Agenda item

A report of the Director of Finance was presented, the purpose of which was to provide the Committee with assurance in relation to the Council’s compliance with the Public Contract Regulations 2015 specifically in relation to those contracts that had been awarded subject to an exemption from the Council’s Contract Procedure Rules (CPRs)/Standing Orders (SOs).

Exemptions were allowed under specific circumstances as set out in the CPRs/SOs in exceptional circumstances, details of which were provided at paragraph 4.7 below.  The report provided a summary of the Council’s activity in regard to exemptions submitted and approved under the Council’s standing Order rule 5 (in accordance with the previous contract procedure rules). To report on the current status of those exemptions and any issues arising from their approval.

In compliance with the section 24 recommendation made by EY in August 2023, a full review of live contracts that had been awarded subject to an exemption from CPRs has been undertaken.  This identified the status of those contracts and sought to provide assurance to the Committee that the Council’s procurement practices were in accordance with Contract Procedure rules and compliant with the Public Contract Regulations.

Details of the number of contracts awarded subject to exemptions from CPRs since April 2021, and any contracts awarded with exemptions prior to that date which were still live were included in a table in the submitted report at paragraph 5.1.  The table indicated that 4% of exemptions received were in query by the Procurement service as a result of this process.  The detail concerning those exemptions was outlined in Appendix 1 to the submitted report, along with the issue and resulting actions.   None of the exemptions in query breached the Public Contract Regulations 2015 in terms of the total value of expenditure exceeding the financial limits within the regulations.

In addition, with regard to the two contracts that were let subject to an exemption which had subsequently been subject to a contract extension, the financial values had been checked and the total amount fell below the Public Contracts Regulations 2015.  The review concluded that all contracts that had been awarded subject to an exemption were compliant with the financial thresholds determined under the Public Contract regulations 2015. Members could therefore be assured that the contract procedure rules in relation to letting contracts subject to exemptions were robust and compliant with legislative requirements.

Notwithstanding the assurance provided by the review, the Procurement Service had sought to deliver further improvement to strengthen the governance arrangements around procurement.

The contract procedures rules were refreshed and approved by Council as part of the Constitution in September 2023.  As a result, authorisation on exemptions had been strengthened as follows:

•           Requests for exemptions up to full contract value of £150,000 would be authorised by Head of Strategic Commissioning and Procurement.

•           Request for exemptions in excess of £150,000 would be authorised by Head of Strategic Commissioning and Procurement, and the Director of Finance (Section 151 Officer).

•           Request to extend a contract that is subject to an exemption will be signed by Head of Strategic Commissioning & Procurement, Director of Finance and Director of Legal and Governance (Monitoring Officer).

The authorisation process assured additional due diligence for any extension requests to an original exemption.  No extensions were permitted if the contract values would exceed the thresholds set out in the Public Contract Regulations.   In addition the guidance stipulated that exemptions should be for no more than two years, unless there was a defined case which could demonstrate the value for money for a longer time period.

A clear process had been established for referencing, as prior to submission for signature a procurement officer would explore all feasible options including the potential for call off from frameworks, variation of existing contracts etc. 

Mandatory training had been provided to all budget holders in which exemptions had been covered, and the case for exemption to be the exception, rather than the rule, had been re-iterated to the staff base.  Finally, guidance on the staff intranet had been updated in regard to submission of appropriate forms and associated guidance.

AGREED that the report was received and noted.