work for Academy and external
annual Council Tax                       printers well ahead of annual billing
Billing                                  run. In worst case scenario
                                         barcoded bills could be issued at a
                                         later date to those Council Tax
                                         payers still using Cash Office if
                                         cannot meet annual billing deadlines.
Delay in readiness     Medium    Medium Push for earliest possible completion
of barcoding for                         of compliance work to allow longest
Agresso-based                            possible period of dual running in
invoices                                 tandem with Cash Office before
                                         withdrawal of counter services.
                                         Timing of counter closure could be
                                         delayed to facilitate this in worst
                                         case scenario.
                                      15
     Risk Identified    Likelihood Impact  Risk Management Actions Planned
 Delay in physical      Medium     Medium Push for work to be undertaken and
 alterations being                        completed as early as possible after
 completed                                counter service withdrawn,
                                          preferably outside of working hours
                                          to minimise any disruption to CSC
                                          customers and staff. Early transition
                                          to obviously ‘cashless’ office and
                                          enhanced CSC service sought.


Key Decision:          Yes

Appendixes:            Appendix A - Reinvestment Reserve bid
                       Appendix B – Summary of Consultation responses
                       Appendix C – Current Allpay outlets in Charnwood

Background Papers:     Contract Compliance waiver


Officer(s) to contact: Steve Phipps 01509 634605
                       steve.phipps@charnwood.gov.uk
                       Adrian Le Cras 01509 634595
                       adrian.le-cras@charnwood.gov.uk




                                        16
                    Appendix A - Reinvestment Reserve bid


          Application for Funding from the Reinvestment Reserve
                     (transcript of E-form submission)


DESCRIPTION

What will the funds be spent on?

This application should be read in conjunction with the report being submitted to
Cabinet on 27th November 2008 seeking approval for restructuring the Council’s
customer payment options, including withdrawal of the face-to-face counter service
and the implementation of suitable alternative bill payment methods, and specifically
the implementation of barcoding solutions.

It is recommended that a budget of up to £10k from the Reinvestment Reserve be
approved to support the introduction of barcoding solutions and fund the necessary
communications and publicity material required to maximise customer awareness of
alternative payment options and locations prior to and following withdrawal of
counter service.

This funding will contribute towards initial set up costs for barcode software
integration within Agresso and Academy, totalling approx £3k, and for the required
compliance testing of the printed results (approx £2k, £650 per key service).

The balance will fund the planned significant levels of publicity activity. These include
a substantial leaflet run (to accompany all Council Tax billings; to be handed out to
all Cash Office and Customer Service Centre users for a six week period
immediately prior to counter closure; to accompany all Debtor invoices issued; to be
available from partner sites such as John Storer House, the district libraries, Town
Hall etc); local press releases and adverts; publicity at Allpay outlets across the
Borough; and so on.

What savings will be made and how will they be achieved?

Full details are set out in the Cabinet report under ‘Financial Implications’, with the
proposal forecast to generate realisable savings of approx £16k per annum.

What Service improvements will be made?

Full details are set out in the Cabinet report. The overarching aim is to offer
customers greater local access to make payments in a way and at a time that suits
them and their lifestyles, while realising ongoing financial savings from service
reengineering. Implementation of the barcoding software will help facilitate this,
while significant publicity activity will raise awareness and early adoption of the
alternative payment methods available.




                                           17
How will these be measured and which PI’s will be improved and by how
much?

Success will be measurable in terms of low numbers of people attempting to make
payments at the Council Offices following the withdrawal of the counter service,
high and increasing take up of alternative payment methods, and positive impact on
collection rates.

FINANCIAL ANALYSIS

Which cost centre and subjective code will this effect?

Savings primarily realised from C600 Cash Office, with smaller savings for Revenues
printing costs

What is the accounting profile of the expenditure and income?

