Agenda, decisions and minutes

1.1 There were no apologies received.

1.2 Apologies for lateness were received on behalf of Cllr Coban.

On occasions part of the Cabinet Procurement and Insourcing Committee meeting may be held in private and will not be open to the public if an item is being considered that is likely to lead to the disclosure of exempt or confidential information. This is in accordance with the Local (Executive Arrangements) (Meetings and Access to Information) (England) Regulations 2012 (the “Regulations”),.

This agenda contains exempt items 10 and 13 as set out following the Exclusion of Press and Public agenda Item 9.

No representations with regard to these have been received.

This is the formal 5 clear day notice under the Regulations to confirm that this Cabinet Procurement and Insourcing Committee meeting will be partly held in private for the reasons set out in this Agenda.  Information) (England) Regulations 2012 (the “Regulations”), members of the public can make representations about why that part of the meeting should be open to the public.

2.1 There were no representations to consider.

Members are invited to consider the guidance which accompanies this agenda and make declarations as appropriate.

3.1 There were no declarations of interest.

The Chair will consider the admission of any late items of Urgent Unrestricted Business which will be considered under the agenda item where they appear.

4.1 There was no urgent business to consider.

At the time of the agenda publication none have been received.

Guidance o submitting a question to the Cabinet Procurement and Insourcing Committee can be found at: https://hackney.gov.uk/ask-a-question/#cabinet

5.1 There were no deputations, petitions or questions to consider.

To confirm the unrestricted minutes of the previous meeting of Cabinet Procurement and Insourcing Committee(CPIC)  held on 4 December 2023

6.1  Members considered the previous unrestricted minutes of the Cabinet

Procurement and Insourcing Committee held on 4 December 2023.

RESOLVED

That the unrestricted minutes of the Cabinet Procurement and Insourcing Committee held on 4 December 2023 be agreed as a true and accurate record of proceedings.

Actions Tracker

6.2  Members noted the Action Tracker contained within the agenda and in response to a query relating to  Reference 7 - CED S286 Extension of Temporary Accommodation Dynamic Purchasing System, the Head of Procurement clarified that officers had reported at the previous meeting that the bulk of the contract sum is payment of rent to landlords and that officers would explore the level of social value that can be delivered in negotiation with the providers.  The Head of Procurement advised that he would liaise with relevant officers and provide an update at a future meeting of the Committee. 

RESOLVED to:

1.  Agree to join the established Dynamic Purchasing System (DPS) managed by London Borough of Newham for the provision of Independent Fostering Agencies.

2.  Agree to redirect the funding allocated to the London Care Services (LCS) Subscription into funding the management fee of the DPS by Newham (currently £6,300 p.a.

Reasons For Decision

5.1  The London Borough of Hackney is seeking agreement to join the London Borough of Newham DPS for the provision of Independent Fostering Agencies and Children’s Homes. The DPS was approved by Newham’s Cabinet in November 2022 and has been live since the 30th of November 2022. The DPS was established by Newham to ensure all care arrangements are procured through a quality assured and procurement compliant process.

5.2  This DPS does not commit the council to any given level of expenditure and there is no guaranteed level of spend with any of the suppliers admitted to the DPS.

5.3  Note: Applications to join the DPS will be administered by LB Newham. Call-offs from the DPS for individual fostering placements will be approved by relevant officers in line with the scheme of delegation.

5.4  London Boroughs of Waltham Forest, Barking and Dagenham, Redbridge, Havering, Tower Hamlets, Greenwich and Milton Keynes City Council have also indicated their intention to join this DPS as they were all previously subscribing members of London Care Placements.

5.5  None of the above Local Authorities (other than Newham) have an existing framework or dynamic purchasing system in place for these contracts and like Hackney rely solely on spot purchasing for all these arrangements.

Alternative Options (Considered and Rejected)

5.50  Do nothing: Suppliers could continue to be spot purchased without a DPS, but there would be a lack of purchasing control and the element of competition to drive cost efficiencies would not influence the price of provision. Spot purchasing does not go far enough in securing better value for money and is time inefficient.

5.51  Operate a standard framework without the use of DPS: This would be a ‘static’ framework, which would not allow new suppliers to enter the framework throughout its lifetime and would therefore reduce the flexibility available in the current and proposed systems.

