92
Samantha Preston, Head of Operational Finance, and James Sinclair, Procurement Specialist [Braintree District Council], introduced the report by giving an account of work done to develop an Essex Procurement Partnership [EPP] offer, and future work planned for 2024. The purpose of the Procurement Partnership was given, including to improve procurement resilience and prevent paralysis at local authorities, which could be caused by unplanned absences of key procurement personnel. The Partnership was also being designed to improve access to procurement expertise and to provide expertise and best practice in all procurement areas, ensuring that all third-party spending is effective. Specialists in each area would provide value for money for each partner organisation.
Value for money was aimed for by accessing economies of scale through collective action to increase contract sizes. Collaboration would also reduce duplication of efforts and costs. New procurement regulations were incoming, and a partnership would help avoid duplication of form and process updating. All updates for all partners would only need to be done once. Unified documentation and processes would help to reduce barriers for potential contractors/vendors.
Procurement was a niche area, and staff were in demand. By developing a wider partnership team, this would improve career opportunities and improve staff retention. The partners involved in the EPP were shown, with discussions ongoing with several more local authorities.Significant support was being shown, and the intention was to create a true partnership. The team was described, and it was underlined that the procurement consultants were all fully and directly employed members of their respective teams, not external consultants.
The proposed governance arrangements for the EPP were outlined, including elected members, officers and senior management. Challenge and ideas from outside of procurement were desirable, in addition to external peer review.
A common approach to social value had been set out, and work was now needed to embed this. Alarge amount of work was going into improving transparency of spending, driving the value gained from spending. The proposed terms of reference for the Members’ Advisory Group had been laid out, and additional funding identified and gained. The total value of contracts between current proposed partners came to £55m, split between around 700 contracts and with around 111 projects currently on forward plans.
The three different sets of priorities were given, with the aims to achieve the first set, then the second, then the third. As Priority One items were embedded, the EPP would move to Priority Two items and so on. Savings would be sought for each budget, and a plan would be tailored set out what training was needed on procurement, delivered by Essex County Council [ECC]. This would include innovations to improve savings, and better understanding of specific areas of procurement. A timetable was given for planned work in 2024.
A Panel member complained that there was no Council Officer present to lead on this item. The Procurement Specialist was asked what democratic processes had been followed by the local authorities involved, in getting to this stage of the EPP, and where and when decisions had been taken and scrutiny provided by elected members. The Panel member also gave the view that, as councils would have less money in the future, more priority should be given to providing social value, rather than value for money. Officers were asked where the Council’s voice was on this issue, and what split in priorities between value for money and social value had been set. The Head of Operational Finance explained that the Council asked to see social value, but that the weighting given to this depended on the type of contract. The Council did not have a defined weighting at this stage. It performed well in getting social value, but was looking to further improve.
The Head of Operational Finance clarified that the Council had not yet signed up to be a member of the EPP, and that much work remained to be done before potentially joining in quarter two of 2024-25. Consultation would be carried out and elected members would have their say. Social value remained of importance to the Council, and all partners would have their say going foreward There would be no formal decisions made prior to consultation.
The Procurement Specialist gave assurance that none of the proposed oversight groups were decision-making bodies, and that each local authority partners would decide and approve choices on quality, spend, splits between value for money and social value, etc.
A Panel member asked whether membership of the Members’ Advisory Group would be in the gift of the Leaders of the partner local authorities, and requested information on expected economies of scale, and potential threats from market volatility. The Procurement Specialist agreed that it was important to understand the risks of each procurement decision. Some procurement would emphasise supporting the local economy, others would seek maximum value for money. It was for each partner to decide their own approaches.Rosa Tanfield, Head of Neighbourhood Services, explained that the Council’s representative on the the Members’ Advisory Group would be Councillor Cory, Portfolio Holder for Resources.
The Panel discussed concern that, if the intention was for the Council to join the partnership in quarter 2 of 2024-25, there would be no time prior to that for consultation with members, due to the ending and starting of municipal years, and election periods. The importance of members setting direction, rather than officers, was emphasised. Officers were asked what to confirm the average value of contract, the expectations were for savings, and what the cost of joining and participating in the partnership would be. The Procurement Specialist explained that data was still being gathered, so average contract value could not yet be confirmed. Contracts ranged from very large to very small. Savings had not yet been targeted as data was still being gathered and due diligence work needed to be carried out.
Councillor King, Leader of the Council, noted that the direction had been set and approved by Full Council and considered by Scrutiny Panel, Governance and Audit Committee and Cabinet. The Leader offered to recirculate the December paper on this subject, for clarity. This had laid out that the cost to Colchester for the work on the proposed Partnership was £25k for the current financial year, and would be £40k in the coming year. The Head of Operational Finance pointed out that the actual cost to the Council may be less than the projeced £40k, as the Council would be contributing expertise and resources, which would act to minimise the financial cost. The range of work this paid for was outlined. Examples were given of the benefits of working with partners, expecially how this would help meet the budget deficit. Partnership would improve the Council’s influence, scope and resilience. Richer services and better expertise would be available. The Leader noted that the administration could learn from the discussion at this Panel, and better present the proposals, progress, and how the Council was proceeding.
The Panel queried why this subject had not been brought to Policy Panel previously by Cabinet. The Leader noted the full agendas laid out for Policy Panel’s meetings in 2023-24, and reiterated his commitment to giving members as much engagement as possible. The intent had been published, and challenges set out, in the pursuit of openness. Shared services was not a new concept, and the Council was not at the end of the stage where members could feed in their views. A Panel member argued that the proposal should have been put before the Panel first, and that the Panel should get to decide what work it undertook. Panel members argued that the Panel should be given the opportunity to make recommendations on such decisions. Criticisms were made that the subject had been presented as a fait accompli, that lessons should be learned from this, and that the item should have been presented by Council officers.
The Leader offered further talks on this subject, either at the Panel meeting in March, or in September. The Chair noted that the March meeting agenda was heavy, and that an additional meeting would be needed.
The Panel queried how economies of scale could be achieved, if each partner was to conduct contracting individually. The Procurement Specialist clarified that each partner authority would remain separate, that the partnership would not be a single legal entity, and that joint procurement would be conducted for partners where partners demands were matched. A formal consortium model had been considered, but this was not currently being further explored as an option. A Panel member gave the view that any consideration of changes to the legal structure should be brought before Policy Panel and Governance and Audit Committee.
The Leader clarified that the statement that Colchester had joined in 2023, meant that Colchester had joined the conversation on the proposals, not that it had formally joined any scheme. It was projected that the Council would look to do this in quarter two of 2024-25. The £40k cost for the year was a contribution to a variety of shared services work. Policy Panel had not been excluded, but the work was not at a stage where there was enough to look at, and there were no decisions to sign off.The Leader welcomed the Panel’s input once that time came.
RESOLVED that the POLICY PANEL hold an additional meeting to consider the issues and concerns raised at this meeting, regarding Council procurement, and the Essex Procurement Partnership.