Report of the Head of Integrated Commissioning and Procurement and Strategic Lead Integrated Commissioning attached

This report describes how major contracts are managed and the key considerations for the council when looking at future commissioning options, including insourcing versus outsourcing decisions, and the associated capacity the council would need in place to take a major contract back in house either as a result of a procurement decision or to address market failure.

The Committee considered a report of the Head of Integrated Commissioning and Procurementand Strategic Lead Integrated Commissioning, which provided information on how major contracts were managed and the key considerations for the Council when looking at future commissioning options.

Key points and theme of the report included:-

·                The approach to contract management of major contracts;

·                Key considerations for future commissioning;

·                Main and current issues connected to contract management and commissioning, including:-

·                Policy changes;

·                Market risk;

·                Inflation and financial management;

·                Contract management skill development;

·Complex procurements should include an appraisal of delivery options including insourcing;

·                Implementation complications;

·                Retention of expertise;

·                Back-office support requirements; and

·                Urgent insourcing as a result of supplier or market failure

Some of the key points and queries that arose from the Committee’s discussions were:-

·                The impact of inflation on services such as school meals and care work and how other costs besides rising fuel prices will impact these;

·                Sought assurance that the Council would support local SMEs at risk of closure;

·                If detailed analysis of the delivery models which formed part of the decision to let the waste collection and street cleaning services to a contractor could be shared, with specific reference to the contract with Biffa Waste Management

·                Whether there was any learning from other authorities that have insourced services that the Council could benefit from; and

·                Whether an officer Major Contracts Oversight Board should be established with the Executive Member for Finance chairing the Board and the ability to co-opt other Executive Members to chair where contracts fall within their portfolio.

The Strategic Lead for Integrated Commissioning explained that the Council recognised the pressures currently experienced by suppliers and were willing to consider contract variations due to any price increase and not exclusively as a result of fuel price increase. Suppliers would be expected to keep costs under review and, should fuel prices decrease, it could be possible to renegotiate prices downwards. He advised that, as part of a national “true cost of care” exercise, the Manchester Local Care Organisation was working with the social care market to understand the costs of care, including food, energy, transport and wages.

It was explained that the Council would support SMEs with the focus of continuing to provide vital public services for residents and that they would expect services to have business continuity plans in place. Assurances were also provided that the Council would work with suppliers at risk of closure to understand the nature of the issue and to help with potential solutions.

The Director of Commercial and Operations advised that the details of the Biffa Waste Management contract had been shared with members previously but that he would provide a response to the member outside of the meeting.

The Executive Member for Finance and resources welcomed the recommendation to establish a Major Contracts Oversight Board and commented that this would help to ensure the Council provides good services and value-for-money for residents.

Decision

That the Committee

(1)      notes the report and

(2)      recommends the creation of a Major Contracts Oversight Board to be made up of officers and chaired by the Executive Member for Finance. The proposed purpose of this Board would be to evaluate all major contracts with the potential to co-opt other Executive Members to chair the board where a contract falls within their portfolio.

(3)      recommends that the City Council establishes which other councils are working on projects to bring services back ‘in-house’ and to learn from their experiences.