Agenda item

To consider a report by the Head of Procurement and Commercial Services which presents the Annual Report on the Council’s procurement function, and provides assurances that the Council’s arrangements are up to date, fit for purpose, effectively communicated and routinely complied with.

The report requests Members to consider the ongoing work to review the Council’s entire “procure to payment” (the P2P Review) processes in order maintain effective procurement support, including appropriate training and guidance, and efficient systems and processes.

(Report attached)

The Head of Procurement and Commercial Services submitted a report which presented the Annual Report on the Council’s procurement function and provided assurances that the Council’s arrangements were up to date, fit for purpose, effectively communicated and routinely complied with.

The report requested Members to consider the ongoing work to review the Council’s entire

“procure to payment” (the P2P Review) processes in order maintain effective procurement support, including appropriate training and guidance, and efficient systems and processes.

Addressing the report, the Head of Procurement and Commercial Services said the report sought to provide assurance as to the effectiveness of the Council’s procurement arrangements. Members noted:

·  Each Directorate was accountable for the procurements that they need in order to secure the outcomes they are responsible for. Procurement and Commercial Services was accountable for provision of professional support to complex procurement activity.

·  External spend in 2020/21 was £992,465,919 (increased on typical spend levels as a consequence of Covid-related grant funding).

·  A refresh of the Council’s Contract Procedure Rules (CPRs) was implemented in 2020/21, further strengthening procurement controls, incorporating Social Value requirements and changing the evaluation emphasis to provide greater focus on price. CPR training for Council staff continues, including an online interactive tool and guidance document on Insite.

Regarding compliance:

·  There had been no formal procurement challenges in the period to which this report relates

·  On-contract spend remained strong and there was general compliance with procurement policies, with on-contract and compliant expenditure standing at 96.42% for the 2020/21financial year (up from 95.6% in the previous year)

·  The number of waivers of CPRs in 2020/21 was 60 (down from 79 in the previous year).

·  In addition, a “peer review” facilitated by the Local Government (the LGA Peer Review) was expected to confirm that the levels of the Council’s procurement compliance represent an “an outstanding achievement that demonstrates efforts by the council to ensure good governance outstanding achievement” (the final report was yet to be received).

·  A framework for delivering Social Value in all the Council’s procurements was now established, with a Social Value Board, Social Value Guidance for Commissioners, and Social Value support from PACS and Social Value Portal. Work was underway to embed Social Value in all the Council’s procurement activity, and expenditure with local suppliers and SME’s equated to 65.88% of total expenditure in 2020/21 (up from 64.64% in the previous year).

·  The ongoing P2P Review (including the ongoing analysis of progress toward achieving the Procurement Strategy KPIs) would look to further improve the efficiency and effectiveness of the Council’s procurement. In addition, the LGA Peer Review was anticipated to propose that resource should focus on delivering greater strategic value from procurement activity.

Referring to Covid-19, Members asked if the National procurement of Personal Protective Equipment (PPE) had had any impact on the City Council’s ability to precure PPE or if the City Council had obtained PPE from these national contracts.

Members were informed that some dedicated resource was required to oversee procurement of additional PPE, but a PPE Framework was in place, good relationships had already been established with PPE suppliers on the framework allowing for increased utilisation, and other suppliers who had previously been unsuccessful in securing a procurement contract were utilised to provide additional resource.

Members asked did the Council incur additional expenditure as a consequence of National PPE procurement

The Head of Procurement and Commercial Services said PPE was purchased for our own needs from the Council’s own PPE framework arrangements, and the Council did not need to utilise National contracts.

Referring to Social Value and the figures provided on page 25 of the submitted report, the social value dashboard, Members suggested it was difficult to distinguish if these figure were good, bad or indifferent, could further clarification be provided.

Members were informed that social value was a work in progress and there was a lot of work required to embed social value across the Council and to be taken into account across all procurement activity. Social value in contracts had only gone through the social value portal for a relatively short period and this was reflected in the figures provided, but the aggregate contract value was currently around £10m which was not an insignificant sum. The intention was to continue with dashboard reporting and over time to establish some foundation levels as KPIs with a view to improving year on year.

Members sought further information about the Social Value Portal (SVP).

Members were informed that the Social Value Portal was a separate company with the purpose of embedding Social Value into procurement. SVP had developed a set of Leeds-specific set of Social Value themes, outcomes and measures which would help achieve the Leeds social value priorities. (Currently 3 year contract £7.5k per year)

Members referred to the Brexit/ Procurement Regulation Review, page 31, and asked if the Council’s submission on the Green Paper Consultation could be circulated to Members

The Head of Procurement and Commercial Services confirmed the requested information would be shared with Members

It was reported that in terms of social value (reported annually) the annual spend with local suppliers or SME’s was 65.88% for this year

Members asked if comparisons/ benchmarking with other local authorities was available.

Members were informed the requested details would be supplied

Clarification was sought as to how social value was compatible with price first

Members were advised that social value should not impact on price, social value should not be included as an extra cost.

Members welcomed the recent LGA peer review and asked if any Members were involved in overseeing the review.

It was confirmed the Leader of Council and the previous Chair to this Committee were involved in the review. It was reported an Action Plan was currently been prepared and would come back to this Committee (Autumn 2021)

Referring to paragraphs 2.6 and 4.12 of the submitted report and the opportunity to improve connectivity between the Procurement and Commercial Service and colleagues undertaking procurement activity within directorates.  Members queried if this would form part of the focus in the proposed action plan.

Members were informed that the proposal to improve connectivity between the Procurement and Commercial Service would be included in the action plan

Reference was also made to paragraph 3 of the report which suggested resource should focus on delivering greater strategic value from procurement.  Members queried what assurances could be provided to ensure this re-focussing would not detract from the culture of compliance.

Members were informed that a team of 8 officers provide procurement support in relation to compliance. The majority of this focus on compliance would continue, but with 2-3 FTE from this team focusing on improving social value through procurement activity and focusing on spend.

Members requested if a procurement update could be considered within the Work Programme

Members were supportive of the suggestion

The Chair thanked officers for their attendance and contributions.

RESOLVED –

(i)  To note the assurances provided in the submitted report including the review, assessment and on-going monitoring carried out

(ii)  To note that the Head of Procurement and Commercial Services had reached the opinion that procurement policies and practices were up to date, fit for purpose, and effectively communicated

(iii)  To note the ongoing P2P review, the ongoing analysis of progress toward achieving the Procurement Strategy KPIs and the anticipated proposal from the LGA Peer Review to focus resource on delivering greater strategic value from procurement activity

(iv)  That a further report would be brought back to Committee with more detail in respect of (iii) above.