Wednesday, 27 November 2013

A tale of two sides of the same coin for the CLG procurement inquiry

On Tuesday I discussed the first of the two CLG local government procurement inquiry evidence sessions at Sheffield held on 18 November. I have been following the oral evidence sessions but the Committee will also take into consideration the written evidence submitted.

The earlier session on the 18 November appeared, to me, to be riddled with anecdotal evidence and unreliable answers to poorly framed questions. Nevertheless, it did suggest that there is an issue with stakeholders perception of what happens in local government procurement. It also suggested that the 8 Principles of Good Commissioning and the Compact are Whitehall theory as opposed to what the market appears to experience in Yorkshire and Humberside. Surprisingly the Committee don't probe these areas.

The second session provided an opportunity to hear from the other side of the coin, two councillors from Sheffield, Sheffield's Director of Commercial Services (also the regional lead on procurement) and  two representatives from YPO.

This session was unusual in that the evidence of councillors was taken. However, we only heard from two cabinet members and there weren't even any questions on how Overview & Scrutiny members might be engaged in strategic procurement.

We learnt that Sheffield, thankfully have moved from a position of building cost inflators into contracts. I have to say I have never before come across a system where contractors are guaranteed annual price increases.
Rise and fall contracts are a good option but need CPOs to chase the 'falls' too. Rise only contacts are beyond me. Thankfully, in Sheffield's case, we learnt they are a thing of the past - I just hope no one is using such contracts anywhere else.

We heard that only 40% of procurement staff in Yorkshire and Humberside are CIPS qualified and there is a concern that cuts to training budgets may lead to a lack of investment in getting staff to CIPS level. I would liked to have heard why councils are not recruiting MCIPS qualified staff but, having said that, on the plus side, I think the councils are to be congratulated for making the investment. It would have been interesting though to have heard what other training options Y&H have appraised and how training needs analysis has been approached?

The usual question on the benefits of purchasing from a centralised body, either regional or national, was asked. Sheffield gave a good account of themselves answering that they include that option within their sourcing strategies but there does appear to be something odd that this comes across as the only question consistently asked of witnesses.

The issue raised in the earlier session of the formula error in the scoring spreadsheet was referred to once again, in passing, but we didn't learn how many contracts had been affected, and the impact award due diligence. Many of you will recognise this as an echo of the Rail Franchise debacle but it should also be a warning to go back and check your own template formulae - clearly some hadn't which should have been part of procurement risk management.

Fraud was once again discussed but yet again no evidence of any having been identified. If I was the Committee I would be asking myself why is that message being played back while the annual loss in councils due to procurement fraud is thought to be £876m. Think about it, can you identify the occasions when you personally have been duped? Isn't that part of the problem - how would you know? But shouldn't the emphasis be on what are the appropriate protections?

The Committee heard of some impressive initiatives being pursued by Sheffield but never took the opportunity to ask councillors what drives procurement improvement from their point of view, nor lessons learnt from the former National Procurement Strategy, nor the current position on the use of eProcurement, nor reconciling the contradictory evidence from the earlier session.

As the evidence sessions start to draw to a close I hope it is not too late for the Committee to develop a checklist of questions which still need to be asked and. assertions and anecdotes which continue to lack validation.

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