How to buy: outsource car parking services for an easier ride
Running a trust car park that keeps patients, staff and coffers happy can seem an impossible task, but success is all in the outsourcing, writes Alison Moore
Car parking is one of the most sensitive subjects for many trusts – and one where they are often under fire from patients, visitors and staff.
Contracting out services to a car parking management company has enabled many trusts to concentrate on their core business but the risk to the reputation of the organisation is such that trusts often want to keep control of key elements of this and create a system which, although no one likes paying for parking, feels “fair.” Good procurement can help them in this.
Trusts should start by identifying what the problem is they want to solve. Obviously, generating income from car park charges is important for them; although few want to squeeze the last penny out of the charges and fines from their car parks, they do want car parking to pay for itself and not eat into other budgets.
“Paying for itself” can mean not just the cost of an attendant but also security staff, equipment and improvements.
Often, issues concern controlling the use of car parks – especially if they are close to stations or shopping centres – such as ensuring people can park when they need to and preventing parking outside designated areas (to avoid blocking ambulances).
In Plymouth, the end of an existing contract was an opportunity to look at innovative ways of solving problems such as separating staff and public parking and introducing “pay on foot”.
Bringing in a company can also be a way to facilitate investment in car parking. This investment can range from improving signage to multi-million pound “design, build and operate” deals on new car parks.
As NHS capital budgets have come under pressure, this aspect of securing investment has become more prominent: trusts can effectively meet these costs out of revenue as the car parking company is paid a larger management fee or takes a greater share of proceeds to pay back this investment. Ultimately, of course, this is likely to be reflected in higher costs for parking.
Vinci Park commercial director Phillip Herring says there has been an increase in enquiries for design and build car parks, but procurement of these can be lengthy.
Grahame Rose, development director at CP Plus, says that pay on exit technology is something more trusts are looking for: it substantially reduces the need for fines for overstaying and thereby avoids a key issue for many hospital outpatients – they cannot be certain how long they will stay when they buy a ticket. Automatic number plate recognition technology may offer an alternative when barriers are not feasible. And some operators believe pay by mobile phone will be important in the future.
But some of this equipment is expensive, especially when hospitals have a large number of exits: CP Plus is putting in a barrierless system for one trust which “runs well into six figures”. Car park operators who are buying it regularly can often get this equipment cheaper than a hospital.
One issue for trusts in bringing in outside operators is the potential loss of control. Usually this can be addressed through the contract, with details such as parking charges, concessions and free parking, parking enforcement fines and the appeal process all retained within the trust’s control. This may be different in private finance initiative cases where the PFI partner retains the running of car parks.
Generally, most trusts do not want a punitive enforcement policy and want to set criteria for waiving them, while still wanting the company to administer the fines system. They also want to ensure certain groups are protected from the potentially high costs of parking – parents of children in hospital and those who need to visit the hospital regularly, for example. Historically, disabled people have been able to park for free although some hospitals now charge.
If a trust has a Safer Parking award (which reflects high standards around security and running of car parks) then it may want to stipulate that a new operator retains that. Trusts may also want to specify that tenders meet the obligations of the hospital parking charter – drawn up between the NHS Confederation and the British Parking Association – which sets out a framework for a fair system.
The length of contracts varies – companies that are putting in new equipment will want to ensure they get their money back but trusts may want to allow for any technological changes which emerge to be adopted within a reasonable time and so may not want overlong contracts.
Where there is any form of “profit share”, contracts will need to specify timing of reviews of charging and how they will be changed (for example, by reference to other local car parks). Some contracts will specify no changes for several years, which will obviously affect companies’ projections of income flow.
Contracts for car parking management tend not to follow a format and will reflect the particular circumstances each trust is in. Mr Herring says dialogue during the procurement process is valuable and can help him and his competitors produce a tailored solution for an individual organisation.
In Plymouth, a “competitive dialogue” process was used under which the original tender laid down what the trust wanted to achieve but it then entered into discussions with two shortlisted bidders about the details of how this could be delivered. Director of site services Lesley Darke says this two-way discussion enabled a solution tailored to the trust’s particular needs to emerge.
“At the end of the process we had absolutely what we wanted,” she says. “Our specification was outcome based.”
‘No cost’ tender
The process also allowed some imaginative solutions to emerge which the trust had not thought of. The final approach included staff being allowed to park in different car parks at different times of the day, reflecting shifting demand.
