Minutes:
Prior to receiving an overview of the Contract and Financial Procedure Rules, Members were informed by the Service Director of Finance and Improvement Services that the update had been informed by the Governance and Audit Committee’s Learning and Development Plan, which had been agreed by the Committee on 14th February 2023. The Service Director noted that this was the first update to the Committee in respect of the Procedure Rules and informed Members that its purpose was to raise awareness of their content, which was a key element of the Council’s Constitution and applied to all officers and Elected Members of the Local Authority. The Service Director added that the update sought to further enhance the Committee’s understanding of the Procedure Rules and would provide context to future reports presented to the Governance and Audit Committee.
With the aid of a PowerPoint presentation, the Data and Systems Manager and the Procurement Manager provided the Governance and Audit Committee with an overview of the Council’s Contract Procedure Rules. Members were informed that the main purpose of the Contract Procedure Rules is to ensure legal compliance by giving structure to members of staff when procuring.
The presentation included an overview of the relevant legal framework, the governance arrangements and information in respect of the changes to the Procurement Bill, Social Partnership and Public Procurement (Wales) Act 2024, with an implementation period expected by October 2024.
One Member questioned if there was collaborative work undertaken with other Local Authorities in respect of the procurement process, which might achieve better value when buying products in bulk. The Procurement Manager confirmed that partnership work was embedded within the procurement process and that all Public Sector Bodies in Wales were members of a Welsh Government Commercial Delivery Team, which typically involves common items of spend.
The Member questioned whether it was mandatory that officers take the lowest bid or if they consider any added value to the tender. The Procurement Manager advised that goods and services were rarely procured based on the lowest bid. It was explained that under the current regulations, tenders were valued on being the ‘most economically advantageous’, which takes into consideration a combination of acquisition cost and the cost of running the service. Members were informed that under the new regulations, the value will be based on the most advantageous, which would allow more scope to be given around added quality and benefits of a provider.
Furthermore, the Member requested that the Committee receive a further update in the future, in respect of the implementation and impact of the changes to the regulations, to which the officer agreed.
The Vice-Chair questioned how often contracts were kept within the South Wales area and queried if opportunities were well advertised to local businesses. The Head of Procurement advised that during the period April 2023 – November 2023, the Council spent approximately £200M; £144M of which was spent in Wales and £134M of which was spent within the South-East Wales Region. Members learned that of the £200M, £52M was spent on businesses with a Rhondda Cynon Taf postcode. In terms of advertisement, the officer informed the Committee that service areas were encouraged to procure locally, where possible, and spoke of a local business directory located on the Council’s website. The officer advised that local businesses were encouraged to sign up to the directory, which links to a dashboard that allows officers to contact the businesses and notify them of relevant adverts. The officer acknowledged that the tendering process for Public Sector contracts could be challenging, in terms of paperwork, and advised that the Council links in with Business Wales and Sell2Wales who can provide businesses with advice and guidance.
The Chair acknowledged the complexity of legislation and questioned whether the EU element is completely removed from the process. The Head of Procurement explained that the new Public Contract Regulations would broadly mirror the same principles of openness and transparency, would continue to allow companies outside of Wales to bid for contracts and would simplify the process to encourage SME’s to bid for contracts.
Following questions on the Contract Procedure Rule presentation, the Service Director of Finance and Improvement Services provided the Governance and Audit Committee with an overview of the Council's Financial Procedure Rules via PowerPoint slides. The Service Director informed the Committee that the purpose of the Financial Procedure Rules is to provide a framework for managing the Authority’s financial affairs.
As part of the presentation, Members were provided with context in respect of the Council’s Scheme of Delegation before being provided with an overview of the key areas within the Financial Procedure Rules:
The Chair thanked the Service Director for the detailed updates to Committee and it was RESOLVED:
1. To note the update.