                     £2008/09                 £2009/10           £2010/11
Expenditure          £10k (RR)                £20k (allpay)      £20k (allpay)
                                              £25k (conversion
                                                     costs)
Savings              £36k                     £36k               £36k

Net Total            £26k                     (£9k)              £16k

Non Cashable Savings         -                        -

The Recurrent Budgetary Impact is:                    £16k+ saving per annum




                                         18
                                                    Appendix B : Summary of Consultation responses


           COMMENTS                                                                         RESPONSE
Will need to be sure that Allpay           Intention is for barcodes to be added to Council Tax daily billing from February in readiness for
barcoding is installed, fully tested and   inclusion on 2009-10 annual billing run. Barcodes will also need to be added to Agresso for Sundry
working prior to counter closure.          Debtor invoices and Charnwood Neighbourhood Housing invoices (including Lifeline, Rechargeable
                                           repairs and Bed & Breakfast accounts) prior to counter closing to accommodate those still wishing to
                                           pay by cash.
Timeline for withdrawal of counter         Variety of methods proposed to ensure maximum coverage and awareness of alternatives, to be
service will need to be well               funded from associated Reinvestment Reserve bid. These could include a “Countdown” board adjacent
publicised to ensure all Cash Office       to the Cash Office; notifications accompanying all Council Tax annual billings; direct mailings from
users (frequent and infrequent) are        Charnwood Neighbourhood Housing to all their tenants; flyers to hand out to all Cash Office and
aware.                                     Customer Service Centre users for a six week period immediately prior to counter closure; details of
                                           how / where to pay bills to accompany all Debtor invoices issued; publicity re closure and alternative
                                           payment options via local press releases (both articles and adverts); publicity via website; publicity at
                                           Allpay outlets across the Borough to advise customers that they can now pay there (and where to
                                           refer any queries); leaflets at the likes of John Storer House, the district libraries, Town Hall and so on.
Will need provision to be made for         Existing overpayment books will be replaced by barcoded bills (as proposed for Council Tax and
people repaying Benefit                    similarly for CNH Bed & Breakfast accounts).
overpayments.
Will need facility to accept payments      CBC will continue to accept postal and hand-delivered cheque payments. Customers will also be able
for Sundry Debtors / Invoices / Fines      to pay by debit or credit card (via paye.net) when with the Advisors in Customer Service Centre, or
etc.                                       over the telephone, or over the internet (at home, at work, in the library, or on the public-use
                                           terminals in the Customer Service Centre) should they prefer.
Will need to be able to bank cash          Services can total cash received and pay into the Secure Back Office area of the Cash Office in sealed
and miscellaneous income from              cash bags (contents subject to checking). Single payments accepted by Officers (i.e. first week’s rent in
‘internal’ customers or other              advance) could be similarly managed. Sealed cash bag system already successfully used by Leisure
Officers / Bailiffs etc.                   Services.




                                                                                 19
Will need ability to accept cash          Where exceptional time-critical cash payments are unavoidable, cash could be counted in a secure
payments in exceptional                   interview room under dual control with customer present and then placed in a sealed cash bag for
circumstances (i.e. to avoid imminent     immediate deposit (and processing) in Secure Back Office. Non time-critical payments should be
bailiff / debt recovery actions)          redirected to other payment channels or a barcoded bill requested as appropriate.
Will need to issue receipts as proof      Receipts (from a receipt book or electronic alternative) should always be issued when accepting cash.
of payment for cash payments              Officers should retain a copy for their records and place a copy in with the cash into the sealed cash
accepted.                                 bag so that the Secure Back Office know who to post the payment against or which suspense account
                                          to credit it to.
Will need facility for cashing petty      Will establish a back-office "till" to cater for this and process residual in-house cash-based transactions
cash cheques.                             (as referred to above). Where Services who currently hold Petty Cash no longer wish to do so there
                                          may be scope to also bring these arrangements into the Secure Back Office area .
Will need a cash receipting system        Secure Back Office and secure deposit box to be retained as part of these proposals, with office staffed
and back-office to process residual       by Customer Services Admin team. Seeking to replace ageing Spectrum cash receipting system and
payments, cheques, inter-fund             complete upgrade to Capita’s Axis Counter Receipting (ACR) system shortly after withdrawal of
transfers, payments into suspense /       counter service.
holding accounts and associated
income “housekeeping” functions.
Concern that Cash Office is not just      The Cash Office counter is currently open for 37 hours per week with the service provided from a
a method of Cash Collection but is        single location in central Loughborough which may not be accessible to all. Introduction of barcoded
part of the service to the public,        bills / invoices offers customers over 60 other locations across the Borough where they can make cash
particularly the elderly, those without   payments (Post Offices, convenience stores, Woolworths), and some 34000 locations nationwide.
bank accounts, those who prefer to        With the average PayPoint outlet open for some 101 hours per week (evenings, weekends and public
pay face to face or may struggle with     holidays as well), they also offer greater freedom of when as well as where to pay.
life skills.
                                          Traditionally many Post Offices and local shops have provided a similar community “support” function
                                          to that mentioned above, and are often better situated to do so than the Council are from central
                                          Loughborough. By making it possible to pay Council bills in cash for free at these shops, or in cash,
                                          cheque or by debit card for free at local Post Offices, billpayers can help support their local businesses
                                          and in turn be supported by them in the traditional sense of a local community store.