Pennine Acute Hospitals Trust has recently tendered for parking enforcement services at its four main hospital sites. It had tried to enforce regulations itself but found it difficult and time-consuming. It also wanted signage improved to encourage people to park better and make it easier for them to find their way around the sites (one has 27 parking areas).
It offered a “no cost” tender under which the successful company would keep revenue from parking fines up to a certain limit (anything over this is split with the trust) and would invest in better signage and information to help people find parking slots.
The trust – which has also been consulting on parking policies with its staff and public – wrote into the tender that it would control the appeal process and criteria, although the winning company would be responsible for administering it.
The tender was advertised and attracted a large number of initial enquiries, although numbers dwindled when they realised the complexity of the sites and the limitations on the contract. Eventually the trust accepted one bidder but also agreed that it would discuss other possibilities – such as additional parking areas – with the contractor as the five-year contract progressed.
Barry Waterhouse, travel and access manager, believes it is a good deal for the trust, which will get the initial investment in signage it wanted while the contractor will take the risk of an uncertain revenue stream (better signage could mean fewer parking fines).
At University Hospitals Bristol Foundation Trust, car parking has remained in-house, with the exception of enforcement. Bob Pepper, director of facilities and estates, says the trust used to run this itself and would clamp some cars. But it decided this was inappropriate and has moved to an enforcement company which issues parking notices and runs the fine system. Specialist companies are usually able to get information about cars’ ownership from the DVLA to enable them to pursue offenders – something trusts are not usually equipped to do.
Like many trusts, Bristol appreciates being “at arm’s length” from parking enforcement but retains powers over the appeal system.
Mr Pepper recommends trusts think carefully about how the income for the enforcement company is structured. At Bristol, it gets a guaranteed amount which covers the running costs of the service and a share of income from fines above that – an arrangement which he says reduces the incentive for companies to be “over zealous” about fining people.
“Don’t set it up in a way where there is an incentive for the company to maximise fines,” he says. The trust would not feel comfortable with a situation where a company’s income relied solely on maximising fines.
The trust is also planning to move to credit card payment and pay-on-exit for suitable car parks which it is funding itself.
Going out to tender is a drawn-out process as many hospital car parking contracts will be above the OJEU limit and will therefore require a full advertisement and evaluation process. This means that trusts need to start thinking about their requirements at least six months and possibly a year before an existing contract expires.
Allowing sufficient time is particularly important if a trust is contemplating significant changes, where it may want to enter into a dialogue with staff, patients and visitors to build acceptability around them. In Plymouth, the proposals went between the local authority’s health overview and scrutiny committee and the principles of the changes were also widely discussed with staff and patients before a final decision was made.
Paying for car parking is never going to be popular, but trusts can make it more acceptable by addressing contentious issues through the procurement process.
Outsourcing: an overview
A trust can outsource all or just a part of its car parking service: from the building and operation of a new multi-storey to procuring “help” to recover parking fines.
Trusts are not tied to any one structure or contractual format and contracts need to be procured and negotiated on a case-by-case basis, and will differ depending on scale, extent of services and how the services are to be financed.
Car park services are most likely to be “Part A” services and the costs of outsourcing will probably exceed the procurement thresholds and require a full procurement exercise.
Accordingly, where the estimated lifetime value of the contract exceeds the relevant financial threshold, the trust will need to advertise the procurement opportunity through OJEU and adopt a procedure as
prescribed under procurement legislation.
Before setting off on a procurement exercise, a trust should develop a clear strategy and comprehensive output specifications.
Key contractual considerations tend to include: allocation of spaces; maintenance of infrastructure and signage; supply and maintenance of payment machines and barrier technology; parking tariffs and capacity of a trust to control or set parking tariffs; security; and the ability to offer different means of payment to users.
Trusts may contemplate adopting revenue sharing arrangements or consider whether there is third party income potential from non-NHS users, but should also bear in mind a series of regulatory considerations (from wheel clamping to generation of income).
One trust allowed free parking for the first twenty minutes and provided reduced tariffs for long term inpatients and their visitors. Not surprisingly, it had high satisfaction levels from its car park users, but not all trusts can afford to be so generous, and the outsourcing of car park services should be negotiated by each trust depending on its specific needs.
David Gibson is senior lawyer, commercial, at Capsticks Solicitors LLP