Agenda item

The Scrutiny & Overview Committee is presented with the Quarterly Procurement Plan Update report considered by the Mayor at the Cabinet meeting on 6 December 2023. The Committee is asked to: -

1.  Review the information provided in the Quarterly Procurement Plan report and

2.  Decide whether there are any concerns or recommendation it wishes to make to the Mayor on the content of the report

3.  Decide whether there are any areas where further scrutiny should be scheduled at a later date.

The Committee considered a report on pages 99 to 108 of the agenda which provided the latest quarterly update on the progress with delivering the Procurement Plan, which had been considered by the Mayor at the Cabinet meeting on 6 December 2023.  This report had been included on the agenda as procurement was identified as an area of focus for the Committee.

The Cabinet Member for Finance, Councillor Jason Cummings, Section 151 Officer, Jane West and Head of Strategic Procurement, Scott Funnell were in attendance at the meeting for this item.

During the introduction to the report, the following points were noted: -

• Procurement had been a key target for the Administration since its election in 2022.
• Progress had been made, but there was still a lot to do. Both the quarterly and annual reports were a key part of the improvement journey.
• It was essential to ensure that the Council was being transparent over its contracts, as it allowed companies to see what contracts were coming up for procurement and prepare bids.
• There had been improvement in identifying the reprocurement window when contracts were coming to an end, but some were still being missed which was reflected in the report.
• A current focus for the Procurement service was ensuring officers across the Council had the right skills to deliver procurement projects and that the end to end procurement process was joined-up.

Following the introduction, the first question from the Committee asked whether it would be possible to reflect in future reports where values had been amended from previous reports. It was explained that the types of contracts the Council procures varied. Some, such as the contracts for emergency accommodation, showed the maximum value spend a contract could go up to. An alternative option the Council was progressing was using a dynamic purchasing system, which allowed a lot of different smaller providers to bid for contracts. It was agreed that where contract variations have been agreed, these could be included, although further exploration was needed to confirm the exact format for this.

It was questioned whether the Council had the right balance between the number of long and short term contracts it held. It was advised that the length of a contract would depend on the nature of the service provided. For instance, if a contractor needed to invest a significant amount of money upfront, a contract would usually need to be over a longer period. It was quite common in local government to use a contract with an initial three year term followed by two single year extensions (3+1+1), but there was an intention to move away from this towards using five year contracts as needed. A targeted improvement was to ensure that any decision to extend a contract was based on sound contract management, rather than convenience.

It was questioned whether reassurance could be given that the Council now had a complete list of its contracts and what work was being done to reduce the risk of contracts automatically extending. It was advised that at present all known contracts were listed accurately, but there could not be total confidence that the list was complete as the Council continued to be on an improvement journey. The list continued to be refined and was getting better with each iteration, to the point that Croydon was likely to be slightly ahead of other boroughs in not being far off having a complete list of its contracts. The Council had introduced a contract register which fed into the procurement pipeline that was constantly being updated and staff were starting to see the benefit of this approach. Reassurance was given that all contracts listed within the Quarterly Update had its own report sitting behind it with an audit trail signed off by the relevant cabinet member and director. Automatic renewal should be avoided as it increased the risk challenge and meant the Council was potentially missing best value.

There was concern raised about the quality of data available at the Council and whether it was good enough to ensure there was a clear understanding of what was required from a contract at the start of the procurement process. It was advised that the Council was improving its use of data, but it was not where it should be at the moment. There was a need to ensure officers were able to step back and assess what was being procured rather than simply renewing a contract. This would be facilitated by an improved contract management process which would provide a clear understanding of what was needed when it was time to reprocure a contract. As part of this, the Council needed to improve how it worked with its contractors to design and specify what data was expected in its contract to support wider improvement.

It was questioned whether there was sufficient specialism within the Procurement team to support directorates with the technical detail of any procurement processes within their respective areas. It was advised that the team had moved in 2022 from a category management model to a central resource split into three teams, namely Social Care, Housing & Sustainable Communities and back office services. This approach was based on services providing the area specific expertise and supported by the procurement expertise of the central team. It was recognised that the team needed to provide additional support for high profile contracts, particularly around pre-procurement and contract management. In comparison to other local authorities the team was getting involved in more lower value contracts which was stretching resources and as such there was an intention going forward to prioritise higher value contracts, given these provided a greater opportunity to deliver savings for the Council.

In response to a follow-up question about whether departmental specialisms could be offered in the future, it was advised that it had been found that contract management rather than service specific skills were lacking. The preferred model was to have a concentrated corporate team providing support as needed, with the contract management process led within services, as they were managing the contract on a daily basis. Given the volume of work within the Housing directorate, additional resource had been provided, but in the longer term the service would need to build contract management skills within its structure.

It was advised that a key priority was to address the number of contracts not being reprocured in time, as this was creating a backlog that affected capacity. Once this had been addressed, it would provide additional scope toward ensuring best value was being delivered. A new Procurement Act 2023 was due to come into effect from October 2024. Whereas there was previously a requirement to produce four procurement notices, the Act brought in 17 separate notices. It also made the publication of the procurement pipeline and key performance indicators mandatory.

At the conclusion of this item the Chair thanked both the Cabinet Member and the officers present for their open and honest responses to the questions of the Committee.

Actions

Following its discussion of the Quarterly Procurement Plan update, the Committee agreed the following actions to follow-up outside of the meeting: -

1. The Committee agreed that it would revisit procurement later in the year to check on the progress being made in delivering improvement. 

Conclusions

Following its discussion of the Quarterly Procurement Plan update, the Committee reached the following conclusions: -

1. The Committee agreed that it was unable at this stage to be provide reassurance that procurement process was as good as should be expected. However, it was acknowledged that significant progress had been made with improving the service.
2. The Committee was reasonably reassured that both council officers and the Cabinet Member for Finance were aware of the issues to be resolved and were taking steps to continue the improvement journey.

Recommendations

Following its discussion of the Quarterly Procurement Plan update, the Committee agreed to submit the following recommendations for the consideration of the Mayor: -

1. The Scrutiny & Overview Committee recommends that a method for publishing further information on agreed contract variations is explored through the procurement reporting process.