Agenda item

The Committee considered a report reviewing the progress being achieved in developing the Council’s Procurement Function. It also noted that a new Procurement Strategy was being developed via a cross party member focus group (comprising nominated representatives from the Policy and Resources Scrutiny Committee) the timing of which dovetailed into a number of key milestones that included:

-        The National Procurement Service

-        Welsh Government Fitness Check

-        Welsh Government Procurement Policy Statement

-        Future Direction of the Procurement Service

-        Current and Future Workplans.

The following issues were raised during consideration of the report:

·        Reference was made to page 26 of the report and to the disappointing level of savings achieved to date from the Council’s membership of the National Procurement Service. That concern was heightened in relation to the fuel contract negotiated by the NPS which could cost the Council an additional £35k at a time when fuel prices were falling.

The Head of Audit, Risk and Procurement in response stated that whilst the level of returns were less than anticipated, a factor compounding that disappointment was the 0.45% levy applied to NPS contracts. He advised that the Council had entered into a five year agreement with the NPS, which was currently in its third year, and that at the end of the five years local authorities would be better placed to challenge its performance. Additionally, the Wales Audit Office was currently undertaking a review of the service examining areas that included what the NPS had produced, was it paying for itself and was it providing benefit to its members.

·        Reference was made to the disappointing savings accrued to date by the Council as a member of the NPS and to whether the Council could opt out of various contracts.

The Head of Audit, Risk and Procurement advised that whilst that option was available, it would have to sanctioned by the NPS Board, approval of which he felt would be limited. He also advised that whilst the Council was a member of the NPS there had been occasions when it had decided to not opt in to various contracts e.g. the provision of stationary and the Construction Consultancy Framework.

·        Reference was made to the £25k cashable savings claimed to have been earned by the Council from being a member of the NPS, and a view expressed that the Council should, when considering entering into national contracts, have regard to their potential impact on the local economy and local Small to Medium Enterprises.

The Head of Audit Risk and Procurement in response advised that whilst the Council was in the 3^rd year of the 5 five year contract it would need to examine any future benefits to be accrued from continued membership. That could include the impact on the local economy, a factor taken into account when the Council had decided to pursue its Regional Contractors Framework and not participate in the NPS Contract.

·        Reference was made to the £74k savings generated by the Council from having negotiated its own milk contract rather than use the NPS contract, and the committee’s attention was drawn to the fact that the level of saving achieved on that one contract exceeded the whole of the claimed £56k savings achieved on its NPS contracts during 2014/15.

The Head of Audit, Risk and Procurement advised that whilst £74k of savings had been realised on the milk contract the Council’s proportion thereof amounted to £26k, the remaining £48k was grant aided and would represent a reduction in the grant claim to the welsh Government. In response to a question relating to the sourcing of the milk he stated that whilst it would be desirable for the Council to stipulate it should be locally sourced, that was not legal. He also advised that under the former Welsh Purchasing Consortium, under which the milk contract had been procured, opportunities had been provided to local firms to tender for the contract, which would not have occurred under the nationally tendered NPS contract. Wherever possible, however, representations were made to the NPS to award contracts on a “lot basis” as opposed to an all Wales service thereby enabling local suppliers to tender for contracts.

UNANIMOUSLY RESOLVED that the report be received