PAPER F
Committee : RESOURCES SELECT COMMITTEE
Date : 9 OCTOBER 2002
Title : TENDERING AND CONTRACTING PROCESSES - THE COUNCIL'S RESPONSE TO ISSUES ARISING FROM THE BEACH CLEANING INVESTIGATION
REPORT OF THE STRATEGIC DIRECTOR FOR FINANCE AND INFORMATION AND COUNTY TREASURER
SUMMARY/PURPOSE
This report is intended to inform Members of the conclusions that can be drawn from investigations of irregularity in relation to the award of the Council’s beach cleaning contract, highlighting the underlying causes believed to be responsible and to reassure Members of the measures taken to prevent a recurrence.
BACKGROUND
Members will be aware of the allegations of irregularity surrounding the award of the current beach cleaning contract. Related to these allegations was the concern that the Council’s Call-In procedure had been suspended when the Council’s Executive considered the award.
As Members have already been informed by the Strategic Director of Corporate and Environment Services, the subsequent internal investigation highlighted problems in the following areas :
(i) the failure of an employee to declare or register an interest in the tendering and awarding process
(ii) the failure to exclude someone with such a direct conflict of interest from the key parts of the process
(iii) the failure of other employees who were directly involved to recognise the dangers involved and to make the appropriate interventions to mitigate the risks involved.
Clearly, the episode and the subsequent investigation demonstrated that the Council’s procedures were not sufficiently robust to prevent such a situation. This is not to say that the rules were not in place - the Council’s Financial Regulations, its Standing Orders in relation to contracts, and Codes of Conduct all make reference to how potential and actual conflicts of interest should be dealt with. This episode illustrated that there was, in at least one part of the Council, a lack of awareness as to the requirements of the rules and indeed a lack of understanding as to why such requirements are necessary.
A team of officers led by the Monitoring Officer and comprising the Personnel Services Manager and the Compliance Manager, has considered the issues arising and action is being taken as follows :
Awareness of the Rules and their Requirements
• Identifying those policies and procedures which are essential to ensure good corporate governance (Personnel Services Manager by 31 October).
• Evidence of the level of awareness to be included in the annual Development Review Process (Personnel Services Manager by 31 December 2002).
• Awareness of the essential policies and procedures to be included in the Induction process (Personnel Services Manager by 31 December 2002).
• Programme of training on the essential policies and procedures to be established (Personnel Services Manager by 31 December 2002).
• Regular and frequent revisions of rules to be publicised via the Council’s intranet and notification to all users when this occurs (Personnel Services Manager - ongoing).
• Clear guidance to staff and Members explaining what rules mean in practice and how they should be applied (all authors of Council rules when they are next reviewed or sooner if not in the foreseeable future).
Anticipating the need to begin tendering at an earlier stage
This is a problem which has occurred in other areas of the Council and the following action is being taken to address it :
• Identifying the Council’s major procurements and review dates (Procurement Manager by 31 December 202).
• Maintaining such information on a continuous basis (Procurement Manager - ongoing).
• Quarterly reports to Strategic Directors, Executive Portfolio Holder and Chairman of Resources Select Committee on outcomes of procurement activity and forthcoming tendering exercises (Procurement Manager and Compliance Manager by 31 January 2003).
Conflicts of Interest
Although already required to declare conflicts of interest, action needed includes :
• Developing procedures for staff, including definitions, formats and process (Head of Legal and Democratic Services by 30 November 2002).
• Inclusion of training on that procedure in programme of training on essential policies and procedures (Personnel Services Manager by 31 January 2003).
• Ensuring that the system for declaring and recording interests is effective by inclusion in the Audit Plan (Compliance Manager - ongoing).
• Ensuring that when interests have been declared there is robust and effective response to the problem including :
• clear separation of individuals with the conflict from tendering and award decisions.
• safeguards and controls over the officer’s ongoing role in supervising the contract
(Compliance Manager and Service Heads - ongoing).
CONCLUSION
The above represent the issues of principle which have arisen from the Beach Cleaning tendering and contracting situation. The Directors Group is also currently considering the proposed Procurement Strategy which will be available shortly for Members’ scrutiny. Although it is a strategy and therefore of much wider perspective, it does in fact incorporate and deal with many of the issues raised in this report, including :
• forecasting expenditure plans and forthcoming procurement opportunities
• maintaining a current ‘picture’ of what the Council procures and from whom
• greater accountability to Members by regular reporting of procurement activity
• identifying who procures on behalf of the Council
• ensuring that staff and Members have the skills and competencies to perform their procurement roles
• ensuring that staff understand the rules
• demonstrating to all those, both within and outside, that the Council strives in all its procurement activity to achieve openness, integrity and accountability.
In view of its all-embracing nature, Members may like to indicate whether they wish to see the draft strategy before developing their future role in the issues of contracting and tendering.
BACKGROUND PAPERS
The Council’s :
Contract Standing Orders
Financial Procedure Rules
Code of Conduct for Staff
Draft Procurement Strategy
Contact Point : Bob Streets, Compliance Manager, ☎ 823622
JOHN PULSFORD
Strategic Director
Finance and Information and County Treasurer