5.52  Hackney commissions a new framework as a single authority: As referenced in section 5.8, IFAs are reluctant to join individual authority frameworks so there is a high chance of market failure. In addition, this would not support market shaping as a single authority would have limited influence over the market. Hackney would also have to allocate resources and funding to commission this project which would have to be funded from existing, already stretched budgets. Hackney doesn’t currently have the resources necessary to manage a DPS so more than likely would require additional staffing resources to manage this. The length of time needed to complete a procurement exercise does not meet our needs in terms of urgency and getting some control over rising prices since the ending of LCS.

5.53  Join another DPS (eg.  ...  view the full decision text for item 7.

7.1  Maria Zazovskaya, Strategic Resource Manager, introduced the report setting out an opportunity for the Council to join an existing Dynamic Purchasing System (DPS) hosted by the London Borough of Newham for the provision of independent fostering agencies.  The DPS framework would expire on 8 March 2026 with an option to extend for a further 4 years. Independent fostering agencies allowed the Council to fulfil its Corporate parenting duties in particular for children that required specialist support and meet efficiencies for looked after children, and the Council held up to 40% of all foster placements with independent foster agencies. The previous arrangements via London Care Services ceased to operate from 1st of April 2023, and although existing contracts remained valid until the child moved on, these providers were not bound by any formal contractual arrangements or agreement on prices.  This had resulted in many London authorities being inundated with fee reviews and spot purchase price increases and due to legacy prices that had not increased for several years this meant a potential increase of 10% on all existing arrangements for the North and East London authorities. It was emphasised that the DPS did not commit the Council to any given level of expenditure, however, it was in the Council’s interest to make as many arrangements through the contractual DPS, and the London Living Wage would be applied across all providers. Officers were gradually working through the providers on the DPS and at the time of presenting the report Hackney was working with 25 of the 27 providers on the DPS.

7.2  Following the introduction, Members of the Committee asked questions which were responded to as follows:

• There were over 100 independent fostering agencies in London and 25 of the first 27 providers on the list had arrangements in place with the Council 
• The Mockingbird family model had been successfully adopted by the Council’s in-house fostering service as well as many independent fostering agencies and a small group East London authorities and Fostering agencies worked collaboratively to explore more innovation and improve quality and raise awareness of the Mockingbird programme with fostering agencies.
• Officers were currently negotiating with suppliers on the spot purchasing arrangements and they had indicated a willingness to change to the DPS terms and fees, however the fees for specialist services could not be renegotiated but work would be undertaken with other LA to drive improvements in quality which would result in best outcomes for children.
• It was clarified that the DPS had been live for over a year and the Council would be joining midway and the existing terms would cease on 8 March 2026. The system had an annual break clause which allowed the Council to leave the system as well an option to renew for a second term from 2026 to 2030.
• With regard to any lessons learnt from the sudden collapse of the London Council’s arrangements, it was explained that the lack of contract management opportunities and coordination between the 32 London boroughs  ...  view the full minutes text for item 7.

RESOLVED:

To agree the award of the leasehold buildings insurance contract to Insurer A for a period of 3 years (with provision to extend for 2 years) following a 30 day statutory consultation with leaseholders.

Reasons For Decision

5.1  The Council has a legal requirement to procure and maintain a contract of insurance for both its own and leaseholders' interest in leasehold property acquired under the Right To Buy or similar legislation.

5.2  As part of our standard terms of lease the lessor (the Council) has a duty to arrange building insurance for the block, including the demised premises.

Following a Tender exercise, an annually renewable Insurance Contract was incepted with Avid from 1st April 2022 which formed part of a three year Long Term Agreement with the option to extend for a further two years.

However, the successful insurance agent, Avid, provided notice, in early 2023, that from the date of renewal they would no longer be able to fulfil the contract due to the termination of the contractual agreement with Accelerant, who provided Avid’s underwriting capacity. Consequently the policy contract with Avid ended on 31st March 2023 and the Council sought an alternative insurer, on an emergency one-year basis, to meet its legal obligation.

The one year policy was placed with Protector and is due to expire on 31st March 2024.

5.3  Having sufficient insurance cover is a risk transfer mechanism for the Council without which it would have to meet the cost of any claims and would effectively be in breach of its lease obligations as a landlord.

