Parks and Countryside Services Procurement Exercise (PACSPE) - Outcome of Call-In
Decision Maker: Cabinet
Decision status: Recommendations Approved
Is Key decision?: Yes
Is subject to call in?: Yes
The Cabinet received the draft Minutes of the call-in meeting of Sustainable Communities Overview and Scrutiny Committee held on 20 October 2011 and noted its recommendations as follows:
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.”
The Leader of the Council, Councillor Steve Foulkes reported that Cabinet Members had been informed of the representations made at the call-in meeting on Cabinet Minute 117 (22 September 2011)- Parks and Countryside Services Procurement Exercise (PACSPE) and had read the Minutes.
Councillor J Green, who was in attendance at the Cabinet, meeting, challenged the Minutes of the Sustainable Communities Overview and Scrutiny Committee held on 20 October 2011 informing that neither he, nor the Chair of the Committee, agreed with them, as they were at odds with their recollections of the proceedings of the meeting.
The Director of Law, HR and Asset Management reported that the Minutes in question were still in draft and would be considered by the Sustainable Communities Overview and Scrutiny Committee at its next ordinary meeting scheduled for 23 November 2011. The Committee would determine whether they were a correct record or not. However, Minutes were not written to provide a verbatim record of all that was said at a meeting. Minutes attempted to capture the essence of debate and set out what was resolved at a meeting. The Director advised that, in his opinion, having been present at the Overview and Scrutiny Committee meeting, the Minutes, as presented, where a fair and accurate record of its proceedings.
Councillor Foulkes, in responding to the resolution of the Committee that had considered the call-in, reported that the Cabinet considered that everyone who had worked and been involved with the Parks and Countryside Services Procurement Exercise (PACSPE) had put their best efforts into it. However, the Cabinet believed that a major error had been made in the process. The error made was that an in-house bid had not been allowed. Councillor Foulkes compared the PACSPE with the Council’s previous Highways and Engineering Services Procurement Exercise (HESPE) and told the meeting that if a similar process to that of the HESPE had been adopted and an in-house bid had been allowed, that bid could have been used as a bench mark in the decision making process. For whatever, reason the previous Administration had agreed not to do this.
The Cabinet had been influenced by the HESPE and by the District Auditor who had identified that the Council was not able to provide information on activity and performance of the HESPE contract to determine whether it was receiving better value for the money spent. As a consequence this was now the basis for a qualified conclusion in respect of the Council’s Value for Money Statement. The Cabinet considered that this was reason enough not to let the PACSPE contract.
Councillor Foulkes also referred to the criticism being levied at the Council by the District Auditor, over its ability to make a strategic decision. He told the meeting that the Cabinet would be making a strategic decision on the PACSPE and that was to run the Council’s Parks and Countryside Service in-house and aim to bring about improvement by investment (invest to save) and by concentrating on developing working practices. Councillor Foulkes was encouraged by those who represented the workforce, who believed that efficiencies could be made with regard to the in-house option. It was noted that the PACSPE contract was to have covered a ten year period. It was considered easier to carry out negotiations in respect of efficiencies that could be made in-house rather than entering into dialogue with outsourced contractors.
Councillor Chris Meaden, as the Cabinet Member for Culture, Tourism and Leisure informed that she did not want anyone to think that the Cabinet had taken the decision not to let the PACSPE contract lightly, or that it did not want to take into account all of the time, effort and hard work that had gone into getting the procurement exercise to the point where tenders had been received and evaluated. This had been one of the hardest decisions the Cabinet has had to make and the Cabinet was aware that Wirral people valued their Parks and Countryside very highly.
The decision had been taken against a background of:
- serious criticisms of the Council’s Corporate Governance, including its commissioning and management of contracts;
- a Qualification of the Council’s Value for Money Statement on the HESPE contract, with a warning about implications for the PACSPE contract;
- serious considerations over the cost of contractual inflation over a ten year period when the Council faced major and increasing financial pressures;
- the need to maintain maximum flexibility in the Council’s workforce at a time when the Cabinet was unaware of what might happen next;
The decision had also been taken with the realisation that times were changing and that increasingly other organisations were starting to bring services back in-house again to deliver the flexibility needed to survive tough times: e.g. BP had announced that it had decided to bring all of its outsourced work back in-house and that the savings from the flexibility this would provide would be substantial.
Councillor Meaden told the meeting that she had every confidence in the staff to deliver the best services possible for the people of Wirral and that the Cabinet would be actively monitoring every move to make sure that high standards were achieved and maintained within the budget set.
On a Motion moved by Councillor Foulkes, seconded by Councillor Meaden and carried on a vote of 9 for and 0 against (Councillor G Davies was unable to vote as he had not been present at the beginning of the meeting and consequently, had not heard much of the debate) it was
(1) this Cabinet has considered carefully the resolution submitted to it by the Sustainable Communities Overview and Scrutiny Committee;
(2) the Cabinet recognises the detailed work that went into the procurement process and the Gateway Reviews that were carried out as part of that process and does not question the thoroughness of those Reviews or the dedication and ability of those carrying out those Reviews;
(3) however, the Cabinet believes that this does not alter the fact that detailed unit costs and specific activity levels, which would have allowed for full comparator costs to be available to check against the tender specifications, were not available and that this would have left the Council open to the same criticism on the PACSPE contract that was levied against the HESPE contract:
· The Cabinet recognises the seriousness of the qualification by the District Auditor of the Council’s Value for Money statement and of the warning to Members that they should be aware of the increased risk of letting a ten year contract if there is only very limited information on the costs and activity levels of the existing service because there is nothing to monitor against when assessing whether or not letting the contract has delivered better value for money.
· The Cabinet further considered the position that the cost of contractual inflation over a period of three years at current CPI levels would erode any savings delivered by outsourcing the contract and in subsequent years could increase costs to the Council.
· The Cabinet was further mindful that this decision was being taken when a highly critical Corporate Governance report had just been published which pointed in general to weaknesses in the Council’s commissioning, managing and where necessary dismissing failing contractors and suppliers.
· The Cabinet, therefore, re-iterates its decision taking on 22 September 2011 and re-affirms the full content of the resolution passed, as stated in Cabinet Minute No. 117, including its confidence in the ability and commitment of the workforce to deliver an excellent service, with proper support and good management, over the next ten years.
Publication date: 07/11/2011
Date of decision: 03/11/2011
Decided at meeting: 03/11/2011 - Cabinet
Effective from: 15/11/2011