Agenda item

6.1  Members gave consideration to the a report on the implementation of the Council’s Sustainable Procurement Strategy 2018-2022 as well as a copy of the Strategy document, the associated Action Plan and the template document for PRIMAS (Procurement Impact Assessment).

6.2  The Chair welcomed for this item: Cllr Rebecca Rennison (RR)(Cabinet Member for Finance and Housing Needs), Rotimi Ajilore (RA) (Head of Procurement), Dawn Cafferty (DC) (Strategic Procurement Manager) and Merle Ferguson (MF) (Procurement Strategy and System Lead).

6.3  The Chair stated that she had also invited some external guests whose organisations recently had experience of the Council’s procurement system and she welcomed: Judith Davey (JD) (Chief Executive of The Advocacy Project) and Caroline Pope (CP) (Interim Chief Executive of Carers First).

6.4  RA took members through the report in detail.  He stated that this was the Council’s third procurement strategy and the Council had a track record of ensuring best practice in this area.  The Strategy had three themes: Procuring for Green, Procuring for Better Society and Procuring for Fair Delivery.  The second included how we get local businesses to better engage.  He reminded Members that within public procurement they are of course constrained by legislation and national guidance.

6.5  The Chair stated that she would divide the questions according to the three themes: Procuring for Green, Procuring for Better Society and Procuring for Fair Delivery.

  Members asked detailed questions and in the subsequent discussion the following points were noted:

6.6  Procuring for Green

  (a) Members asked how national standards affected the local work and how they might be improved.  They also asked how satisfactory the metrics currently in use were.  They also commented that the more criteria which are put in place by the Council’s Procurement Team the more difficult it then becomes for local SMEs and therefore they asked how these ambitions can be balanced against the need to better support local enterprise.  RA detailed how he works closely with the Cabinet member with responsibility for Sustainability on how the Council can best replicate national standards locally.  The current commitments for example to deliver national standards on the ‘procuring green’ strand would be a stretch for the Council. RR added that at Cabinet Procurement Committee Cllr Burk was very strict on ensuring that all contracts passed are ‘procuring green’ and this could range from considering a different type of fleet for the waste services vehicles down to the fuel type being used in all vehicles.  With one particular procurement the Council could only source one provider in the whole country who could deliver what was being asked for.  She added that while a lot can be achieved locally much still cannot.  In those instances they then look at how to break down contracts into constituent parts which might then also give a chance to local suppliers.  The invitation to tender is firstly carefully reviewed and then they closely examine all the tenders which come in and ‘procuring green’ is always at the forefront of their considerations.

  (b) Members expressed a concern that national standards were not driving the Council to be as sustainable as it could be and that it was important to consider that national standards are a ceiling and not a floor.  They asked whether local metrics are challenging enough for example regarding achieving net zero emissions by 2050.  RA replied that within the constraints placed on them they always worked to raise the Council’s ambitions on sustainability targets. 

  (c) Members commented that while Hackney was at the forefront in some areas, such as eliminating single use plastics from estates, on other areas, such as attaining zero tail pipe emissions by 2025, there was a greater challenge.  There needs to be faster progress on installing battery chargers for Electric Vehicles at scale the Members added.  They commented that the government had stated that only electric vehicles should be sold by 2040 but this needs to be achieved much earlier.  RA responded that even if the ambition on Electric Vehicles was met, unfortunately the market was not sufficiently evolved enough as yet to allow the Council to procure chargers and EVs at scale.

  (d) Members asked for clarity on whether there was in effect a ‘green document’ attached to each procurement area which sets out what currently isn’t possible now but could be available in 5 years’ time.  Does it set out ‘how can this procurement process be as green as possible, do the legal processes allow it and what “mind mapping” takes place on looking ahead to what might be possible.

RA explained the all officers now complete a Procurement Impact Assessment on all contracts and they ask what needs to be added from day one and this then feeds into the design of the ‘invitation to tender’.  RR added that this Procurement Strategy represents a start and ensures that the conversation focuses on green aspects from the outset so for example if the Council is procuring vehicles how can the vehicles have a long life, what fuel should the use, what is the situation re bio-diesel etc.  She added that they totally took on board the concerns of Members here that these questions needed to be flipped from the negative and that there needs to be more ‘mind mapping’ on what is coming downstream and how this might impact on what is procured next.

  (e) Members asked how the Procurement Impact Assessment (PRIMAS) on Procuring Green operated in relation to SMEs for contracts of less than £100k.  RA acknowledged that the most progress on Procuring Green was obviously being made on contracts larger than £100k but that they made every effort to apply the same criteria to smaller contracts also where it’s practical.  The team has to work within the resources and time it has available. 

