Agenda item

CEO 1638

The report providing guidance for staff relating to the outsourcing of services, and how to proceed when contracts were due to end, was written and presented by Lesley Moore, Director of Commissioning.

The Director highlighted that if officers followed the Gateway tender process correctly, then most of the guidance written in the report would be followed as a matter of course. The relevant guidance documents were available via the ‘Managers’ Toolkit’.

The Committee were briefed that it was fundamental to have a clearunderstanding of the cost base and what one was hoping to achieve at the onset of the process.

The Director informed the Committee that she had developed detailed training models for both contract management and contract monitoring. She had delivered many training sessions herself, and online training modules were available to those staff that had missed her training sessions.

The Chairman asked if the training was mandatory. It was confirmed that training was now mandatory in the light of audit issues that had been identified around contract management; training and guidance had been issued to make the job easier. She informed the Committee that it was now the case that 56-58 officers had to attend regular commissioning meetings with her. This functioned as a forum where questions and issues could be raised and where officers could speak about lessons learnt from real contracting exercises. The Director was confident that the end result would be a well trained staff group.

The Chairman was pleased with the training that had been put in place. He stated that the most important thing for officers to bear in mind was that they must ask for help in plenty of time if they were getting into difficulties.

The Chairman felt that the biggest risk connected to setting up contracts lay in working out the correct specifications and KPIs. It was mentioned that having too many KPIs would be a problem, and that the ideal number of KPIs would probably be about 8. 

The report stated that if a Scheme Employer was considering outsourcing a function to a contractor and transferring staff under TUPE, it was imperative that they consider their pension and redundancy obligations before going out to tender. The Council’s Pensions Manager would provide a suite of documents for use in tenders, and the Pensions Manager would need to be involved in any discussions with potential contractors. 

Members noted that property issues would also need to be taken into account. Consideration would need to be applied to where staff would be based, and other issues like who would be responsible for site maintenance and site insurance.

The final matter to be considered was that of the specification. It was important that the specification of the contract was clearly understood and agreed by both parties. The contract specification should allow for continuous improvement, and ongoing discussions were important.

A Member asked that if the current training and guidance had been available previously, would LBB have experienced the same problems with the Amey and Cushman contract and the Vinci contract. The Director stated that issues could still happen even with good guidance in place. Everything to do with contracts was now tighter, lessons had been learnt, and a Commissioning Board scrutinised all contracts in excess of £250k.

A Member referred to the guidance in the report where it stated ‘We really need to agree a standard contract’. He expressed concern over possible rigidity if only standard contracts were used. The Director explained that the contracts would contain standard terms and conditions which were required, but that the specifications would vary. Jacqueline Banton (LBB Legal Services) confirmed that contracts would differ depending on the type and value of the contract

A Member asked if LBB’s due diligence procedures would change in the light of the demise of Carillion. The Director responded that 5 different financial evaluations were undertaken before LBB entered into a contractual agreement. Additionally, contract managers received yearly notifications to remind them to check the financial position of contractors with Companies’ House. 

RESOLVED that the guidance note for staff concerning the outsourcing of services be agreed.