Agenda item

(A report by Sam Knowles, Assistant Director – Finance)

Noting apologies for the Assistant Director – Finance who was scheduled to present the report, the Scrutiny and Procurement Officer, together with the Head of Procurement presented the report supported by the Portfolio Holder.

Committee were advised that the report sought their consideration of the proposed transfer of procurement and contract services into an alternative provider to supply a single streamlined approach to procurement across the Partnership.

Members were advised that each Council in the South & East Lincolnshire Councils Partnership currently operated a different model with regard to its procurement function.  ELDC had a part time procurement officer and some ad-hoc external support.  BBC had an external support contract in place for larger procurement works through Kings Lynn and West Norfolk and SHDC had procurement support provided by Breckland Council.  Coordinating the mixed approach was a part time procurement officer, seconded from ELDC initially, but working across the Partnership until 31^st March 2023.

With the start of the Partnership, it became clear that a single solution for procurement would be needed – both in terms of the ability to deliver projects for all three councils using one process and in terms of the actual processes involved in procuring goods and services. In addition to the above, some Partner Councils had recently received audit recommendations to update policies and processes and to look to align with the rest of the S&ELCP.  Whilst progress had already been made in these areas, a PSPS Procurement & Contracts service would be able to manage those processes together to deliver the required benefits.

In order to facilitate the transfer, there would be a termination of the current arrangements. 

• ELDC – cancellation of ProContract as of 26th January 2023, plus ending of secondment of Procurement Officer as of 31st March 2023;
• SHDC – termination of contract with Breckland – mutually agreed for 31^st March 2023;
• BBC – ending of agreement with KLWN – mutually agreed for 31^st March 2023.

A business case had been received from PSPS which in summary stated that they would develop an in-house Procurement and Contracts service to deliver a single, aligned Procurement service to their 3 Client Councils as well as to PSPS; would ensure a more proactive and compliant procurement function; would support good governance with the expenditure of public funds; would seek efficiencies and alignment of expenditure; would provide best practice procurement advice and would actively support and deal with contract management.

PSPS had indicated that there would be the need for an initial one-off investment to enable implementation of the service, followed by further investment on a revenue basis. Those costs were already part of the budget provision for procurement in this year’s budget papers. Full details can be found at Appendix A to the report.

PSPS had currently not factored in any savings target or income generation into their business case, however it was anticipated that the contract management function within the service was likely to identify and deliver savings through both alignment and joint procurement opportunities. This would be routinely monitored and reported accordingly.

The proposal was for PSPS to continue to deliver all the procurement and contract functions that currently exist within the 3 Councils, whilst adding new functions, to include developing and updating procurement policy, strategy, and plans;  delivering value for money from procurement activity; managing and maintaining all Contract Registers, including monitoring review dates to ensure sufficient time is given to assess procurement options; providing spend analysis including looking to seek potential efficiencies through joint procurement activity, as well as challenging non-compliant spend; providing a detailed contract handover to ‘Contract Managers’ including a Contract Management Plan, as well as being on hand to actively support in the management of contracts, including reviewing performance, attending Contract Review meetings, and providing draft agendas for meetings and training, development, and support for staff including specification writing, tender development, evaluation, and contract management.

Following the formation of the South & East Lincolnshire Councils Partnership (S&ELCP), the service that PSPS were proposing would allow for a consistent and aligned approach to Procurement and Contracts across PSPS and the 3 client Councils and dispense with the current unaligned external arrangements, who were at capacity in terms of their ability to deliver a greater service.  It was envisaged that efficiencies will be delivered by the new Procurement & Contracts service through effective contract management, analysing spend data across PSPS and the client Councils to seek joint-procurement opportunities, and working in a proactive manner to add value throughout the procurement process. This will deliver value for money and future savings.

Significant committee deliberation followed the key points which included the following key comments tabled by a number of committee members:

Whilst recognising the benefits of aligning the function of procurement across the partnership, committee members voiced significant concerns at the lack of information and in particular the lack of financial comparative data, on the figures tabled within the report, to enable them to agree the current proposal.  Members stated there was not sufficient data to make an informed decision.  

Concerns were also tabled at the apparent lack of any tendering for the function of procurement with PSPS being given an automatic ‘shoe-in’ of the contract and that the report appeared to be a ‘done deal’, despite significant concerns by many members about PSPS’s track record to date in respect of other services provided, including on-going issues of not producing reports on time and also serious on-going I.T issues.

RECOMMENDED:

That the Corporate and Community committee defer the report to the next scheduled meeting of the committee to allow the report to be presented by the report author, and to ensure a more detailed comparison of the figures currently provided to provide a full breakdown of all costs to allow the committee to make an informed decision’.