PAPER C
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RESOURCES SELECT COMMITTEE – 7 APRIL 2005 USE OF CONSULTANTS REPORT OF THE HEAD OF SELECT COMMITTEE AND REVIEW TEAM |
REASON FOR SELECT COMMITTEE CONSIDERATION
Concern was expressed at the Select Committee meeting in July 2004 over the number of consultants being taken on by the Council and the public perception of their use. A review was agreed to consider the issues involved.
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ACTION REQUIRED BY THE SELECT COMMITTEE
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BACKGROUND
The review was to enable a clearer understanding of why and when the Council utilised consultants and the processes involved. It also looked at whether a system should be implemented by which different departments experiences in using specific consultants could be shared across the Council.
The first issue that had to be clarified was the definition of a consultant. There is no specific meaning within the glossary of terms in the Council’s Standing Orders relating to Contracts. It was however believed that there was a distinction between a contractor, who undertook a physical element of work by way of building or supply of goods, and a consultant which provided advice to the Council particularly of a strategic or specialist nature.
To gain an overview of the processes and procedures utilised by various Directorates, staff from the review team met with key officers to obtain basic information on the main reason for the appointment of consultants and how these were selected. The main reason given was that the Council did not have the necessary skills in house. This is predominantly because the work is only required occasionally or is a temporary nature where it would not be appropriate to employ permanent staff with the necessary skills and experience. A second reason quoted was for one off large projects. Additionally a small proportion of consultancy work was to enable the Council to obtain an independent view on a specific issue, or a second opinion, often within short time scales.
About 80% of the Council’s spend on consultants was to support the delivery of the Capital Programme. Some of the circumstances in which consultants are used are as follows:
· Architects – the Council externalised its architects service many years ago, hence if we require architectural services for design and surveying we employ consultants to provide the necessary expertise
· Civil Engineers – by far the greatest amount the Council pays year on year for consultancy services is for major engineering projects. Because of the geology of the Isle of Wight the services of geotechnical consultants are often required to provide advice and design, because the required expertise is not available in-house and it is more cost effective to employ consultants with wider experience of geotechnical issues. In other cases, consultant engineers may be used in circumstances where, whilst in-house expertise is available, the capacity to deal with a range of projects within a specific time frame is insufficient
· Information Technology – consultants will be engaged where new systems are implemented and specific advice and expertise is necessary for installation and integration with other systems
· Legal Services – the Council does have an in-house Legal Services team, however external legal service providers may be engaged in circumstances where specific legal advice is required for which the expertise is not available internally. A significant proportion of this expenditure results from the costs of seeking a legal opinion from Counsel when necessary
· Professional Advice – consultants may be employed by the Council for a range of other issues, both from a corporate and service perspective. In some cases use of consultants will be for similar reasons to those given above i.e. expertise not available in-house, more cost effective to engage a consultant with broader experience of specific issues. However it may also be the case, particularly when corporate issues are being considered, that the engagement of an external consultant provides greater value to the exercise in terms of obtaining an objective and independent viewpoint. Examples of that approach during 2003-04 would be costs associated with the Peer Review and the engagement of the Improvement and Development Agency to provide advice on progress being made with the Modernising Agenda and service improvement generally.
In summary, the services of consultants are procured when it is more cost effective to buy in advice, rather than to recruit new staff or to train and re-deploy existing staff.
Whilst there is no specific code of practice for determining when to use external consultants, existing Standing Orders as to Contracts do provide for how they will be procured:
Up to £5,000 - minimum 1 written quotation or published catalogue price.
£5,001 - £75,000 - minimum 3 written quotations.
£75,000 and above - full tender process.
£154,000 and above - EC tender process.
Standing Orders as to Contracts also stipulate that efforts should be given to aggregating purchases to avoid any attempt to avoid using the proper procedures or avoid complying with EC Directives.
The choice of consultants can be restricted by who can do the work if it is of a specialised nature. Experience of past performance is taken into account, along with recommendations from other users including networking with colleagues from other Authorities. It was noted that in some specialised areas consultants having a knowledge of the Council were more likely to be appointed for subsequent contracts.
With regard to monitoring a variety of methods are utilised by Council officers a standard consultant performance monitoring questionnaire is used. In most cases a tight specification for the work is initially drawn up against which performance outcomes are measured.
Most consultancy work is in a specialism relevant to a particular department. This meant that there is little scope for sharing experiences within the Council. This can however lead to inconsistencies in the performance management of consultants at all levels.
The appointment of consultants who are engaged in work on projects involving other partners adds to the complexity of appointment and monitoring.
Separately from the work being undertaken by the Select Committee, Contract Standing Orders are being reviewed, for debate by Full Council early in the life of the new Council. This provides an opportunity for the Select Committee to make recommendations to Full Council, It may be that, for example, Contract Standing orders could have a specific paragraph requiring that those procuring consultancy services (at a cost of, say, over £5,000) set out, in the record of their decision to do so, why it is more cost effective to procure that expertise externally, rather than internally.
A review of the methods by which consultants are procured is part of the audit plan for the coming year. The outcome of internal audit activity is normally reported to the Audit Panel, however the Select Committee may wish to add a line of enquiry to its workplan to enable it to consider the outcome of that work.
RELEVANT PLANS, POLICIES, STRATEGIES AND PERFORMANCE INDICATORS
There are no policies or codes of practice regarding the specific use of consultants, although Financial Regulations and Standing Orders as to Contracts regulate the process for selection and payment.
CONSULTATION PROCESS
Interviews were held with staff and Heads of Service on the areas of the Council which make use of consultants.
FINANCIAL, LEGAL, CRIME AND DISORDER IMPLICATIONS
There were no financial implications arising from this review.
BACKGROUND PAPERS
None.
Contact Point : Don Roe ( 82 3687 e-mail [email protected]
Paul Thistlewood ( 823285 e-mail [email protected]
ALISTAIR DRAIN
Head of Select Committee and Review Team