To review and approve the proposed updates to the Contract Procedure Rules, the Financial Procedure Rules and the Financial Procedure Rules Guidance Notes.  To ensure council financial and contract procedure rules are up-to-date following the introduction of the Procurement Act 2023 and Procurement Regulations 2024, which is new legislation due to come into effect on 24 February 2025 in order to ensure transparency about how public resources are used and controlled to mitigate the potential for fraud and ensure compliance with relevant legislation.

The Director of Finance (DOF) introduced the report, the purpose of which was to provide an update on the contract procedure rules and financial procedure rules and guidance notes. They were last reviewed by the committee in January 2024 and updates were needed to reflect required legislative changes due to the procurement act and procurement regulations that came in to force the following month as well as some changes in job descriptions through the financial procedure rules. A summary of the changes could be seen at paragraphs 10 and 12 of the report.

In response to committee questions:

1.     It was explained that to engage smaller/ local suppliers relied on good engagement early on and communication and sharing of information and making sure that the requirements through the tender process are proportionate to the size of the contract. The Priority Supplier Programme had been introduced which is an early payment programme that gives suppliers the opportunity to be paid earlier than contracted terms.  It was noted that new regulations encouraged greater premarket engagement.

2.     The Commercial Services Manager (CSM) confirmed that there were local companies bidding for work, particularly in mortgage construction and minor works areas. It was thought that there was still work that could be done to encourage other companies and look at opportunities in dividing contracts to make works more accessible for local suppliers such as encouraging larger suppliers to work with local supply chain and subcontractors.

3.     It was explained that there are mechanisms within the new legislation to direct awards in certain circumstances, for example, protection of life and users’ choice.

4.     The use of the dynamic market process was explained.

5.     Each director is responsible for appointing contract managers within their directorate area to manage contracts. Any officers that are dealing with procurement or contract management related activity in their role should either have the requisite experience in contract management and procurement or would be appropriately trained. The Commercial Services team offer both sets of training, procurement, and contract management, twice yearly to those officers. There is also an online introduction to the contract procedurals and finance procedure rules that must be completed once a year to ensure they keep themselves updated of the procedures.

6.     The Senior Lawyer (SL) confirmed under the new rules all contracts over £5 million must have 3 Key Performance Indicators (KPIs) published. The Waste Contract and Public Realm contracts did have KPI’s within their contracts but there was no legal requirement to publish them. The SL would investigate if it were permissible for these to be published.

7.     There were provisions within the waste contract to vary the KPIs, work was ongoing to ensure that the KPIs that go into the public realm contract will have similar mechanisms as where contracts are for a number of years, requirements and ways to measure performance will change over time.

8.     In the procurements and contracts, it is stated that companies should reduce the environmental impact of the contract, the use of electrical vehicles had already been looked at in terms of the public realm contract.

9.     The DOF explained that a key part of the transformation strategy was to ensure that the council and officers are equipped with the right skill set to be able to take on commercial negotiations, drive out value for money and improve.
services in the councils contracting arrangements. It was highlighted that the annual audit letters, which was a summary of value for money work, highlighted that the council has a good contract management arrangement in place. Last year the auditors had specifically looked at the waste contract and they had made positive statements around that activity.

RESOLVED:

The committee approved the updates as technical changes to the constitution the Contract Procedure Rules at Appendix 1, Financial Procedure Rules at Appendix 2 and the Financial Procedure Rules Guidance Notes at Appendix 3.

Action(s)

2023/24-050 The Senior Lawyer to investigate the waste and public realm contracts to see if it was permissible to publish the KPIs.