6.7  Procuring for Fair Delivery – case histories from The Advocacy Project and Carers First

(a)  RA and DC took members through the detail of the Procurement for Fair Delivery strand.  RA highlighted the work they had been doing to tackle modern slavery by raising awareness of how it relates to procurement processes.  There has also been progress on ensuring the workforces have remuneration that allows for proper work-life balance. DC highlighted the work she was doing with HCVS.  They had hosted on their website a survey of their members on procurement issues and subsequently a workshop had been held in May where 18 organisations had attended and the Council had received some excellent feedback on delivering social value in their contracting.  They had built on this work by organising support sessions on the Council’s E-Tendering system.  They had also worked on new guidance for commissioners who work regularly with the VCS as well as promoting use of local options for lower value contracts.

(b)  Judith Davey (JD) (CE of The Advocacy Project) described their work.  They are the lead provider for the Advocacy Service and sub-contract to 7 organisations such as Bikur Cholim, Muslim Community Centre and the Vietnamese Mental Health project.  They are running a pilot project on Personal Health Budgets with lots of different work being procured.  They are very supportive of the Council’s work on ‘Pathways to Employment’ which utilises the lived experience of users.  40% of their staff also have lived experience of the services being supported.  She also commended the Council’s work on ensuring the London Living Wage is paid by suppliers.  In their organisation they pay service users who are Trustees for their service on their board.  She widely welcomed the new Sustainable Procurement Strategy but it would be judged on implementation she added.  The Procurement for a Better Society was a real strength but the Procurement for Fair Delivery was proving more problematic although it was a thoughtful approach and sought to build capacity.  She added that budgets for non-statutory advocacy were diminishing and so this needed to be built into their contract so that can in turn build capacity. She added that they worked across ten boroughs but commended the positive approach of Hackney.  They were helping smaller local organisation gain the Advocacy Quality Mark and added that they and the Council were jointly nominated for an award for their work in this area.

(c) In terms of the challenges or difficulties around procurement JD stated that the public needed greater help in accessing the procurement portals.  Bid writing was a specialist job and not all organisations have the capacity or funding to do this.  ‘Payment by Results’ was also proving problematic as it was very tough on small organisations.  Many would not have the appetite for risk or the cash flow to bid for those contracts and so more work needed to be done here.  Another challenge was out of borough provision.  They worked with Hackney residents who had been placed in Devon and Darlington for example and the time and expense of traveling to those had proved a burden as they can’t recover these travel costs and the volume of out of borough clients had been much higher than anticipated. Another challenge was that when The Advocacy Project took on their Hackney contract, 18 months previously, the previous provider hadn’t completed the necessary TUPE processes and this had seriously impacted on their performance during the first three months of their operation.  They were asking the Council for financial compensation for this and were awaiting acknowledgement from Complaints Department.

(d)  Caroline Pope (CP) (Interim CE of Carers First) described the work of Carers First. She added that they had started delivering their contract the previous week.  Although not based in the borough their staff who work here were.  She also commented that handling complex TUPE arrangements were proving a major turn off in the sector, especially for smaller charities.  When studying an Invitation to Tender and seeing that it would involve complex TUPE issues many small charities were scared off from bidding.  Another area of concern was the complexity of the Pre Questionnaire Forms which for many small charities can appear quite intimidating. 

6.8  Members asked questions and the following was noted:

  (a) Chair of Living in Hackney SC asked what support was given to smaller businesses and also what leverage if any the Council had on ensuring subcontracting was local.  She commented that in the case of construction companies who are contracted by the Council there was a complex web of sub-contracting and it was often difficult to ascertain where responsibility lay.

RA replied that they run many workshops with local providers and a lot of time is spent supporting them with using the procurement portal.  With particular contracts they identify local businesses who could bid and invite them in for discussions and subsequently encourage them to tender.  They also encourage the larger suppliers where possible to work with local suppliers and a large proportion of the council spend is spent locally.

(b)  Chair of Skills Economy and Growth SC stated that their workshop with local BME businesses had revealed that many had felt that structural barriers on language and communication remain in terms of securing contracts with the council and he asked how the department reaches out to small businesses who might not have the time to attend workshops and whether they were confident they were using the correct metrics.  RA replied that in relation to specialist procurement they work very closely from the outset with the service area.  The Head of Service asks them to support them and helps them run it.  They then encourage the service area to engage actively with the specific market so there is interactive engagement with possible suppliers at an early point.  The Chair of Skills Economy and Growth SC asked whether the department gathered data on what level of experience the bidders might have as there appeared to be no match between what the local BME SMEs told the Commission and the strategic level information in the documents.

