The Chair welcomed members of the public to the meeting.  He outlined the call-in procedure and introduced Councillor J Green, the lead signatory to the call-in notice, and Councillor C Meaden, a Cabinet Member and the relevant Portfolio Holder.

Councillor J Williams requested that the Press and Public be excluded from the meeting so that the Committee could discuss recent developments in respect of the Serious Fraud Office being requested to examine one of the Council’s contracts and its possible implications.  The Chair informed that this was about another matter and the level of information available at the moment was limited.  However, Councillor Williams was of the view that there was a clear cross over between that contract and the Parks and Countryside Services Procurement Exercise (PACSPE) which was under consideration by the Committee and the questions he wanted to ask would cover both of these matters. 

Consequently, the Committee was asked if it wished to accede to the request and it was

RESOLVED:

That, under section 100 (A) (4) of the Local Government Act 1972, the public be excluded from the meeting during consideration of the following item of business on the grounds that it involves the likely disclosure of exempt information as defined by paragraph 3 of Part I of Schedule 12A (as amended) to that Act. The Public Interest test has been applied and favours exclusion.

The Committee asked the Director of Law, HR and Asset Management for guidance and advice in respect of recent events.  The Director set out the current situation in respect of this matter and informed that he could see no reason for the Committee not to proceed with the consideration, in public, of the Cabinet decision on the PACSPE which had been called in.  If in so doing Members considered it necessary later to seek further legal advice this may be provided, in private, by passing a resolution to exclude the press and public from the meeting again, if it was considered appropriate.

RESOLVED:

That the public be re-admitted to the meeting.

Members are asked to consider whether they have personal or prejudicial interests in connection with any items on this agenda and, if so, to declare them and state what they are.

Members are reminded that they should also declare, pursuant to paragraph 18 of the Overview and Scrutiny Procedure Rules, whether they are subject to a party whip in connection with any items to be considered and, if so, to declare it and state the nature of the whipping arrangement.

Councillors R Abbey, C Jones, C Meaden, J Walsh and J Williams each declared a personal interest in respect of the Cabinet’s decision which had been called in by virtue of their trade union membership.

Councillor J Green, Leader of the Conservative Group, outlined the reasons for his opposition to the Cabinet’s decision not to let the PACSPE contract to an external contractor but to retain these services in house, as set out in the call-in notice.  It was noted that as some elements of the grounds for call-in were commercially sensitive, the Director of Law, HR and Asset Management had redacted those specific parts.  However, the full text of the call-in was contained within Part 2 of the agenda.

Councillor Green referred particularly to advice provided by the District Auditor who had recently qualified the Value for Money statement in the Council’s Annual Governance Report.  The District Auditor had stated in respect of the Highways and Engineering Services Procurement Exercise (HESPE) contract, which had been in operation for the last two and a half years, that the Council was not able to provide information on activity and performance to determine whether it was receiving better value for the money spent.  She had informed that

“there are risks in letting a 10 year contract if there is only very limited information on the costs and activities levels of the existing service and Members should be made aware of this increased risk.  This is because there is nothing to monitor against when assessing whether or not letting the contract has delivered better value for money.”

Councillor Green informed that he had attended the Cabinet meeting when the decision on the PACSPE had been made.  He  had subsequently taken the opportunity to question the District Auditor, asking her if she had considered the Gateway process that had been used during the procurement exercise, or seen the procurement documentation and the business case.  She had informed that she had not; and that she had not been suggesting that the Council should not go ahead with the procurement exercise.  She had merely wanted to point out the risks associated with letting a contract for PACSPE.  Councillor Green believed that no thought had been given to mitigating the risks.

Councillor Green reported that he had serious concerns over the way the Cabinet had made its decision and he believed that it exposed the Council to the risk of a judicial review.  The procurement process had been thorough and the Project Board had been very focused on value for money.  The decision which the Cabinet had made could suggest that the procurement process which the Council had used may not have been complete.

