Agenda item

This reports seeks approval for the Council to negotiate a new 15-year (plus a 1-year option to extend) concession contract with its incumbent partner, J C Decaux UK Limited, to provide and maintain bus shelters with either no advertising, paper adverts or digital adverts, and digital Free-Standing Units, subject to the necessary planning consents.  The market appraisal is commercial in confidence.

Resolved:

                      i.         Noted the independent market appraisal and the potential revenue opportunities from place-based advertising:

Reason:     Understanding the potential value of advertising opportunities across the council’s estate and assets to realise maximum revenues, recognising that by doing so there will be a necessary change from analogue to digital advertising, to keep up with market demand and recognise increased revenue opportunities.

                     ii.         Approved the direct award of a new 15-year (plus a possible 1-year extension) bus shelter advertising and digital free standing unit concession contract to JC Decaux and delegate authority to negotiate and conclude the new concession contract (and the provisions of any subsequent modifications and/or extensions thereto) to the Director of Governance in consultation with the Head of Procurement and the Director of Public Health:

Reason:     The bus shelter and digital information board contract expired on 31 December 2023 and is now on a 12-month extension as per the current contract mechanism. By approving the new contract, the council will more quickly benefit from the increased revenue with the supplier being able to more quickly digitise subject to planning approvals.

75% of Out Of Home advertising revenue comes from Digital and as such Paper advertising alone is no longer sustainable for the future operational running of a Bus Shelter and Free- Standing Unit contract.

If direct award is not support, the Council would need to run a new tender awarded prior to 1 January 2025.

                    iii.        Pursuant to Rule 26.1 of the Council’s Contract Procedure Rules (“CPRs”), the Executive approved a waiver of Rules 11.4 and 11.7 of the Council’s CPRs in relation to the direct award of the new concession contract to JC Decaux UK.

Reason:     Most of the bus shelters in York are currently the property of JCDecaux, who both purchase, install and maintain them. The risks of not continuing the concession contract are set out in the report and can be summarised as, all current bus shelters would be dismantled by JCDecaux in January 2025 with new ones needed to be sourced, installed and maintained introducing a substantial additional cost to the Council in both capacity and, potentially capital expenditure and ongoing operational expenditure if a new supplier is not found through a competitive tender.

                   iv.        Approved the council’s advertising policy which will be embedded into the bus shelter, and all place-based advertising contracts with adverts displayed on council owned or operated land:

Reason:     The new advertising contract allows greater controls over the types of advertising that is displayed. The council’s advertising policy is designed to restrict high fat, salt and sugar products being displayed to residents to help promote better health and wellbeing.

The Assistant Director of Policy and Strategy introduced the report and confirmed that a confidential independent market appraisal had been undertaken and had provided the value of the advertising which worked as the basis for direct negotiation. It was confirmed that the new contract would cover bus shelters and free standing electronic advertising boards, these boards would be subject to planning approval. The Director of Public Health explained the proposal for the new advertising policy which would restrict the advertising of high fat/high sugar products. This change would he noted should assist in tackling unhealthy weight predominantly in children who are particularly affected by advertising.

The Executive Member for Finance, Performance, Major Projects, Human Rights, Equality, and Inclusion welcomed the report and noted that the estimated revenue was a conservative estimate and following officer negotiation with the provider could be higher. She confirmed that any digital advertising boards would be subject to planning and would be considered by the Council’s Access Officer to ensure accessibility.

The Executive Member for Health, Wellbeing and Adult Social Care confirmed that unhealthy weight figures for children was going in the wrong direction. She confirmed that the advertising policy was not about stopping people from doing something but how the Council uses its space and that the Executive would be led by officer advice on health. 

Resolved:

                      i.         Noted the independent market appraisal and the potential revenue opportunities from place-based advertising:

Reason:     Understanding the potential value of advertising opportunities across the council’s estate and assets to realise maximum revenues, recognising that by doing so there will be a necessary change from analogue to digital advertising, to keep up with market demand and recognise increased revenue opportunities.

                     ii.         Approved the direct award of a new 15-year (plus a possible 1-year extension) bus shelter advertising and digital free standing unit concession contract to JC Decaux and delegate authority to negotiate and conclude the new concession contract (and the provisions of any subsequent modifications and/or extensions thereto) to the Director of Governance in consultation with the Head of Procurement and the Director of Public Health:

Reason:     The bus shelter and digital information board contract expired on 31 December 2023 and is now on a 12-month extension as per the current contract mechanism. By approving the new contract, the council will more quickly benefit from the increased revenue with the supplier being able to more quickly digitise subject to planning approvals.

75% of Out Of Home advertising revenue comes from Digital and as such Paper advertising alone is no longer sustainable for the future operational running of a Bus Shelter and Free- Standing Unit contract.

If direct award is not support, the Council would need to run a new tender awarded prior to 1 January 2025.

                    iii.        Pursuant to Rule 26.1 of the Council’s Contract Procedure Rules (“CPRs”), the Executive approved a waiver of Rules 11.4 and 11.7 of the Council’s CPRs in relation to the direct award of the new concession contract to JC Decaux UK.

Reason:     Most of the bus shelters in York are currently the property of JCDecaux, who both purchase, install and maintain them. The risks of not continuing the concession contract are set out in the report and can be summarised as, all current bus shelters would be dismantled by JCDecaux in January 2025 with new ones needed to be sourced, installed and maintained introducing a substantial additional cost to the Council in both capacity and, potentially capital expenditure and ongoing operational expenditure if a new supplier is not found through a competitive tender.

                   iv.        Approved the council’s advertising policy which will be embedded into the bus shelter, and all place-based advertising contracts with adverts displayed on council owned or operated land:

Reason:     The new advertising contract allows greater controls over the types of advertising that is displayed. The council’s advertising policy is designed to restrict high fat, salt and sugar products being displayed to residents to help promote better health and wellbeing.