Issue - meetings
Review and Renegotiation of Largest Contracts
Meeting: 02/02/2012 - Cabinet (Item 280)
A report by the Deputy Chief Executive/Director of Finance provided the Cabinet with an update on the review of major contracts that had been undertaken during 2011-12.
A project had been initiated on 14 April 2011 to review the Top-50 contracts with a view to making savings in 2011-12 and identifying priorities for future contract negotiations. A savings target of £0.5m had been included in the 2011-12 budget.
The Cabinet at its meeting on 14 April 2011 had authorised the engagement of Price Waterhouse Coopers (PwC) to support these reviews on a ‘no win no fee’ basis. PwC had considered a number of contracts and was now focussing on
(a) waste collection;
(b) schedule of rates;
(c) telecommunications; and
(d) agency staff.
The Cabinet noted that to date no savings had been identified by PwC.
It was reported that the Procurement Unit had worked with staff across the Council to examine where there was potential to make savings on the Top-50 contracts in 2011-12 and beyond. This was in addition to the work undertaken to deliver the general procurement efficiency target of £2m agreed in the 2011-12 budget. There was difficulty in negotiating savings where the contracts had been subject to recent OJEU tenders. Negotiations with contractors were lengthy and where there were service implications these could not be implemented without extensive consultation and equality impact assessments. The review therefore was limited to identifying potential, not actual, savings.
The outcome of reviews that do deliver cashable savings in 2011-12 was £422,400 against the budget target of £500,000. This excluded any savings that may arise from the work of PwC.
That the progress of this review and the inclusion of the savings identified to date in the overall procurement efficiencies report included elsewhere on the agenda (Minute No. 281 refers) be noted.