                                                                               20
Will need consistent messages and    Cash Office / Customer Services Admin staff to draft anticipated questions for Frequently Asked
answers to relay to customers        Questions response sheet. The usual “Have Your Say” leaflets for compliments, comments or
querying proposals with cashiers.    complaints will remain the standard conduit for recording and responding to any customer feedback. A
                                     supply will be made available from the counter in the period leading up to its closure.
How will the restructuring impact on The sizeable number of retained transactions coupled with reduced headcount across the Cash Office /
Customer Services Admin?             Customer Services Admin team overall will require some redesigning of how the team operates,
                                     particularly given the practicalities of requiring two persons in the Secure Back Office to ensure dual
                                     control of funds at all times. It may be that outside of peak post days, i.e. Tuesday to Friday, the back
                                     office is only staffed and “open” for cheque processing, to accept sealed cash-bag deposits, cash petty
                                     cash cheques, etc from 8.30am to midday and again from 3pm to 5pm. This will then free staff for
                                     lunch cover and support elsewhere in Admin prior to undertaking end-of-day procedures and
                                     preparing deposits for collection by the security company. Conversely extra staff from within the team
                                     may be needed back office to help keep on top of the postal remittance processing during the busy
                                     periods at the start and end of months, after bank holidays, and at the start of the financial year.

                                        The counter closure and restructuring of customer payment options is just part of the transformation
                                        over the next few years of the way the council works, and the flexibility and enthusiasm demonstrated
                                        by all involved with the Cash Office since its transfer into PACS in May 2006 will stand them in good
                                        stead to tackle the future challenges and changes that lie ahead.
Will need Allpay payments to be split   Allpay credits shown separately by fund on bank statements and also invoiced separately to facilitate
by fund type on bank statement.         easier reconciliation and recharging of user-services.

Cost and cashflow impact of             Possible impact, likely costs and anticipated savings quantified in Cabinet Report
extending Allpay needs to be
considered.
Will need to amend Charnwood            The level of ongoing recharges to CNH will need considering as the profile and number of CNH
Neighbourhood Housing recharges         payments processed via the Cash Office will change once the counter closes and tenants use their
and Service Level Agreements to         Allpay cards elsewhere. Discussions into CNH renting an interview room for sole use may form part
reflect changes to service provision    of any SLA and recharge renegotiations.




