Agenda item

Procurement Assurance Report 2021/22

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


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 provided assurance as to the effectiveness of the Council’s procurement arrangements with detail included in the Procurement Statement appended to the report at Appendix A.


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



Members noted the following points:

·  External spend in 2021/22 was reduced by £40m on the preceding year which had been inflated as a consequence of Covid related grant and support.

·  A refresh of the Council’s Contract Procedure Rules is currently ongoing with a view to strengthen rules relating to Social Value and contract management and facilitating a more flexible and responsive approach to low value spend where there is urgency or where spend relates to goods for resale by the Council. Contract Procedure Rules training is continuing for staff.

·  In relation to compliance there had been no formal procurement challenges in the period 2021/22. On-contract spend remained strong and there was general compliance with procurement policies, with on-contract and compliant expenditure standing at 98.5% for 2021/22 financial year which was up from 95.6% in the previous year. The number of waivers of Contract Procedure Rules was down from 60 in the previous year to 37 in 2021/22.

·  The P2P Review is continuing with a focus on improving contract management and developing best contract management practice across the Council. An update on the P2P Review was attached to the submitted report at Appendix B.

·  A framework for delivering Social Value in all the Council’s procurements is now established, with a Social Value Board, Social Value Guidance for Commissioners, and Social Value support from PACS and Social Value Portal. It was noted that delivering Social Value was embedded in the Council’s higher-value procurement activity, but it was recognised that there was still work to be done to improve further. Members were informed that expenditure with local suppliers and SME’s equated to 63.8% of total expenditure in 2021/22, which was marginally down on the previous year.


In response to questions from Members the Committee were provided with the following information:


In relation to value engineering and inflationary pressures:

·  All contracts are monitored, should the supplier need to deviate from the contract they are required to submit a change request. This request would have to be agreed. If a supplier did not deliver to the specification bid for then the contract would not be signed off and payment not made.

·  The Council will challenge an inflation uplift request to ensure that the uplift is appropriate, fair and reasonable.

·  Members were of the view that any inflation uplifts need to be agreed on an equitable basis that reduces the Council’s vulnerability. Members wanted to see assurance that this is built into the process. The Chair was of the view that a piece of work was required around assurance for the Committee.

·  Members were advised that inflation settlements were agreed by the directorate responsible for the contract. This is subject to the proper decision making process.


In relation to social value:

·  The Council uses an external provider platform to evaluate and monitor social value. These arrangements are due to expire in March 2023. The Council is currently liaising with other authorities in the region to seek to find a better fit for the public sector and to have a more uniformed approach across the region. Initial timescales for the first stage of this piece of work to be completed are end of October.

·  The percentage put towards social value will also be considered as part of this review.

·  The table at 3.12.3 of Appendix A was part of feedback – the table aggregates proxy values ascribed to various social value provided under Council contracts. The Council is trying to move towards more meaningful information in relation to social value outcomes (e.g. actual figures on job creation and number of volunteer hours).

·  Members noted the definition of local business was that the office with which the Council deals is based in Leeds.

·  Members were advised that the Council works with the voluntary sector and businesses in Leeds to help them be in a position to bid for Council tenders.


In relation to other matters:

·  It was noted that the Council considers that we would be able to comply with the Procurement Bill. Some changes were noted including more flexibility in choosing own procurement processes so long as they are fair and transparent. However, it was also noted that extra administration in the form of reporting and transparency would be required.

·  It was acknowledged that there are risks in relation to the Council’s procurement processes in addition to the key risk of challenge noted in the report. However, the risk identified relates to  the focus in the report to provide assurance to the Committee that procurement activity was being undertaken properly and effectively.  Members were advised that risks in relation to individual procurements are carried by the directorates on their risk registers.

·  A series of different reviews impacting procurement have been brought together under Appendix B action plan. The aim of the reviews is to make the procurement process as efficient as possible. One main aim is to secure a system which is integrated with other Council systems, this would make the P2P process much more effective, efficient and save resources.

·  Members were advised that the principles of the Fair Tax Declaration accord with the Council’s procurement strategy, and the Council does look to comply with this. The council does vet and assess all tenderers, however this is in the form of a desktop exercise. To investigate off-shore structures would be difficult as they are designed to be complex, it would also take resources and skills which the Council does not have. It was noted that if a contractor was found to be moving tax, the Council would look to exercise any rights under the contract or under procurement regulations. The Chair suggested this was something that may need further discussion either with this Committee or a Scrutiny Board.

·  Members noted that the use of waivers should be low, as these should only be used in exceptional circumstances. It was the view that the reduction in number of waivers was due to training of staff by PACS to understand the flexibility in the CPR’s.



a)  Consider and note the assurances provided in this report from the review, assessment and ongoing monitoring carried out

b)  Note that the Head of Procurement and Commercial Services has reached the opinion procurement policies and practices are up to date, fit for purpose and effectively communicated; and

c)  Note the ongoing P2P Review.


Cllr Downes left the meeting at 15:30 during this item.



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