Agenda item

The purpose of the report is to review the Council’s Procurement Strategy. 

Discussion:

The Chairman welcomed Dean Coulls – Acting Head of Category Management to the meeting.

The Acting Head of Category Management presented the report which provided a six month review of the Council’s Procurement Strategy. The Strategy used procurement to enable the local economy and the Committee’s attention was drawn to the increase in the number of apprenticeships generated with third party Small and Medium Enterprises (SMEs) and in the Council itself. The Strategy has also enabled a reduction in bureaucracy, an increase in the use of e-tendering and 82% of suppliers had responded positively to the changes. There were still some challenges to be met and it was felt that consultation was the key to continuing to meet objectives.

Members raised a number of points and questions including:

·                    Paragraph 3.11 of the report referred to the introduction of an e-procurement system and the Assistant Director Legal and Corporate Services highlighted the success of an e-contract for Chlamydia screening, the costs of which had been reduced by 67%. He thanked the Procurement Team for all their hard work on this contract. The Committee noted that the NHS did not obtain procurement services from Medway but it was intended to try and promote the Council’s procurement service to public sector partners highlighting, as a selling point, the successes in reducing the cost of other health-based contracts and Medway’s superior service.

·                    The Committee’s attention was drawn to paragraph 3.8 of the report which contained an excellent endorsement of Medway’s procurement service from Tudor Price – Business Development Manager of Kent Chambers of Commerce.

·                    Members asked to be involved in future engagement with the Federation of Small Businesses, the Chamber of Commerce and other local business groups.

·                    It was noted that the assessment of Measure of Success – The Council will reduce the average timescale of procurements from 140 days to 50 days – had been delayed and officers would ensure that the objective of reporting progress on the first anniversary of the Strategy, would be achieved. The Acting Head of Category Management advised that a planned Governance Review and changes to EU legislation should allow more flexibility which would be incorporated into this review.

·                    Measure of Success - the reduction by 25% of the number of invoices with a transaction value of less than £500 with the introduction of purchasing cards (p-cards) – Concern was expressed about the perceived difficulties in the financial control of the use of purchasing cards and many examples of misuse in the civil and public services had been reported in the media. The Assistant Director Legal and Corporate Services explained that the Council’s Chief Finance Officer had similar concerns and some initial scoping work was being carried out including looking at alternatives. However, the Council’s spend to third parties might be properly controlled if the process of the use of p-cards was correctly introduced and monitored. The Council struggled with small spends which add up to millions of pounds and they were more difficult to keep track of and one possible method of control was the use of p-cards. The Chief Finance Officer stated that, as the Council’s Section 151 officer, he had a duty to ensure that the method used to achieve control of small spends was viable and not open to abuse.

·                    In response to a question about the challenges facing the Council in the next two years, the Acting Head of Category Management felt that the 40% local Small and Medium Enterprise (SME) target was achievable and had been benchmarked at the outset of the Strategy. There was a need to make the Council an accessible organisation to do business with even though the Council was bound by public sector rules.

·                    A concern was raised about the lack of community benefit clauses in the Strategy - for example the promotion of a living wage.The Category Management Team currently consider the impact of the Social Value Act at the outset of any procurement exercise going through the Council’s Gateway process.

·                    A question was raised on the requirement for the need for more of the SME’s to be Medway based and on the tendering trigger threshold of £10,000 contained in the Council’s Contract Procedure Rules and whether it would be possible and practicable to reduce it to £5,000. It was agreed that more information was required on how many contracts this change would affect and the Acting Head of Category Management agreed to supply the Committee with a briefing note.

·                    In answer to a question raised on how the Council could encourage and facilitate the concept of consortia working of which Healthwatch was a high profile example. The Assistant Director Legal and Corporate Services advised that he would be pursuing this with the University of Kent Business School. Discussions were being held with the voluntary sector Federation of Small Businesses and Chamber of Commerce and the Council had been asked to extend the lead in time to allow for improved collaboration.

Decisions:

(a)               That the Council’s progress against the measures of success in the Procurement Strategy be noted.

(b)               That further reporting to the Committee be annually on the anniversary of the Procurement Strategy with effect from September 2015.

(c)               A copy of the booklet “How to do business with Medway” be supplied to the Committee.

(d)               The Councillors be included in the consultation and engagement with Small and Medium Business Enterprises.

(e)               A briefing note to be supplied to the Committee regarding alternative measures to control the Council’s small spends.

(f)                 A report be submitted to the Committee on progress in facilitating suppliers bidding as a consortium or partnership.