Agenda item

The City Barrister & Head of Standards submits a report, as required under the Council’s Contract Procedure Rules, to the Audit and Risk Committee to inform them of the activity of the procurement function of the Council (which comprises three specialist procurement teams: Procurement Services, ICT Procurement and ASC Procurement) over the previous financial year and evidence compliance with the requirements of the Contract Procedure Rules.

The Committee is recommended to note the contents of the report and make any comments to the City Barrister & Head of Standards.

The City Barrister & Head of Standards submitted a report, as required under the Council’s Contract Procedure Rules, to the Audit and Risk Committee to inform them of the activity of the procurement function of the Council (which comprises three specialist procurement teams: Procurement Services, ICT Procurement and ASC Procurement) over the previous financial year and evidence compliance with the requirements of the Contract Procedure Rules.

The Committee is recommended to note the contents of the report and make any comments to the City Barrister & Head of Standards.

The Deputy Director of Finance presented the report and made the following points:

·         The report updated on what was required under Contract Procedure Rules.

·         For information Members were asked to note the Public Contracts Regulations (PCR) thresholds updated in December 2021 were now inclusive of VAT, which had caused council internal procedures to be amended, and officers to be reminded of the new thresholds to take the VAT inclusive costs for checking.

·         Attention was drawn to the Procurement Bill going through Parliament, to consolidate national procurement regulations following Brexit into UK legislation. Contracting authorities would now have to consider specific national priority outcomes alongside local priorities, including creating new businesses, new jobs and new skills, tackling climate change and reducing waste, and improving supplier diversity, innovation and resilience. It would also give the authority more scope to consider local priorities as well with the added flexibility it had to target procurement activity.

·         More information would be required to be published on contacts and contract management as a result. There was now a page on the government website to which local authorities and government had to upload certain contracts, providing a central portal for upcoming procurement so that anyone could check the web page for information rather than going round individual councils, departments and websites.

·         Members were asked to note the table at Point 3.7 in the report which listed the number of completed procurements.

·         The Council’s Open Data website had information on planned procurements for coming years and was kept up to date, with an ongoing exercise currently being undertaken to ensure that directors kept procurement information regularly updated.

·         It was noted that normal procurement procedures were suspended during the pandemic with the Council using Exemptions to allow for PPE to be bought outside of normal procurement procedures at the start of the pandemic to respond to the situation. Various contracts had also been extended as they could not realistically be re-tendered or renewed during the pandemic. Internal audit had looked to ensure people were complying with procurement procedures.

·         The council had been successful in getting three major capital schemes approved by government under levelling up. The Council were now required to procure the infrastructure works for the schemes.

·         The Committee had previously discussed social value over recent years through the Council’s processes, for example apprenticeships, benefit for the local community. There was more potential and discussion to be had, and the team had been asked to focus on how the council could embed social value in procurement.

·         Also referenced was the living wage, and it was noted the Council was an operator under the Living Wage Foundation’s Licence Agreement for its own staff, certain agency staff and some contracts, implementing the living wage where it could. It was acknowledged that it would like to implement the living wage in social care but costs were prohibitive. The Living Wage Foundation had announced a new living wage with an increase of 10%, which would be implemented from November 2022. The Local Government pay award currently on the table would largely deal with that, with two of the lowest grades still requiring a top up.

·         Waivers at 3.18 in the report provided information on where departments had asked for usual rules to be waivered, which was a proper governance procedure.

Members were then given the opportunity ask questions and the following responses were given:

·         It was appreciated that procurement had gone tough times due to Covid, and clarity was sought that waivers were where existing contracts had been automatically extended for continuity reasons. Members asked under ‘Reason for Waiver’ what waivers came under the category of ‘Other’ which was showing as 33 for 2020/21. Members were informed that largely the reasons were Covid-related. As an example, the SALIX Decarbonisation scheme was noted, which was a government led scheme around carbon reduction energy efficiency measures. A lot of work had been undertaken in schools and other council buildings, such as more efficient heating, solar panels, double glazing and air source heat pumps. The government had wanted the schemes delivering quickly which in turn required procurement to be undertaken more quickly than usual.

·         In addition, some of the schemes already had preferred suppliers, which allowed procurement to be addressed more quickly under the circumstances. Members asked how the authority compared with others. Officers would provide information to Members following the meeting.

·         Members asked that in relation to the number of procurements as outlined at 3.7 compared to the table at 3.18 in the report, was the value a relatively small number compared to the value of procurements. The Director of Finance would look at the figures in more detail and provide a response to Members following the meeting.

·         Members referenced the Procurement Bill, and recalled a strong point being made in years past when the procurement policy was being put together for the authority to favour local suppliers where it could. It was asked that when looking at bids from established local company against a start-up with no track record, were the authority going to put together a local policy for looking at the ratio of how it would prefer a new start-up to something that had a track record. The starting up of new businesses should not be discouraged, but there was an element of risk. The Deputy Director of Finance responded that it was relatively new legislation and there would need to be a process established. It was further noted it could also depend on the type of supplier and how critical it would be if they failed to deliver. The question would be taken back to officers for a response to Members.

·         Members noted that improving supplier diversity was important under equal opportunities. What has been said in the past was people had not had the opportunity to get a foot on the ladder, but the new process would give those business an opportunity.

·         It was questioned why, under Implications under Section Four in the report, it did not include environmental reporting through the Council’s procurement processes on third party carbon emissions. The Deputy Director of Finance would take the question back to officers for a response in writing to Members.

Councillor Valand left the meeting at 18:28

The Chair noted the report and the comments that would be taken to officers for a written response to Members.

RESOLVED:

That:

1.    The report be noted.

2.    A written response on how the authority compared to others with regards to waivers be provided to Members.

3.    Members to be provided with a written response on whether the value of waivers was a relatively small number compared to the number of the value of procurements.

4.    The question on whether local policy would favour new start-ups compared to long established companies with a proven track record to be responded to in writing to Members.

5.    Information was requested in writing by Members on how the Council’s procurement processes were affected by third party carbon emissions.