Peterborough City Council Procurement Strategy*
Cabinet received a report which followed the development of a procurement strategy by the Procurement Working Group as part of the Council’s Contract Rules.
The purpose of the Procurement Strategy was to provide a framework for the next five years for the Council to purchase goods, works or services from third parties. The Strategy put forward a number of outcomes to be delivered in line with Council priorities and the direction of a commissioning led council.
The Cabinet Member for Resources introduced the report highlighting the main issues contained within. Given changes in procurement legislation, the Council had moved towards becoming a commissioning council and the Procurement Strategy outlined areas where further activity and action would be undertaken to ensure best value was achieved, the Strategy also reaffirmed the Councils commitment to supporting local businesses, the Draft Supplier Guide being important in this regard.
It was further advised that in March 2015, Council passed a motion which agreed the development of an ethical investment and procurement policy. Work had been underway to review this with a group of Members and a number of areas of council policy had been considered. The Group in the main was happy with the current approach, however further government guidance was awaited in order to be able to finalise the procurement elements. The Group was keen that the pension fund review its investment approach and whilst the pension fund was a separate entity and the Council’s motion could not be binding on it, Councillor Seaton advised that he had highlighted the issue to the Pensions Board, on which he sat.
The Council’s Service Director Financial Services was present at the meeting to respond to questions. Cabinet debated the report and in summary, key points raised and responses to questions included:
· The Strategy would not fail if the Council was unable to meet 100% of the success criteria outlined within, however the Council was aiming to deliver these in full to ensure maximisation of benefit, not just to the Council itself and local tax payers, but also to the local economy;
· It would take approximately 18 months to put the building blocks in place and the Council would be looking to deliver over the next five years;
· An annual update on progress would be brought back to Cabinet, the first one due in Summer 2016, this would outline how the Council was delivering against the Strategy;
· The National Procurement Strategy, on which the document was based, recognised the importance of looking after local businesses. The newly developed Supplier Guide was an integral part of the Strategy and it would be continually kept up to date following feedback from local suppliers;
· Advertising opportunities was an important element and there was a clear commitment that two procurement portals would be used locally for all procurement opportunities, so all local suppliers could see what was available;
· The Strategy outlined how the Council could engage further with local suppliers and it was acknowledged that more could be done going forward;
· All businesses regardless of size should be worked with and it was acknowledged that links should be made with the Federation of Small Businesses;
· There were two main areas in relation to modernising procurement, what the Council bought and how it went about buying it. In terms of what was bought, the Council needed to keep that under constant review and not just retender the same service;
· In terms of modernising how the Council bought, it was about utilising ICT as much as possible and various procurement options were being explored in order to streamline the process;
· The National Procurement Strategy did not prescribe or give suggested weighting between the levels of spend or how individual procurement exercises should be weighted towards local suppliers;
· The process was about making sure opportunities were transparently advertised and making sure that the process for local suppliers was as easy as possible;
· In terms of maximising value for money, it was not simply about the lowest cost. In all procurement exercises the evaluation criteria would be a mix of the financial benefit, but also the benefit of the service and how good the service being offered from the supplier was; and
· The Council had a good track record of delivering value for money over the years and the Strategy was about making sure the Council continued to maximise that element. The Strategy and the Contract Procedure Rules made sure that value for money was an essential requirement in what the Council was seeking to do.
Cabinet considered the report and RESOLVED:
1. To approve the Procurement Strategy; and
2. To note the progress to date on investigating options for an ethical investment and procurement policy.
REASONS FOR THE DECISION
The Strategy would provide a framework for procuring goods, works and services with third parties over the next five years.
ALTERNATIVE OPTIONS CONSIDERED
The first option considered was to do nothing, however, the Council spent in excess of £200 million per annum on procurement activity and the Council’s Contract Rules referred to the Council having a procurement strategy.
The Strategy aimed to be sufficiently flexible to allow development of individual policies to support the aims of the strategy e.g. concluding ethical elements.