Nottingham City Council

1. Nottingham City Council • An employee benefits success story (well it was until 10 August 2016!)

2. Introductions • Lynn Griffin-Pearce • Resourcing and • Reward Consultant

3. Background Nottingham • Cosmopolitan city with a population of 310,000 • Two universities, world class sports facilities and a thriving retail centre • Excellent public transport system, good motorway links and nearby major airports Nottingham City Council • One of the largest employers in Nottingham-just under 7,000 employees • 54% of employees are city residents • Diverse workforce- 65% aged 40+ • 68% female • 17% from BME background

4. Background • Part of Sodexo Group • Clients ranging from 150 to 150,000 employees • Specialist voluntary benefits provider • Own integrated product range • Single platform solution • Dedicated account management approach

5. Partnership philosophy • Working in partnership since 2005 • Cost neutral solution / overall net • savings for the Council • Continuous reinvestment in • scheme growth • Innovation and new product • development

6. Award winning employee benefits June 2016 ‘Best Voluntary Benefits’ Employee Benefits Awards June 2016 ‘Benefits Team of the year’ Employee Benefits Awards July 2015 ‘Most effective rewards and benefits strategy’ HR Excellence Awards September 2015 ‘Savings and benefits team of the year’ WSB Awards & Highly Commended Sept 2016 Personnel Today Awards 2015 June 2014 ‘Best Voluntary Benefits Scheme’ Employee Benefits Awards March 2014 ‘Best Salary Sacrifice Scheme’ (holidayplus and MYtime) Pay & Benefits Awards

7. Challenging economic climate • • Financial constraints- • Central funding cuts • Limited pay rises • No budget for rewards/benefits • • Essential to embrace the challenge- • Unique attributes of salary sacrifice • Opportunity for cost neutral benefits • Creative options explored “Public service cuts deepen as councils near financial tipping point” The Guardian, May 2014 “Real austerity means public sector cuts” Telegraph, Nov 2014 “Public sector cuts worsen low pay trap” Financial Times, Oct 2014

8. Nottingham City Council aspirations • • Attract, recruit, develop and retain talent-especially young people, graduates & future apprentices to help address the aging workforce • • Improve engagement & wellbeing • • Be an employer of choice in Nottingham • • Generate corporate savings • • Support the Council’s environmental, • sustainability and social responsibility • commitments

9. Reward initiatives Managers’ Toolkit Flexible Fitness Links to Wellbeing and Working Well Programme GEM (Going the Extra Mile) Recogntion Scheme Total Reward Brochure

10. Engagement techniques Works Perks newsletter Roadshows Works Perks Champions Group Product specific materials (flyers, posters, emails)

11. Scheme savings • • Over £750,000 in savings in • 2015 • • MYtime & holidayplus schemes • alone have generated over • £640,000 in savings and over £2 • million saved in last 3 years Council savings Employee savings • Over £300k pa tax & NI savings from salary sacrifice schemes • Annual savings of around £45k on discount scheme Costs for Works Perks benefits are more than covered by salary sacrifice savings, with a proportion of these savings reinvested into scheme growth

12. New developments • • Continual reinvestment in scheme growth • • Increase employee engagement • • Generate Council savings • Learningplus re-launch • Drive take-up • Support the green agenda through travel & cycle schemes

13. A spanner in the ‘works’! • A perfect summer storm! • HMRC consultation announcement Aug • We’ve chosen to ‘pause’ affected schemes (cars, phones & learning) until outcome clear • Want to protect new members & WP brand/reputation

14. A spanner in the ‘works’! • Audit review of cars & childcare • Timing=terms & conditions review-new pay structure & set of working arrangements for colleagues

15. HRMC consultation-immediate • Message on website-blocked access to affected schemes so no new joiners • Written to those affected • HRMC queries inbox-developing FAQ’s • Modelling re potential costs used for those who have car on order-do we open up scheme again? • Review all those on contracts=expiration dates

16. HRMC consultation-future • Setting up salary sacrifice working group • Assessing impact on contracts/t&c’s - with legal • Financial modelling on potential costs from April 2017 for the 3 schemes plus impact on overall savings figure • Future comm’s planning • Appetite for learning-investigate career loans • BIK changes (from PIID to monthly)

17. Audit investigation-main issues • Impact on payslip ‘element’ builds with payroll • Ensure ir/recoverable VAT accounted for properly so HMRC receive correct amount • Systems need to be in place for NMW & payroll checks against applications • Better checking processes for all schemes • External payroll process for schools etc • Impact of sal sac on maternity pay

18. Audit investigation-main issues • Robust reconciliation system so costs are all recovered inc car fines & ET fees • Recovering from final salaries for leavers • Need for ‘spot’ checking-correct deductions • Business rate for cars-lower 7p rate • Need more resourced & skilled team to administer Works Perks

19. Further plans • • Decision as to which schemes to keep (as employees will still benefit from NI saving) • Need to ‘sell’ remaining benefits • Consider new offerings to replace ones • Continue to evolve scheme in partnership with key providers, • Financial education • Health screening • Eldercare Vouchers • Employee engagement app • Consumer analytics

20. Q & A