Project Board

David Green  Director of Technical Services

Jim Lester  Head of Cultural Services

Jenny Spick  Chief Accountant

Ray Williams  Corporate Procurement Manager

Mark Gandy  Group Auditor

Gateway Reviews

Mark Smith  Deputy Director of Technical Services

Councillor David Elderton  Chair 2010/2011

  PACSPE Members Steering Group

Councillor Chris Meaden  Cabinet Member

  Culture, Tourism and Leisure

  (Proposer of Cabinet Motion)

Chris Rance  Atkins

Malcolm Burns  Atkins

Ian Halton  Director, Capita Symonds

Professor Robert Lee  Friends Forum Steering Group

Martin Harrison Friends Forum Steering Group

Mr Ian Halton, Director, Capita Symonds

Mr Halton talked the Committee through the Business Case process.  He informed, through questioning, that during the PACSPE process account had been taken of the objectives and aspirations of the Council (which were very similar to those of other local authorities).  It was noted that obtaining value for money had been very important, as was bringing about much needed improvements to the facilities within the Council’s Parks and Countryside Service.  This would involve identifying funding to improve equipment and to assist staff training and development.  A benchmarking exercise had been carried out using both similar and neighbouring authorities.  This exercise had considered service delivery, taking on board the views and opinions of internal staff and contractors.  Mr Halton reported that an options appraisal had been undertaken.  He also detailed the six procurement options that had been considered, the SWOT analysis carried out, along with the estimated costs, quality issues and the flexibility in the contract to make efficiency savings.

Members were told by Mr Halton that he had been led to believe that an in house bid had been ruled out because it had been considered that the Council did not have the staff with the expertise required to develop it; and there would have been a problem with service delivery if staff had concentrated their energies on drawing up a bid.  Mr Halton informed that the Project Board had told him that in house staff did not have the appetite to draw up a bid.

Mr David Green, Director of Technical Services

Mr Green reported that he would have been happy to run an in house service but the brief had not included an in house option.  However there are significant challenges to overcome and it will probably take two years to provide a broadly comparable service to that which an external provider could provide from shortly after the commencement of the contract.  Initial discussions had taken place with the trade unions who recognised that working practices would have had to change significantly.  They had set out their ideas of how working practises could change.  There had been an informal understanding between the two parties about what would be required.  Mr Green reported that he was of the opinion that the Council’s staff could deliver a broadly comparable service but, realistically, it required change, investment and time.  Mr Green said that the PACSPE had been a big, complicated procurement exercise and that was why a Project Board had been established.  The Board was made up of those officers with the appropriate skills from within the Council.  A business case had been developed which included three options for service delivery in house; outside; or a combination of both.  This had been presented along with a report to the Cabinet.  The report had set out the advantages and disadvantages (which had been scored) and the likely efficiencies.  Mr Green also reported, when questioned about whether the staff had the ability to draw up an in-house  ...  view the full minutes text for item 36.

Councillor Steve Foulkes  Leader of the Council

Bill Norman  Director of Law, HR and Asset Management

Dave green  Director of Technical Services

Ian Coleman  Deputy Chief Executive and Director of Finance

Geoff Bradfield  Wirral UNISON

Councillor Steve Foulkes, Leader of the Council

Councillor Foulkes drew attention to the District Auditor’s criticism over the HESPE contract that the Council was not able to provide information on activity and performance to determine whether it was receiving better value for the money spent and informed that this was reason enough for her not to let the PACSPE contract.  He informed that he did not want the District Auditor issuing a qualified opinion that drew attention to weaknesses identified in the arrangements for securing value for money in respect of a PACSPE contract.  Councillor Foulkes considered that to let such a contract would have been an unwise decision, especially as there was less information available in respect of unit costs for the PACSPE than there had been for the HESPE.