5.4  The full premium is recharged to leaseholders via the existing service charge process managed by Hackney Housing. Purchasing the insurance via a market exercise ensures that the Council can demonstrate that it is seeking to procure the policy on the best available terms.

5.5  Terms have been sought on cover no less comprehensive than those currently in place.  Where it was felt appropriate, based on the claims experience and observations from stakeholders, improvements to the cover provided were requested.

Alternative Options (Considered and Rejected)

5.7  There are currently no feasible alternative options available to the Council.

5.8  Undertaking a full open procurement process was considered the only viable option available to the Council in order to ensure it continued to meet its contractual liabilities from 1 April 2024 and to ensure qualifying leaseholders retained, unbroken, the financial security provided by an appropriate policy.

5.9  Self-Insurance

To completely self-insure the assets and liabilities would create unmanageable levels of uncertainty and financial risk.  It would demand the retention of financial provision(s) substantially over and above the cost of insurance premiums.

5.10  Alternative Insurance Models

The Council’s Insurance Services team and broker, Marsh, continue to review alternative models in the context of the hardening market.

8.1  Jamie Whitehouse, Acting Head of Insurance, introduced the report that outlined the results of the re-tendering of the Council’s Leasehold Buildings Insurance contract following a procurement exercise undertaken during September to November 2023 prior to the expiry of the existing contract on 31 March 2024.  This was a challenging time to procure insurance with market uncertainty leading to increased premiums and the position not expected to change in the immediate future. Officers in conjunction with the Council’s insurance brokers, Marsh, evaluated the 2 bids received and only one had been viable, which was the incumbent insurer and premium cost had increased by 16.5%.  There were no material changes in the policy for the next year.

8.2  Following the introduction, Members of the Committee asked questions which were responded to as follows:

·  With regard to self insurance creating unmanageable levels of uncertainty and financial risk but potential for significant savings to the Council, it was emphasised that due to the nature of insurance it would be a high risk for the Council not to have insurance cover as it would not be insured for a major event.

·  The insurance market was limited and it would not be a viable option for the Council to have hybrid insurance to include catastrophic elements. This option was reviewed with insurers but there was no appetite for the risk in the market.

·  Where the Council is the freeholder, buildings insurance has to be procured by the Council for leasehold properties as per the terms of the lease contracts. The insurance premium is then recharged to leaseholders on an annual basis.

·  It was confirmed that there had been more insurance claims in 2022 compared to 2023 but the claims could increase during the winter period.

·  It was explained that it had been a challenge to get social value from this type of contract and that the social value in terms of the volunteering days offered had been marked as low within the report.  The Acting Head of Insurance undertook to raise social value at the contract implementation meeting.

RESOLVED:

To agree the award of the leasehold buildings insurance contract to Insurer A for a period of 3 years (with provision to extend for 2 years) following a 30 day statutory consultation with leaseholders.

The Decision Notice sets out the reasons for the recommendations, the options considered and the decision.

Note from the Governance Team Leader:

Agenda Item(s) 10 - 13 allows for the consideration of exempt information.

Proposed Resolution:

That the press and public be excluded during discussion of the remaining items on the agenda, on the grounds that they involve the likely disclosure of exempt information as defined in those paragraphs of Part 1 of Schedule 12A of the Local Government Act 1972.

RESOLVED:

THAT the press and public be excluded from the proceedings of the Cabinet Procurement Insourcing Committee during consideration of Exempt items 10 - 13 on the agenda on the grounds that it is likely, in the view of the nature of the business to be transacted, that were members of the public to be present, there would be disclosure of exempt information as defined in paragraph 3 of Schedule 12A to the Local Government Act 1972 as amended.

To confirm the exempt minutes of the previous meeting of Cabinet Procurement and Insourcing Committee held on 4 December 2023 as an accurate record

10.1  Members considered the previous restricted minutes of the Cabinet

Procurement and Insourcing Committee held on 4 December 2023.

RESOLVED

That the restricted minutes of the Cabinet Procurement and Insourcing Committee held on 4 December 2023 be agreed as a true and accurate record of proceedings.

11.1  The exempt appendices relating to item 8 was noted.

12.1  The exempt appendices relating to item 7 was noted.

The Chair will consider the admission of any late items of Urgent Exempt Business

13.1 There was no urgent business to consider.