RA explained that the language used in contracts had to comply with government guidance on public procurement.  There was an opportunity for all suppliers to seek clarification and this was built into the system at a number of points.  As regards the metrics used these have been well tested industry wide over the years. 

(c) Members asked why the Council did not make it a requirement for suppliers to recognise trade unions.  RR replied that they had sought legal advice on this and the law does not permit it so they cannot push this further.  RA added that they state to suppliers that it’s an expectation on them that the engage with unions but they cannot compel them. 

(d) Chair of Health in Hackney SC stated that in the local STP area there were moves to increase the use of Payment by Results contracts and asked whether this would impact on the council.  He also commented that because of the increased use of out of borough provision contractors were really being set up to fail here, giving the example of providers supporting Looked After Children who had been badly rated by the regulator because of the complexity of out of borough dentistry provision for the children concerned.  The out of borough provision had exacerbated the problem.  He also asked about whether the volume of paperwork required on small businesses and charities was proportionate. 

RA replied that Payment by Results was not a norm in the sector and in any case the contract would be initially be based on the experience of the previous contract.  He undertook to look at this area more closely.

RA replied that helping providers who support out of borough social care clients was a challenge.  JD added that many of the clients they work with in this context have no mental capacity and the numbers here are rising.  RA stated that he would take this issue back to the colleagues in Adult Social Care. 

(e) Chair of CYP SC asked whether the department was drilling down sufficiently on the local employers and what they can offer and in particular local employers so they can better reach young people and in particular groups such as care leavers who are over- represented among the unemployed.

MF replied that the department was working very closely with the local VCS and has asked the sector to help them shape the local provider offer.  They had made a commitment to resource this activity and they relied on people on the ground to tell them where they could make a greater difference.  They were always open to new ideas.  She added that the front end of the procurement process was not as onerous on suppliers as many perceived it and most of the burden was later at the payments end of the process.  RA added that on the issue of reaching unemployed young people they would go back and look at their processes to see how this could be addressed within the context of procurement.  RR added that they encouraged all suppliers to use Hackney Works and there was a balance to be struck between how much the council could encourage and how much it could prescribe.  She added that sustainability of apprenticeships was a particular challenge for SMEs and more needed to be done on this. 

(f) Chair of Audit stated that the challenge with procurement was that it was also about supervision and oversight over the longer term.  How the Council oversees both external and internal contracts is vital and the current capacity in-house to monitor is not equally strong in every area therefore there was a need to think about front end capacity.  There was a need to ensure that there was sufficient capacity for running contracts and that the necessary commercial skills were in place.  He stated that his committee had been visited by the Institute for Government and they had stated that Hackney had the best policy for assessing in-sourcing.

RA added that they have expanded contract management training across the whole council there was a mix of two day training to enhance contract management skills and that they are looking to bring in contract management system to give a global view of all contracts so that Directors are then enabled to dig down at the performance data.

In-sourcing

6.9  RR introduced this section by stating that in-sourcing was a manifesto commitment.  It was easy to make headline commitments but it was then incredibly challenging in terms of where you locate the insourced service so that it remains competitive and sustainable.  The Cabinet was currently giving itself time to think through what a transition period might look like.  Also the department that commissions a service might not necessarily be the department which would end up managing it.  The aim was to have a public facing document which sets out a Hackney Plan for insourcing.  It was easy to bring in smaller contracts but bringing in the large ones was very difficult.  Another vital consideration was that if the Council just focused on easy pickings and in-sourced a number of small local services then that might turn off the tap to local communities and small local businesses and this had to be avoided.  The plan was to have a workshop for Members on this later in the autumn.

6.10  Members commented that a written update on what services had already been brought in would be helpful and that it would be interesting to see the test which was being used.    RR stated that this work was still on going.  Services could be brought in for a whole variety of reasons but it’s not possible just to drag and drop a service into the Council.  Services have already been asked to look at insourcing as an option. Some had gone for a mixed model.  There was a fantastic example in Housing Repairs, she added, where they had identified a long term direction of travel for this service. 

6.11  Members asked if there could be more Member engagement on this and if the Panel could have a session with a case study which they could go through.  RA replied that the service was in the process of developing guidance and Members could see a draft of this.  If a contract was ending within one year the department would examine whether it was viable to bring it in house.  On any contract due to end in 12-18 months, the default was now to examine whether it could come in.  The Service department then needed to demonstrate why it might be impossible to bring it in.  Home Care was a very big and complex contract for example and so was being looked at very closely.