Agenda item

[Parvinder Uppal,Head of Commercial and Claire Nye, Director of Finance, to jointly present report]

Claire Nye, Director of Finance, made a few introductory remarks about the reasons for presenting the report to the panel.

The Director of Finance commented that the Council is striving to make improvements and achieve the highest standards in all areas. The area of contract management was identified for improvement. The Director of Finance added there are good areas of practice but there was more that could be done to further improve standards. The Director of Finance commented on the important role of contract management in ensuring the Council delivers value for money.

The Director of Finance commented that the review of contract management began in 2020 but progress was delayed because of the pandemic, however there is a commitment to bring about the necessary improvements in contract management.  A self-assessment of the service was completed against the new financial management frameworks earlier in the year.

As a result of the review the area of contract management framework was flagged with Audit and Risk Committee in June 2020 as needing action to improve current practice. The findings of the review were also shared with the Council’s external auditors.

Parvinder Uppal, Head of Commercial Services, commented on the link between contract management and the Council’s strategic objectives as detailed in the Council Plan. The Head of Commercial Services commented that improving contract management practice will cover two areas, firstly at the officer level, with the aim of improving capability through skills and knowledge and secondly at the strategic level, to improve current processes by introducing an improvement plan and evaluating progress against a contract management framework.

The Head of Commercial Services commented on the findings from the National Audit Office which highlighted how effective contract management can be in helping to achieve savings and drive value across the supply chain.

The Head of Commercial Services commented on the main findings of the contract management survey of employees and explained that it was aimed at getting feedback on current practice across the Council to make improvements and drive excellence across the organisation.

The Head of Commercial Services advised the panel that 61% of contracts were bespoke – these are contracts that are drafted specially for service goods which highlight the need for good contract management practices.

The survey identified that employees manage contracts with different values across the organisation. The information will help the service to inform the development of a risk-based framework and further work is planned to be better understand this issue.

The Head of Commercial Services commented on the issues experienced by employees when managing contract across the organisation. The issues highlighted were as expected and the findings will be used to develop the contract management framework and ensure that the training covers the right areas.

The Head of Commercial Services advised the panel that new procurement regulations are expected in January 2022.

The Head of Commercial Services commented on specific plans for improving contract management practice in the future and the gave a summary of the contract management project plan. The panel were invited to comment and ask questions about the presentation.

The panel queried the survey finding which reported that 64% had received training in contract management and action to be taken to address the remaining number who have not had training. The panel expressed concern about how this group of employees will manage the issues highlighted in the earlier in the presentation without this training.

The Head of Commercial Services advised that the issue will be addressed by the contract officers managing those contracts and there is a clear process to follow. In addition to the commercial team, colleagues in legal and procurement will be available to help if needed.

The panel queried if the planned training will be mandatory or optional and what will happen to employees who does not meet the standard in terms of their future contract management role.

The Head of Commercial Services advised the panel that the service is working with colleagues in Organisation Development (OD). The training will be mandatory and will be monitored through OD team. The Head of Commercial Services added that when people register for contract management training and the accreditation foundation courses there is a timeline to complete it and progress will also be monitored by the service. In addition, there will be support for colleagues from the service completing the course.

The panel queried the current number of Council contracts and asked for the information to be sent separately if not immediately available. The Director of Finance commented on the work being done to collect this information and agreed with the view of the importance of having the information in one place. The proposed new contract management framework will support this aim. The Director of Finance agreed to provide the information about the number of Council contracts to the panel.

The panel expressed concerns about the survey feedback about the numbers reporting they have not received training in contract management and queried how many people surveyed were designated as either contract owners or contract managers. The panel would expect contract managers to have the necessary training as a minimum and there was concern about the how Council contracts were being effectively managed in this situation.

The Head of Commercial Services commented that employees may not have contract management training, but elements of the training would have been covered as part of other professional training courses which they would gave completed at various levels. In some situations, colleagues would also have gained experience of contract management in their previous and current roles.

The panel queried the reason for not contracting the Chartered Institute of Procurement and Supply (CIPS) to provide the training. The Head of Commercial Services commented that the CIPS and other specialist training providers were considered, but the decision was made to go with the Government’s Commercial College as it was recognised by the National Audit Office.

The panel queried how the issue about contract management was identified originally as an area of concern. The Head of Commercial commented that there was awareness of the different issues relating to contract management before the survey findings. The commercial team was established around 2017/18 with responsibility for managing some of the Council's complex contracts. As a result of this work and the experience gained the service was asked to support colleagues in other areas of the Council, over time several of these issues in the survey were identified as concerns.

The panel queried the number of people within the team with contract management qualifications. The Head of Commercial commented that her background is a qualified procurement professional, and she has worked in contract management for a long time, another member of the team has a Masters in contract management and some of the new members of the team are currently taking the foundation training and will be going onto to achieve practitioner level in the future.

The panel queried the process by which the organisation achieves its aim to be considered the best at contract management. The Director of Finance reassured the panel that while the findings did highlight areas for improvement there are a range of controls in place to manage contracts. The Council has good budget monitoring processes and there are systems to produce monthly reports. Furthermore, budget managers are required to upload budget forecasts which will reviewed by the finance team and they will be asked to explain variances against budgets set for the contract. The Director of Finance also added that there are robust controls in place to monitor orders and invoices and to manage performance and spend, which would identify potential problems.

The Director of Finance added that proposed changes are intended to achieve consistency across the Council in terms of contract management with a focus on smaller contracts. The aim of the changes is for Council to drive out potential inefficiencies and to also maximise the value from the contracts which support social value and equalities aims highlighted in the presentation. The Director of Finance outlined a range of measures and benchmarking that will support further improvements in contract management across the Council.

The Director of Finance accepted the point about the importance of clarifying the role of contract managers and contract owners, which had been highlighted in previous discussions. The discussion will help inform the assessment of training needs for each role, particularly for those people managing complex contracts.

The panel welcomed the report and thanked the presenters. The panel agreed to note the progress and the future for improving contract management arrangements across the Council

Resolved

1.    The Head of Commercial Services to present a progress report on the project plan in January 2022 to give feedback on training workshops and an update on the Government review of procurement regulations.

2.    The Director of Finance to provide details about the number of contracts managed by the Council.