To consider a report from the Director of Resources providing an update on the Council’s Procurement and Commercial Services. This follows consideration in previous municipal years and focuses on social value in procurement, effective contract management, the potential for savings and delivery of value for money, performance and the board’s interest in payment of corporation tax.
The report of the Director of Resources provided an update as to progress made in relation to the P2P Review and delivering the P2P Action Plan. A copy of the P2P Action Plan and summary of progress to date in relation to all elements was attached at Appendix 1 of the submitted report. The report also brought to Members’ attention the work underway to develop a Council-wide best practice approach to contract management, proposals to further develop opportunities for delivery of additional social value in procurement and examples of savings/avoided costs in relation to external spend.
In attendance for this item were:
· Neil Evans - Director of Resources
· Cllr Coupar - Executive Member for Resources
· Mariana Pexton - Chief Officer Strategy and Improvement
· Kieron Dennett - Head of Procurement and Commercial Services
· Tony Bailey - Group Procurement Manager
The Head of procurement and Commercial Services presented this report which provided an update on the progress to delivery of the P2P Action Plan. The Action Plan was developed as part of the Core Transformation Programme which is looking at improving efficiencies across all the Councils processes and systems related to the procurement lifecycle.
It was noted that there was a summary in the appendix of all P2P actions and the progress made.
The report highlighted the progress made on the best council approach to contract management, proposals to embed and maximise additional social value through procurement, there was also some examples where services had delivered savings in the last twelve months. The report also provided information on the Fair Tax Mark and the Fair Tax Declaration.
In response to questions from Members the Scrutiny Board were provided with the following information:
· Two areas of flexibility in the council’s procurement arrangements which would be beneficial to CEL:
1. Where trading commercially to react quickly to purchase goods there was a flexibility built into the Contract Procedure Rules when they were reviewed in September 2022.
2. A meeting later in the week will discuss CEL business with SME’s and how the Council can use them more flexibly. It was noted that the Contract Procedure Rules were in place to ensure delivering best value and that the Council has good governance and control in place, but that there is a balance in low value spend to allow for the use of SME’s and more work was required in this area.
· In relation to contract management and delivering additional training to staff. It was noted there was a contract management module which had been developed to assist in managing contracts over £10,000 which are registered on the Council procurement platform. This had only been introduced in the last year and there was a need to train people in its use and the benefits of the system. The Board were advised that those who were using the module had given positive feedback.
· The Governance and control through the Contract Procedure Rules provides best practice which had been noted by the LGA Peer Review on procurement a few years ago. It was believed that savings are delivered through procurement, however it was difficult to evidence through the data that the Council has currently. The performance information and invoicing systems need tying together to provide more accurate information. It is proposed that through the Core Business Transformation Programme procurement processes and systems will be improved and be fit for purpose as opposed to the current situation where the existing finance system is approaching ‘end of life’. Members were informed that there is currently over 400 people involved in contract management looking at different levels of contracts and there was a need for training for the different levels and this was currently taking place. Members were also informed that steps were being taken to ensure that local partnerships embed best practice. The Management Contract Module is the best tool to take this forward. The Board was of the view that contract management needs to be robust to deliver value for money in the context of the ongoing financial challenge. Enhanced training of staff who manage contracts was seen as a driver for that.
· For contracts under £100,000 there is approximately £4-5 million of spend annually. There are 162 suppliers with whom the Council spend £1 million pounds or more and there was a need to ensure that the Council was getting value for money for these services which is a priority. There was a need for user friendly systems and processes so that services can manage spend.
· In relation to the Social Value Engine and how it would be benchmarked an explanation was provided in how contracts over £100k would be measured using Themes, Outcomes and Measures (TOM’s) criteria. It was advised that this Board or any successor Board should keep this on its work programme.
· Members were advised that training for those involved in procurement was not mandatory. However, there was training available including a foundation level module which required an exam at the end of it. It was noted that this training was free, and everyone involved in contract management was encouraged to undertake it. Members were informed that the eighteen people mentioned within the report and covered in the chart were on professional training for procurement management which aimed to give a professional qualification at the end. This was aimed at staff who had significant involvement with contract management, and more were due to start the training in March. The Board requested that it be kept up to date on progress of training. Members also requested the number of staff who had gained a professional qualification in contract management to be circulated to the Board both in terms of those who are ‘professional’ contract managers and those staff who manage contracts as well as carrying out other roles.
· Members were advised that the Council are unable at present to use the Fair Tax Mark in procurement and the reasons were set out in the report. The Chair believed there were ways around the challenges to using some kind of fair tax check and it was noted that discussions on this would continue given the interest in it from this Board and more widely in the Council.
Following consideration of Appendix 5 to the submitted report designated as being exempt from publication under the provisions of Access to Information Procedure Rule 10.4(3), which was considered in private at the conclusion of the public part of the meeting, it was
RESOLVED - To:
1. Note the contents of this report; and
2. Endorse the work underway to develop a Council-wide best practice approach to contract management.