Bill Norman, Director of Law, HR and Asset Management

The Director of Law, HR and Asset Management was asked whether, in his view, the decision taken not to award the PACSPE contract but to continue to run the service in house was reasonable or unreasonable.  He stated that it was reasonable and that the comments of the District Auditor needed to be considered in the light of Anna Klonowski’s supplementary report on the Council’s Governance Arrangements: Refresh and Renew following her independent review of the Council’s response to claims made by the whistleblower, Mr Martin Morton (and others).  The Corporate Governance Report had identified a number of serious happenings over recent years, namely:

(A)  A Public Interest Report,

(B)  Two reports under the Public Interest Disclosure Act,

(C)  A “red flag” raised by the Audit Commission in relation to Adult Social Services Data,

(D)  A Care Quality Commission (CQC) Report relating to issues raised by the “red flag”,

(E)  Concerns raised by the Council’s external auditors, and

(F)  A number of issues raised by the Director of Finance in the Council’s own corporate governance statements.

The Director told the Committee that the District Auditor’s specific qualification around value for money in relation to the HESPE contract was comparable to the issues listed above.  It was a very rare occurrence for a specific qualification to be issued on a major procurement exercise.  The inference he had taken from this was that there had been insufficient base information available to satisfy the District Auditor that the HESPE contract was providing value for the money the Council was spending.  The Director said that it was reasonable for the Cabinet to consider whether a PACSPE contract could result in a similar outcome of a qualifying statement from the District Auditor.  In the absence of quality information and unit costs the Council was unable to demonstrate that it could deliver a better Parks and Countryside Services by letting the PACSPE contract.

Ian Coleman, Deputy Chief Executive/Director of Finance

The Deputy Chief Executive/Director of Finance reported that he had not been involved in the HESPE process and had only known that the District Auditor would issue a qualifying statement in respect of it since September  ...  view the full minutes text for item 37.

Councillor J Green referred to the evidence the Committee had been presented with from various sources.  The consultants used in the PACSPE process had explained the qualitive and quantitive assessments that had been carried out.  Members had heard from Members of the Project Team and the Friends Forum, had been informed of the Gateway Reviews undertaken and had questioned the Accountant and the Auditor.

The Cabinet had taken its decision not to let the PACSPE contract but instead run the Parks and Countryside Service in house without any consultation with stakeholders or park users, who had made a huge contribution to the PACSPE process.  The point had been made in respect of inflation that it only applied to the preferred bidder not the Council.  Councillor Green informed that, of course, it applied to both sides. 

Councillor Green referred to the points made by the Leader of the Council, Councillor S Foulkes and accepted that he was genuine in what he had said.  There was a problem in asking tenderers to tender for a contract by adhering to a set of rules and then asking them to change them.  He considered that it was this that left the Council open to a series of risks.  Councillor Green referred, again, to the criticism levelled by the District Auditor that the Council was unable to demonstrate value for money in respect of the HESPE contract and the Cabinet’s fear of this happening again if the PACSPE contract had been let.  He reminded Members that he had spoken to the District Auditor in this regard; and that she had not seen all of the associated documentation.  She had not suggested that the Council should not go ahead with this procurement exercise, in the light of it.  She had only wanted to point out the risks of doing so.  With some thought, Councillor Green believed that it would be possible to mitigate risks and it was up to the Council to do this.  In the light of the points made and the information provided by the expert witnesses at this meeting, Councillor Green believed that he and his fellow Councillors had been right to call the Cabinet’s decision in.

There had been much talk of the HESPE contract during this meeting and Councillor Green was well aware of the lessons learnt from that process.  He was disappointed that the decision had been taken to cancel the Member Steering Group on the run up to this meeting.  The aim had been to provide Members with important information.  Councillor Green was also concerned about the Council not having essential data and the need identified for a management information system which would require additional investment and about the budgetary issues set out in the report.  He was still of the view that the Cabinet’s decision to refuse to award the PACSPE contract was not evidenced based and was unsafe and that no one appeared to have looked at how the contract had been put together or that the  ...  view the full minutes text for item 38.

