Councillor Chris Penberthy (Cabinet Member for Housing and Co-operative Development) and Melanie Haymes (Finance Business Partner) presented the Transfer of Procurement Services to the Committee –

(a)   Plymouth City Council’s Procurement Service, which was a key support service within the Finance Department. This team was responsible for leading and providing professional support from low value transactional purchases up to multi million pound strategic projects across a diverse range of goods, services and works, covering 4 main category areas- Construction, Professional Services, Facilities Management and Environment and Transport.

(b)  The Cooperative Commissioning team were out of scope for this proposal.  The Cooperative Commissioning team operated was part of the People Directorate and undertook all activity within Plymouth City Council (PCC) to contribute to the outcomes defined in four commissioning strategies that cover; Wellbeing, Children and Young People, Community and Enhanced and Specialised Care.

(c)   The Procurement Service was responsible for ensuring PCC’s procurement and contracting activity was conducted in accordance with its own Contract Standing Orders, Procurement Regulations and Legislation in a fair, transparent and compliant manner and delivered best value for the Council.

(d)  In 2018/19, the Procurement Service and Cooperative Commissioning team oversaw the procurement of over £226.4 million of goods, services or works.

(e)  The total value of awarded contracts in 2018/19 totalled £128.4 million

(f)    Following a detailed option analysis undertaken in September 2017, the conclusion was reached that existing back office services would provide more value to PCC and Plymouth through them being delivered via a public sector shared service provider. The outcome of this analysis was that Delt Shared Services Ltd (Delt) was recommended as the best option.

(g)   The Payroll and Pensions service was transferred in early 2018, followed by Print and Document Services in the autumn of 2018. The Procurement Service was now recommended for transfer to Delt from 1 April 2020.

(h)  The Procurement Service had previously experienced severe difficulty in recruiting and retaining staff. There was a national shortage of procurement professionals and this was an especially challenging situation in the South West. The private sector had the flexibility to pay higher salaries and could offer more innovative and generous remuneration packages.

The key areas of questioning from Members related to –

·         Why PCC had recruited staff and occurred the recruitment expenses if the plan was to transfer staff to Delt Shared Services Ltd;

·         What were the risks for the staff transferring across as part of this proposal?

·         Whether all vacant posts within the staffing structure were now filled, what the FTE of the department was and what was the Head Count;

·         Why there was a large difference in the Employee costs in 2018/19 compared to 2019/20;

·         Concerns were raised about not having a gain share arrangement or having details presented before the Committee;

·         Whether PCC would have any involvement in recruiting staff if the procurement team transferred over to Delt Shared Services Ltd.

Councillor Kelly proposed an amendment seconded by Councillor Beer to amend the recommendation to read “The Performance, Finance and Customer Focus Overview and Scrutiny Committee are asked to recommend Cabinet enter negotiations with Delt Shared Services Ltd”  and the Gain share arrangement to be finalised and made public before the deal was signed off in its entirety.

For – Councillors Kelly, Johnson, Pengelly and Beer.

Against – Councillors Winter, Hendy, Derrick, Tuffin and Vincent.

The ammendment was not passed but Councillors Kelly, Johnson, Pengelly and Beer wanted it noted that they wished to have a firm split in the gain share arrangements.

The Performance, Finance and Customer Focus Overview and Scrutiny Committee were asked to recommend to Cabinet –

·         The Procurement Service transfered to Delt, with staff transferring under TUPE arrangements with effect from 1 April 2020.

·         All Procurement Service work is channelled through Delt allowing for greater efficiencies and growth through a central hub and the potential for greater retention and stability in the workforce through a broader range of procurement categories

·         A Gain share arrangement is put in place whereby both PCC and Delt are motivated to drive down the cost of spend through a share in savings generated. The finer details of the gain share arrangement are to be worked up in partnership with Delt. Finalised

·         The client function to remain within PCC Finance department with KPI’s to be agreed in partnership with Delt.

For – Councillors Winter, Hendy, Derrick, Tuffin and Vincent.

Against – Councillors Kelly, Johnson, Pengelly and Beer.