Agenda item

To seek approval to the Authority’s Procurement and Commercial Strategy.

Cabinet considered a report seeking approval to the Authority’s Procurement and Commercial Strategy 2022-2025.

The Procurement and Commercial Strategy 2022-2025 attached at Appendix 1 to the report sets the framework in which the Authority would work to ensure that procurement delivered value for money and contributed to the achievement of the Authority’s priorities.

The Authority was committed to developing relationships with good employers who

reflected the Authority’s own values of ‘We Care, We Listen, We are Good Value for Money, and We are Ambitious’ and the principles of fairness, transparency and integrity in procurement.

In developing the new Strategy, the opportunity was taken to complete the National

Procurement Strategy Toolkit. The toolkit identified the following as key areas of strength and good practice within the Authority, and officers would continue the good work in these areas:

·         Culture – we act as a single team when dealing with external partners;

·         Tendering – our tenders are bespoke to the opportunity, we approach this on a commercial basis to ensure value for money for the Authority; and

·         Forward planning – contracting will form part of the Authority’s budget setting process. The team contribute ideas for savings and income generation.

The following areas were highlighted as areas where improvement could potentially be made:

·         Change control – no standard process in place for approving changes to contracts;

·         Contract management – currently not deemed an essential skill across the Authority; and

·         Social value – no senior oversight for reporting social value.

The Strategy proposed a mechanism to strengthen these areas.

In 2021, the Local Government Association published a revised National Procurement Strategy for Local Government.  This sets out a vision for local government procurement and encouraged all local authorities to deliver outcomes in three key areas: Social Value; Commercial and Procurement Delivery; and Skills and Capability for Procurement. These key areas underpinned the strategic direction of the Strategy, which supported the ‘Our North Tyneside Plan’. Specific actions were set out in the Action Plan included at the end of the document and the outcomes were described in more detail in the report.

The Public Services (Social Value) Act 2012 required local authorities to consider securing economic, social or environmental benefits when procuring services. To comply with the 2012 Act local Authorities must think about how and what they were going to buy, or how they were going to buy it, and if this process could add social value benefits.Within the Strategy was the Authority’s revised approach to Social Value.  Experience had taught the Authority, and engagement told the Authority it can further improve the policy. The Authority currently had no formal mechanism of monitoring social value provided for in bids. Social Value would be monitored, measured and reported to Cabinet as a minimum on an annual basis as described in Annex 1 to the Strategy.

It was proposed that the weighting associated with Social Value was increased to 20%, 5% would be allocated to the ‘greener’ priority as this would align with the Authority’s priority to be carbon net-zero by 2030 and 5% would be allocated to the ‘caring’ priority. This would align with the Authority priority to reduce inequalities within the borough. The remaining 10% would be discretionary across the ‘thriving’, ‘secure’ and ‘family-friendly’ priorities. The weighting would align to the content of the opportunity. 

Social Value weightings may vary between the procurement exercises and the priorities and measures chosen would be appropriate and proportionate to the contract. The weightings would be clearly published with the procurement documentation. It was proposed that the weightings were reviewed annually. All contracts which were tendered would consider Social Value as part of the evaluation criteria.  The Authority’s approach would need to be flexible where it was obtaining funding with conditions attached and would also need to adapt to the requirement of any existing frameworks which the Authority wished to use.

Through the Strategy the Authority expected to achieve the following strategic aims and ambition -

·         Value for money

·         Working Towards a Net Zero Carbon Future

·         Social Value

·         Buying from ourselves

·         Capability and Capacity

·         Commercial and Procurement Delivery

An action plan was contained within the Strategy, again progress against the action plan would be reported to Cabinet on an annual basis.

The Strategy was prepared following engagement with organisations within the waste, construction, social care sectors, and the voluntary and community sector, being the Authority’s largest areas of influenceable spend. Feedback was also sought from the Authority’s strategic partners and Trades Unions as well as officers within the Authority who undertaking procurement and commissioning activity.  Feedback received was positive on the Strategy. The feedback taken into account when finalising the Strategy was detailed in the report.  Previously potential bidders had indicated that the procurement process was complex, lengthy, and sometimes was a disadvantage to smaller, local businesses. The procurement team had worked with various markets through engagement events to ensure that bidders were ‘tender ready’ and able to submit quality bids. As part of NEPO bespoke training had been delivered and 1-2-1 support provided to local businesses.

Monitoring and reducing inequalities was a priority for the Authority. Currently the Authority did not monitor or manage the supply chains data around diversity and inclusion. It was proposed that each contractor submit data on its organisation and supply chain. This would give the Authority information as to which sectors and specific organisations it needed to work with to reduce inequalities. 

The Authority had adopted a zero-tolerance approach towards all forms of modern slavery and commits to preventing modern slavery within the borough by embedding the Modern Slavery Act 2015 into its corporate activities.  The Authority continued to rely upon its local strategic partnerships with the following external organisations to mitigate the risk posed by modern slavery to North Tyneside: NHS Northumbria; NHS North Tyneside Clinical Commissioning Group; Cumbria, Northumberland, and Tyne and Wear NHS Foundation; Northumbria Police; and Tyne and Wear Fire and Rescue.  The Authority also commits to notify the Secretary of State of suspected victims of modern slavery as required by Section 52 of the Modern Slavery Act 2015. 

Monitoring and managing modern slavery within its supply chain was essential. The Authority would undertake a risk assessment on the goods and services to manage those which were higher risk as best practice. The Authority would work with the supply chain which were highlighted as high risk to monitor and mitigate any potential risk to the Authority.

The needs of the community would be fundamental to the decisions the Authority made with innovative and agile procurement practices adopted to support the local economy and deliver more sustainable outcomes. To maintain the Authority’s reputation and reflect the expectations it had of its suppliers, all procurement activity would be undertaken to the highest standards of probity and professionalism.  Members and officers would not only be fair and ethical but would avoid conduct that was capable of being placed under adverse interpretation.

Procurement would therefore be undertaken in compliance with the principles set out in the Responsible Procurement Charter as attached at Appendix 2 to the report. This would be embedded in the Authority’s procurement documentation.

Cabinet considered the following decision options: to accept the recommendations set out in paragraph 1.2 of the report, or alternatively, to not approve the recommendations.

Resolved that(1) the Procurement and Commercial Strategy 2022-2025 as set out at Appendix 1 to the report, be approved;

(2)  the Responsible Procurement Charter as set out at Appendix 2 to the report, be

approved;

(3)  the approach to social value as set out at paragraph 1.5.2 of the report, be

approved; and

(4)  it be agreed to receive bi-annual reports setting out the Authority’s Procurement

Plan and reporting the benefits secured through social value.

(Reasons for decision:  The Strategy builds on the previous Procurement Strategy and feedback provided by stakeholders as the Strategy was developed. The Strategy recognises the role of procurement activity in helping to secure optimum value for money and maximise the benefits social value can bring to the residents.

If Cabinet decides not to approve the Strategy, then the Authority will not have a clear vision and direction for procurement for the next three years.)