                                                                             21
Additional costs will be incurred by   CNH have already issued Allpay cards to all tenants not paying by direct debit. Most payees using the
CNH for reissuing any lost or          Cash Office should therefore already have Allpay cards. The cost for replacing lost cards should
misplaced Allpay cards                 therefore have been accounted for by CNH as part of the ongoing costs of utilising this collection
                                       method. The closure of the Cash Office may result in higher initial requests for replacements for lost
                                       cards, but the costs for this will likely be more than offset by the anticipated reduction in ongoing
                                       recharges noted above.
Additional costs will be incurred by   Costs of CNH stationary reprints would be incurred as part of ongoing normal business. Any
CNH for removing details of Cash       additional costs incurred over and above these will likely be more than offset by the anticipated
Office as a payment method and         reduction in ongoing recharges noted above.
reissuing associated leaflets and
stationary.
Inherent delay in Allpay payments      CNH tenants not paying by Direct Debit have all had Allpay cards for the last 18 months and could
being posted to payee’s accounts may   already pay by Allpay rather than over the counter if they so choose. The impact of the 2-working-day
impact on CNH Performance              delay in posting of Allpay payments was presumably accounted for by CNH at the time this collection
Indicators as payments made after      method was introduced.
Wednesdays will not reach the
customer account until the following   A pragmatic approach will be required. Either the tenant is advised to make payments 2 days ahead of
week and so be technically “late”      the week-end to ensure the payment is received in time or alternatively, as many tenants may only be
(payments usually posted in 2          paid Friday weekly and so only able to pay their rent Friday weekly, a common-sense view is taken that
working days, not overnight as over-   any payment received by close of play on Tuesday is assumed to have been paid (on time) the previous
the-counter payments are).             rent week. Work practices may need to be altered marginally to accommodate this. In particular,
                                       arrears letters should not be issued until 3 working days after the rent is due, so to allow for the
                                       payment potentially taking 2 working days to reach the account.




                                                                           22
              Appendix C – Current Allpay Outlets in Charnwood


Post Office and PayPoint outlets within Charnwood Borough
  Type           Location                               Address                    Post Code

  LE11

Post Office    Ashby Road SPSO         100 Ashby Road, Loughborough                LE11 3AA
Post Office    Bedford Square SPSO     50 Wards End, Loughborough                  LE11 3HB
Post Office    Forest Road SPSO        259 Forest Road, Loughborough               LE11 3HT
Post Office    Ratcliffe Road SPSO     145 Meadow Lane, Loughborough               LE11 1JX
Post Office    Shelthorpe SPSO         206 Park Road, Loughborough                 LE11 2HJ
                                       Unit 3, Gorse Covert Shopping Centre,
Post Office    Gorse Covert SPSO       Loughborough                                LE11 4RZ
Post Office    Sharpley End SPSO       19 Sharpley Road, Loughborough              LE11 4PJ
Post Office    Loughborough BO         Sparrow Hill, Loughborough                  LE11 1BX

 PayPoint      Radhas News             2 Russell Street, Loughborough              LE11 1BL
 PayPoint      H K S Motors Ltd        164 Leicester Road, Loughborough            LE11 2AQ
 PayPoint      One Stop Comm Stores    Ling Road, Loughborough                     LE11 2LW
 PayPoint      G T News                20 Charnwood Precinct, Loughborough         LE11 3XA
 PayPoint      Nisa Today Local        26-28 Hermitage Road, Loughborough          LE11 4PE
 PayPoint      Spar                    149 Old Ashby Road, Loughborough            LE11 4PQ
 PayPoint      Somerfield              8 Market Street, Loughborough               LE11 3EP
 PayPoint      Dishley Stores          8 Cordell Road, Loughborough                 LE11 5YJ
               Premier Convenience
 PayPoint      Store                   1 Brookside Road, Loughborough              LE11 3PQ

Woolworths     Big W                   1 The Rushes, Loughborough                  LE11 5BE




  LE12

Post Office    Barrow On Soar SPSO     20 High Street, Barrow On Soar              LE12 8PY
Post Office    Charnwood Road SPSO     147 Charnwood Road, Shepshed                LE12 9NL
Post Office    Hathern SPSO            12 Cross Street, Hathern                    LE12 5LB
Post Office    Mountsorrel SPSO        77 Leicester Road, Mountsorrel              LE12 7AJ
Post Office    Quorn SPSO              14 Station Road, Quorn                      LE12 8BS
Post Office    Shepshed SPSO           7 Market Place, Shepshed                    LE12 9RT
Post Office    Sileby SPSO             95 Swan Street, Sileby                      LE12 7NN
Post Office    Woodhouse Eaves SPSO    45 Maplewell Road, Woodhouse Eaves          LE12 8RG
Post Office    Wymeswold SPSO          35 Far Street, Wymeswold                    LE12 6TZ
Post Office    Walton Le Wolds SPSO    34 Loughborough Road, Walton On The Wolds   LE12 8HT

