A report by the Director of Law, HR and Asset Management invited the Cabinet to recommend to Council that it approve an additional Contract Procedure Rule 16A as follows:

  16A Variations to Prices/Rates – Term Contracts

16A.1 Term Contracts (e.g. those in place for waste collection and highway maintenance) are awarded on the basis of a fixed period of time (‘term’); utilising approved rates or prices to deliver services through approved budgets rather than an approved contract total.

16A.2 The Chief Officer responsible for every term contract shall record in writing every change in the works or service information which results in a variation to the prices or rates (including the deletion or provision of

  new rates), immediately it is raised; recording the estimated financial impact of the variation over the life of the contract (the ‘whole cost’) based, where appropriate, on the latest complete year’s quantities to assess future year’s quantities. If the whole cost of the variation exceeds £50,000 or 10% of the estimated value of the contract over its term (whichever is the lesser); the Chief Officer must immediately inform the Director of Finance. This rule applies to all contracts as defined in Contract Procedure Rule 4.1, including those based on an ‘Agreed Maximum Price’.

16A.3  If the Supervising Officer considers in their professional opinion that it is necessary for the works or services information in a term contract to bevaried for technical reasons to ensure the successful delivery of the contract (for example, unforeseen sub-surface or drainage conditions, or an omission or ambiguity in the contract), the officer shall be authorised to consent in writing to the necessary variations to the contract. He shall subsequently submit a written report to the next meeting of the Cabinet, or relevant regulatory committee, in order to explain the reasons for the action taken if the whole cost of the variation is likely to exceed £50,000 or 10% of the estimated value of the contract over its term (whichever is the lesser).

16A.4 Any other variations to a term contract which are not technically necessary for the successful delivery of that contract (for example, variations which increase or enhance the approved scope of the contract (such as improved gritting routes, a modified park management plan or a change in the number of car parks)) shall be in writing and shall require the prior approval of the relevant Cabinet portfolio holder, or regulatory Committee, after consideration of a written report; but only if the Supervising Officer estimates that the whole cost of the variation is likely to exceed £50,000 or 10% of the estimated value of the contract over its term (whichever is the lesser).

16A.5 This Rule 16A and Rule 16 shall not apply in relation to variations to works or prices or rates (including the deletion or provision of new rates) for the provision of goods or services to schools where the variation is requested in writing by a school; but the Chief Officer responsible for every term contract relating to schools shall keep a written record of all such variations requested by schools.

This would ensure that significant variations to term contracts which may result in reduced value for money or diminished outcomes for local people being reported to Members.

Councillor S Foulkes informed that the Cabinet would give consideration first and foremost to in-house bids when changing/modernising services before looking to outsource them.

RESOLVED:

That the Council be recommended to revise the Council’s Contract Procedure Rules by the inclusion of an additional Rule 16A in the form set out above.