To receive a report.

Martin Gibbs, Head of Procurement & Contracts, PSPS Limitedpresented Members with a report that detailed proposed amendments to the Council’s Contract Procedure Rules and Financial Procedure rules, pages 65 to 102 of the Agenda refer.

The purpose of the report was to present to the Committee a revised draft set of Contract Procedure Rules with appropriate delegations that provided additional clarity around the procedures to be followed and reflected the Council’s management structure.  There was also a recommended change to the Financial Procedure Rules which would allow alignment with the new finance system used across all 3 councils when authorising payments.

Members were invited to review the revised set of Contract Procedure Rules and to consider recommending them for adoption to Council.

The Head of Procurement & Contracts referred Members to the background and expected benefits to the Partnership and referred to the specific proposed amendments to the contract procedure rules and financial procedure rules set out in Appendices 1A, 1B, 1C, 2 and 3, pages 71 to 102 of the Agenda refer.

Questions and comments were received as follows:

• In relation to ‘local’ being referred throughout the report, a Member asked for clarification as to whether this related to East Lindsey or Lincolnshire as a whole.  It was highlighted that if a larger contract was awarded out of the area as the service could not be procured locally, it was important that any sub-contracting went to local businesses.  It was further queried whether sufficient engagement was being undertaken with business with regards to the approved contractors list and how they could be added to the list to work with and provide a service to the district council.

The Head of Procurement & Contracts agreed that a definition of ‘local’ was definitely required and would look to propose this as part of the draft procurement strategy that was currently being drafted.  With regards to the larger contracts, Members were advised that social value clauses looked to include a weighted award criterion, for example whether the supply was locally sourced and if local apprentices would be engaged as part of a big contract.

The Head of Procurement & Contracts informed Members that there was not an approved contractors list in place as it was considered that this became more prohibitive rather than inclusive.  A solution would be in place for the new procurement contract service which was currently being procured and would be implemented shortly.  This would be made widely available on websites and at ‘meeting buyer event’ opportunities for local suppliers to offer advice to those who may have difficulties in submitting an open tender, for example.

• A Member queried whether there should be a necessity in terms of contract award to look at the carbon impact of the decision to those companies that may be adding to the carbon footprint, particularly as the Council had a responsibility to reduce this.  The Head of Procurement & Contracts advised Members that with regards to the carbon impact of a decision this could be incorporated as part of the evaluation criteria.

• A Member referred to the number of levels involved within the process to approve a contract via an exemption and raised a concern regarding the impact the timescales associated with this may have.  The Section 151 Officer informed Members that contract awards via an exemption could be made very quickly by way of an executive decision notice or a S151 of portfolio holder decision and as long as all of the information was available to consider a decision could potentially be turned around in 24 hours.

• A Member referred to the Internal Auditors low assurance report on procurement and asked what plans were in place to communicate and educate and train staff in the new procedure.  The Member also asked for assurance as to what steps were being taken to ensure there had been some form of integration testing between the new procedures, the new financial rules and the new finance system to make sure it worked smoothly.

The Head of Procurement & Contracts informed Members that training had been arranged commencing in February 2023 for officers initially to gain an understanding of how the new procurement team would work, particularly as there would be nuances and culture changes moving forward.

With regards to the low assurance report, as part of the process a further report would be presented to Committee in approximately 6 to 12 months’ time to look at the processes underway, how they were being checked and an update on how the new procurement service was running.  The Section 151 Officer added that by aligning the procurement process across the Partnership this would be a lot simpler from an officer perspective as the Unit 4 Finance system would be the same across all three councils.

• A Member considered that it would be helpful for Committee to receive a short report on exemptions, particularly the larger exemptions so that there was transparency if for example, a contractor raised this locally and it would make it clear why an exception had been made.  The Section 151 Officer advised Members that currently these were presented to Executive Board as an agenda item, therefore consideration needed to be given on how this process would link up and feedback.  The Head of Procurement & Contracts was asked to provide a regular update on these as part of the new process moving forward.

Following a query on the process of the exemptions being presented to Executive Board, the Procurement Officer clarified that as the exemptions had already been approved as part of the procurement process they were presented for noting and were not for discussion or approval and this was how they became available in the public domain.  The Section 151 Officer advised Members that she was agreeable for a summary sheet to be produced that would set a context for the exemptions and also would consider where to include this information to give it more transparency and an opportunity to ask questions.

• A Member asked that once the proposed amendments to the Council’s contract procedure rules and financial procedure rules was in place that a report should come back to Committee detailing the number of contacts awarded, the volume and categories of contracts that they were awarded in and how the process worked in order for Committee to monitor whether the recommendation to support the decision had worked in practice.  The Section 151 Officer confirmed that this would be added to the Forward Plan.

No further comments or questions were received.

The Chairman referred Members to the recommendations contained within the report.

The recommendations were proposed and seconded for approval.

Following which it was,

RESOLVED:

That the Audit & Governance Committee:

1. Recommend to Council that the revised Contract Procedure Rules at Appendix 1 to the report be adopted, without amendment, as the Contract Procedure Rules (CPR).

2. Agree that the Monitoring Officer be authorised to make the necessary changes to update the Council’s Constitution, accordingly, including delegation to amend where inconsistencies arose, noting that the CPR would take primacy.

3. Approve the revised financial procedure rule for Banking arrangement and cheques as detailed in Paragraph 1.12 of the report.