 PayPoint      Somerfield              19 High Street, Barrow upon Soar            LE12 9AN
 PayPoint      Co-Op - Midlands        111 Rothley Road, Mountsorrel                LE12 7JT
 PayPoint      Malthurst               Leicester Road, Shepshed                    LE12 9DQ
 PayPoint      Dilips General Stores   4 Market Place, Shepshed                    LE12 9RT
 PayPoint      Co-Op - Midlands        Hall Croft, Shepshed                        LE12 9AN
 PayPoint      Mountsorrel Stores      104 Rothley Road, Mountsorrel               LE12 7JX
 PayPoint      Busy Bees Supermarket   76-78 Heathcote Drive, Sileby               LE12 7ND
 PayPoint      Bradley & Son           20 Station Road, Quorn                      LE12 8BS




                                          23
   LE7

Post Office   Anstey SPSO              11 Bradgate Road, Anstey                          LE7 7AB
Post Office   Barkby SPSO              11 Main Street, Barkby                            LE7 3QG
Post Office   Cropston SPSO            48 Station Road, Cropston                         LE7 7HD
                                       Crossroad Stores, 62 Queniborough Road,
Post Office   Queniborough SPSO        Queniborough                                      LE7 3DG
Post Office   Rothley SPSO             9 Woodgate, Rothley                               LE7 7LL
Post Office   Syston SPSO              14 High Street, Syston                            LE7 1GP
Post Office   East Goscote SPSO        6 Merchants Common, East Goscote                  LE7 3XR
              Rearsby service site
Post Office   SPSO                     Rearsby Village Hall, 1851 Melton Road, Rearsby   LE7 4YS

 PayPoint     Co-Op - Midlands         High Street, Syston                               LE7 1GP
 PayPoint     Co-Op - Midlands         17-25 Cropston Road, Anstey                       LE7 7BP
 PayPoint     Bargain Booze            1110 Melton Road, Syston                          LE7 2HA
 PayPoint     Mercury News             1244 Melton Road, Syston                          LE7 2HB
 PayPoint     Local                    15 The Nook, Anstey                               LE7 7AZ
 PayPoint     Mercury News             1 Woodgate, Rothley                               LE7 7LL



   LE4

Post Office   Barkby Road SPSO         34 Barkby Road, Beeby                             LE4 9HL
Post Office   Birstall SPSO            3 Hannah Parade, Stonehill Ave, Birstall           LE4 4JE
Post Office   Greengate SPSO           3a Kingsgate Avenue, Birstall                     LE4 3HD
Post Office   Checklands SPSO          26 Lonsdale Road, Thurmaston                       LE4 8JF
Post Office   Astill Lodge SPSO        218 Astill Lodge Road, Beaumont Leys              LE4 1EF
Post Office   Beaumont Leys SPSO       25 Fletcher Mall Road, Beaumont Leys              LE4 1DG

 PayPoint     Malthurst Fuels          400 Loughborough Road, Birstall                   LE4 4BH
 PayPoint     Parkers Motor Services   714 Melton Road, Thurmaston                       LE4 8BD
 PayPoint     Bhagawathi Store         218 Astill Lodge Road, Beaumont Leys              LE4 1EF
 PayPoint     Beaumont News Ltd        224 Astill Lodge Road, Beaumont Leys              LE4 1EF
 PayPoint     Somerfield               19 Wanlip Lane, Birstall                          LE4 4JU



   LE6

Post Office   Newtown Linford SPSO     550, Bradgate Rd, Newtown Linford                 LE6 0HB




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