Decision details

Purpose of Report: Prior to the ending of the current bus shelter advertising contract with JC Decaux, the council conducted an independent market appraisal to understand the value of place based advertising across the city.

This provided several additional opportunities the council will explore at a later date.
In the meantime, the market appraisal provided sufficient information for the council to negotiate a new 15-year contract with JC Decaux, providing and maintaining bus shelters with either no advertising, paper adverts or digital adverts, and digital information panels, subject to the necessary planning consents.

In tandem, The council’s Public Health team have been working on a number of policies which promote a health food environment in York; this is in line with the city’s ‘Healthy Lives, Healthy Weight Policy’, and the ‘Local Government Declaration on Health Weight’ which the council signed in 2019.

In addition a strong body of research evidence suggests that tackling the advertising and marketing environment is a valid and necessary policy to support a healthy weight in our population. One of the areas which the council is able to directly influence is the types of adverts that are shared on council land. This has informed a refresh of the council’s advertising policy that forms part of the JC Decaux contract.

The Executive are invited to:

i.                 Note the independent market appraisal and the potential revenue opportunities from place-based advertising;

ii.                Approve the direct award of a new 15-year (plus a possible 1-year extension) bus shelter advertising and digital information board 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 Public Health in consultation with the Head of Procurement and the Director of Governance;

iii.              Approve the council’s advertising policy embedded into the bus shelter and digital information board contract.

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.