Agenda item

This report provides an update in respect of progress with all internal audit recommendations relating to Strategic Procurement, the current position with the implementation of the changes to ensure compliance with the Procurement Act 2023, which came effective on 24 February 2025, progress on the implementation of the Procurement Modernisation Plan and the newly created Commissioning Modernisation Plan.

Ms Taryn Eves, Corporate Director of Finance and Resources and Mr Barry Phelps, Chief Procurement Officer, introduced the report.

At this point in the proceedings, the meeting agreed to suspend standing order 18 in order to conclude the meeting.

The meeting heard:

·         A waiver was essentially a request to not follow the contract standing orders that related to the procurements. For instance, a case where only quote would be sought instead of three as there was only one supplier that could deliver the service being sought.

·         Care and Digital Services were exempt from the £25,000 spend limit because there were commissioners and a brokerage team in place to put in place care packages with the providers. The service was in the process of redesigning some of their facilities as and it was felt that it was not appropriate to disrupt this at that particular time. As part of the commissioning modernisation program, it would be seen if those other areas would come into strategic procurement. In terms of Digital Services, the exemption was a temporary one for six months. They had about 800 contracts and that was quite a lot to bring into Strategic Procurement, but they had the in-depth knowledge of those particular contracts and the arrangements that Strategic Procurement did not have within strategic procurement. Many of the contracts were on a smaller scale. The report outlined the scale of the work and how much that could not be done in one attempt. There had been £9.2 million in savings. The Council’s largest element of spend was on third party contract spend. It was important to start with commissioning. It was also important to have corporate health compliance data. This was also a measure of success. There had been a high rejection rate in terms of the waivers due to heavy scrutiny. 

·         It would be useful to be more deliberate around the benefits. Better insights into the data would improve data governance overall. Some of the best practice could easily be taken into other areas of the Council. There needed to be better contract management and these principles could also be related to other contracts that were income generating. In relation to the digital services spend, this was a general area where overspend could happen and this needed to be monitored closely.

·         Finance and Resources could be a bit deceiving in terms of what services were included. It included finance, audit and procurement, but also included commercial property, corporate landlord model, the capital program delivery and the new homes program. Most of the big contracts related to construction.

·         The Cabinet Office required the Council to publish all pipelines of contracts above £2,000,000. A link to the hosting website would be sent around to the Committee. Procurements involving waivers were also published on the website, but was dependent upon the type of waiver which was why officers needed training for procurement software. A direct award above a certain amount meant an obligation to publish. There was also an obligation to publish variations to contracts extensions to contracts when they went beyond a certain threshold. But this was complex. The threshold fluctuated depending upon the type of service, the nature of the variation and other such matters. Very few would be published because most of them would fall within certain parameters laid out in the regulations. Whilst there may appear to be a lot of waivers, it had dramatically reduced from where it was previously within the Council last year. Since Strategic Procurement had taken more control above procurements over £25,000, there had been more engagement with the services around ensuring that there was compliance and fewer waivers. A typical example would be a service having forgotten about extending a contract and a route would be sought to maintain the contract within a compliant framework and that may involve the use of a waiver.

·         Variations were monitored within the Commissioning Board. Monitoring was also done on spend with single suppliers and multiple small contracts. There appeared to be the right level of internal governance and oversight now and there were consequences of non-compliance.

·         Training was very important and it would help the Council to apply good practices in place to produce better quality of outcomes. If the staff knowledge was not being built, it would lead to inadequate data. Training would also build a good culture and good practice.

·         A contract management toolkit had been introduced and it assigned a risk profile to each contract. These were classified as gold, silver, bronze or even platinum. This was to follow what central government outlined in terms of best practice and the training that was associated with that was free and that and was part of the commissioning modernisation program. Some staff had undertaken it, but it was not yet subject to general release it was still being reviewed subject to other policies and processes.

·         In relation to risk being managed. Capital programs had a fairly robust governance process, but ultimately it was up to the services to ensure that they were properly engaging in contract management. Having adequate technology in place would enable the Council to monitor this.

·         The financial standing of the suppliers was monitored. There were alerts if there was a change in profile. If a contract was in ‘high risk’ then, there should be relevant measures in place to try and protect the Council against failure.

RESOLVED: To note and discuss the information contained in the report.