Agenda item

A report of the Director of Finance was presented to provide a summary of the Council’s position with regard to procurement activity over the last financial year including compliance with Standing Orders, practice changes, and contract awards.

As part of the Council’s Constitution, Contract Procedure Rules were in place to provide governance in respect of procurement practices.  The current financial thresholds were detailed at paragraph 4 of the submitted report.  Approval to reduce the lower finance threshold from £15,999 to £10,000 had been granted but had not yet been implemented due to the Covid-19 pandemic.  The change would be formalised from 1 January 2021 with the intention of directing more contract opportunities to local suppliers and further challenging value for money. 

The monitoring of local commissioning was reported via the balanced scorecard and quarterly information was provided on spend with the local market.  From April 2019 to March 2020, the 40% target was achieved in one quarter only.  However this target had increased from 25% in the previous year and the other three quarters had achieved 34% and over.  The actual spend in monetary terms with Tees Valley suppliers was £24,353,494 which was a slight increase of £3,434,650 on the previous year, with £14,253,655 spent directly with Middlesbrough suppliers.  The strategic objective remained in place for 2020/21 with the quarterly target of 40%.

The Buy Boro campaign had been picked up and drive by Regeneration and Marketing in order to support local businesses and inspire residents to spend locally.  Procurement would continue to work closely with Regeneration and Marketing to further develop this work.

Quarterly reports of all spend from the financial system against the contract register were completed and used to highlight where Standing Orders might not have been adhered to.  This process enabled the Procurement Team to identify any areas of non-compliance and identify any areas for improvement or tendering opportunities. 

Purchasing cards continued to be monitored and managed and were subject to an annual Internal Audit review.  There were just over 400 active cards at the end of March 2020 which was a considerable reduction since the start of the financial year when there were over 500.  Spend continued to be high volume and low risk.  During 2019/2020 a total of £8,610,802 was spent via the cards, which would have been the equivalent of processing 33,288 invoices. 

A new project focussing on the benefits of an early payment scheme via Business World was under development and if implemented would see a further reduction in the use of purchasing cards.

Within Standing Orders there were circumstances where exemptions could be requested.  During 2019/2020, 62 exemptions were approved.  This was a minimal increase compared to the previous year when there were 60.  A breakdown around the number of exemptions for each service area and why they were approved was contained at paragraph 19 of the submitted report.

There had been 55 contracts awarded during 2019/2020 which were the outcome of 34 quotations and 21 tenders.  There were currently 394 contracts contained on the Council’s Public Contracts Registers.

AGREED that the information provided was received and noted.