Agenda item

8.1  The Strategic Director of Finance, Duncan Whitfield, and the Deputy Finance Director, Jennifer Seeley, introduced the report.

8.2  The chair, Councillor Gavin Edwards, asked how well corporate contract review boards were functioning and whether they were providing sufficient insight and challenge.  The Strategic Director of Finance confirmed that the corporate board was working extremely well but that he would like to see more challenge at the level of departmental boards.

8.3  The chair highlighted the proliferation of contracts across the council.  Given the risks in big long-term contracts, he wondered whether the council should be asking officers to take a preferred position of awarding work in-house unless there was a particular case for doing otherwise.  The Strategic Director of Finance responded that this could be stated in the Medium Term Resources Strategy but that it might have the effect of removing autonomy from managers who knew services well.  The chair commented on the general claim that private contractors were more efficient, better value for money and improved services.  Experience across the country was that profits were made at the expense of the people directly delivering the services, for instance in social care.  He wondered about the possibility of holding contractors to Southwark’s two tier code.  The Strategic Director of Finance clarified that if Southwark’s own staff were TUPE’d to a provider then their existing terms and conditions were preserved.  Through the procurement process and valuation, Southwark had been quite successful in the introduction of the London Living Wage.  The Ethical Care Charter was also breaking new ground.  However, legal advice would be needed as to whether or not terms and conditions could be specified through procurement.

8.4  Councillor Catherine Dale emphasised the importance of the skills of the people engaged in managing contracts and questioned where management of contracts should be positioned within the authority.  The Strategic Director of Finance responded that it would not be beneficial, operationally and in terms of relationships, to divorce day to day responsibility for managing contracts from the service managers.  Contract management was best left with service managers but supported from the centre.  Councillor Tom Flynn referred to pages 15 – 17 of the supplemental agenda which showed that a lot of decisions were made without any political involvement.  He asked what percentage were made at, for example, cabinet level and whether officers considered that the proportion was right.  The Deputy Finance Director explained that the system was not dissimilar to that of other councils, with contracts over £500K in value being referred to the political arena.  Procurement was considered a tool for output, to achieve service objectives, and limits were set at the level that the council decided.

8.5  Councillor Karl Eastham suggested that it might be helpful to officers to have a procurement strategy that included political considerations.  The Strategic Director of Finance clarified that officers tried to embody any evolving political priorities within procurement.  He added that Southwark compared with other London boroughs in this.  The chair commented that the council did not have a corporate procurement strategy in the sense of a document which provided strategy and direction and did not just set out processes.  The school places strategy contained a clear political input but there was no equivalent document in terms of procurement.  Councillor Adele Morris wondered whether the Community Development Foundation might be able to provide a framework for assessing contractors.  Councillor Johnson Situ stressed that the aim was to get the best possible service.  Some sort of accreditation might help but it would be important that no providers were excluded.

8.6  Councillor Claire Maugham commented that appendix C to the report, Extract from Medium Term Resources Strategy 2014/15 – 2016/17, seemed to be very broad.  She sought reassurance that the broad strategy captured specific learning for instance from the experience of the Draper House contract.  The Strategic Director of Finance responded that there was scope to go deeper in the strategy, it depended how specific elected members wanted to be.  Councillor Situ asked whether there was any mechanism in place to develop local businesses to be ready to take on services.  The Strategic Director of Finance replied that the Economic Development Team supported local businesses.

8.7  The chair asked to see a list of terminated or cancelled contracts over the last five years.  He also said that he would be taking a sample  of the contracts on the contract register asking why they were procured, whether they were performing well and how they were managed.  He would contact lead officers and keep strategic directors informed.  The chair asked members for suggestions as to which contracts should be examined.  The chair indicated that he intended to bring a draft report to committee in December.