Councillor C Meaden summed up by informing that when she had become the Cabinet Member for Culture, Tourism and Leisure in May 2011 she had met with the Director of Technical Services and had decided to visit all of the Council’s Parks and meet the staff and volunteers which she had done. She spoke highly of the Contracts Manager who would now be asked to restructure the whole Service. 

Councillor Meaden reported that she had spent a lot of time considering the PACSPE contract.  However, at the Cabinet meeting on 22 September 2011 she had been aware that the staff had been eager to know about their jobs and what would happen in the future.  Therefore, to avoid any more unnecessary suspense, she had moved the recommendations without any preamble.  Councillor Meaden informed that she was very happy for the Parks and Countryside Service to remain in house.

Councillor J Hale, in his capacity of Chair, thanked everyone who had spoken at the meeting for their contributions.

It was moved by Councillor Hale and seconded by Councillor McCubbin: That

This Committee notes the following:

·    the Cabinet appeared to ignore, and did not even mention, the findings of the Office of Government Commerce Gateway Reviews that the Parks & Countryside Services Procurement Exercise (PACSPE) had been subjected to;

·    no attempt was made to publically question officers from the Finance Department, the Legal Department and the Procurement Unit who were members of the PACSPE Project Board as to whether the ‘risk’ identified by District Audit, and made so much play of in the Cabinet resolution could or had been satisfactorily mitigated;

·    no discussion was had by Cabinet Members of the risks of not awarding the contract.

·    no mention or discussion took place regarding stakeholder management or the views of key stakeholders about the benefits of clear quality improvements that were built into the procurement exercise. In fact, other than the views of the Council Trades Unions, the results of consultation and the views of park users and user groups were not even mentioned by a single Cabinet Member at the meeting;

·    no reference was made to the new post of Community Engagement Manager to work with Friends, stakeholders, user groups and local Area Forums or the new key performance indicators developed through PACSPE to reflect the change to a more customer and community focused service;

·    insufficient account appeared to be taken of the reduction from costs of £8.1 million per year to £7.4 million per year already achieved by the PACSPE process with the potential to reduce costs by a further very large sum.  Indeed, it is hard to understand how the Leader of the Council characterised the potential savings as marginal;

·    no effort appeared to be made by Cabinet Members to discuss or evaluate the additional costs to Council Tax payers of purchasing what has been accepted as worn out equipment requiring immediate replacement at a very significant cost or the TUPE costs of bringing current contractor staff into the Council workforce and pension scheme, per annum, or over the 10 year period;

·    no mention was made of the training and development programme for staff and volunteers or the three to six new apprentices to be created as part of PACSPE;

·    no explanation was given at Cabinet regarding the opposition to a 10 year contract that would reduce annual costs by a significant amount]and improve the quality of our parks and countryside, other than the expressed need contained in the resolution to reduce spending by £85 million over three years;

·    therefore we believe that the decision to refuse to award the PACSPE contract would see the ever decreasing quality of a service starved of investment by this administration which is already characterised by going for the quick fix instead of making the difficult but necessary strategic decisions in the interests of Wirral residents; and

·    this Committee therefore, recommends that the PACSPE contract should be let to the designated preferred bidder.

It was moved as an Amendment by Councillor  ...  view the full minutes text for item 41.

The Committee had regard to the full version of the reasons for the call-in which contained exempt information, as some elements of the grounds for the call-in were commercially sensitive.

The information set out in the Appendices to the report of the Director of Technical Services contains legal advice and commercially sensitive information relating to the Council and the tenderers. The Director of Law, HR and Asset Management has advised that this should be classed as Exempt Information in accordance with paragraphs 3 and 5 of Part 1 of Schedule 12A to the Local Government Act 1972.

The Committee noted the exempt appendices in respect of the Parks and Countryside Services Procurement Exercise which contained some commercially sensitive information.