Agenda item

Purpose: To continue work to review procurement processes in place across the Council. 

The Committee considered a report in continuation of the review into the procurement processes in place across the Council (Agenda Item 5).

Mike Sullivan introduced the item by making the following points:

·                    The Corporate Contracts and Procurement Unit worked within the rules outlined within the Contract Rules of Procedure (CRoP) (Part 12 of the Council’s Constitution), which was updated in January 2010, the Public Contracts Regulations 2006 and the Public Contracts Regulations (Amendment) 2009. 

·                    There was clear guidance in the CRoP on financial thresholds and the procurement processes that applied to each threshold.  The Procurement Unit would always be involved with contracts valued above £50k and those above £156k would need to be advertised through the Official Journal of the European Union (OJEU). 

·                    The Procurement Unit had less of an involvement for contracts valued at lower than £50k and the use of the Quick Quote facility was promoted for all contracts valued below this amount.  44 contracts had been awarded in this way for contracts valued at between £10k and £50k.  It was noted that this left a number of contracts unaccounted for and Mike Sullivan advised that the majority of these were for contracts valued at less than £10k, which were often for small one off purchases that did not require the involvement of the Procurement Unit or were grant funded.  However, he believed there was scope to increase the usage of Quick Quote.  Efforts had been made to do so via an article in Reporter, discussions held with service areas and by developing training for Officers and Members.

Concern was expressed, as at the last meeting, that the procurement process was very delegated and the Procurement Unit had little involvement in much of the procurement undertaken across the Council.  There had been no involvement in any contracts lower than £10k and this was particularly concerning for Members as the Coalition Government had announced a requirement for local authorities to publish all spend over £500. 

The £10k threshold was felt to be too high as the contracts below this amount could total a large sum when combined, even when omitting those below £500. 

Shiraz Sheikh informed the Committee that the £10k threshold had been approved by Council in January 2010 as part of the revision of the CRoP.  This raised the threshold in line with best practice.

There was a framework in place to support more strategic procurement, for example with neighbouring local authorities.  It was suggested by a Member that there was scope to do this and make savings, for example on stationery orders which totalled approximately £700k for non school staff.  

Andy Walker confirmed there were around 200 budget managers across the Council.  While budget managers could be cleared to authorise expenditure of up to £50k and service managers up to £100k, these permissions varied and it was up to Heads of Service to set an appropriate restriction.   

A question was then put to the Chief Executive as to whether there should be a more rigorous sign off process in place for contracts valued at between £1k and £10k. 

In response, Nick Carter made the following points:

·                             He had not seen evidence to suggest there was an issue or that contracts were not achieving value for money.  This was supported by extensive work undertaken across Berkshire to assess whether improvements could be made to achieve greater value for money.  This showed that West Berkshire’s existing processes worked well and other Berkshire Local Authorities had indicated they would be looking to incorporate West Berkshire’s methods into their arrangements.  A report was being produced following this work and this was offered to the Select Committee. 

·                             This benchmark work had not been widened to include private sector organisations as they were required to operate under different regulations. 

·                             Although there was always room for improvement, there was no evidence to suggest that the £10k threshold should be reduced.  It was important that available resources were focused on priorities.

Progress with the Improvement and Efficiency South East (IESE) audit was queried.  This was to conduct a review of areas including current activity, best practice and value for money.  The Select Committee felt it would be of benefit to see the audit report once finalised and Nick Carter agreed to arrange this. 

There was a view among Members at the previous meeting that the Procurement Unit needed to at least have an awareness of all contracts.  It was therefore queried whether there was the potential for this to happen via a more centralised model and for the Procurement Unit to offer more advice and support for certain categories of expenditure. 

In response, Nick Carter gave his view that West Berkshire’s model was not centralised based on experience and best practice.  It was found that greater savings could be achieved with a decentralised model, as Officers within service areas had a better understanding of their requirements and could therefore achieve better value for money. 

RESOLVED that the reports produced as a result of the cross Berkshire work on procurement and the IESE audit would be circulated to the Select Committee once finalised.