Contact: Peter Robertson, (01962) 847300, e-mail: [email protected]

With the concurrence of the Chairman under Section 100B (4)(b) of the Local Government Act 1972, this matter has been included on the agenda to provide Members with a follow-up report on specific aspects arising from the investigation report considered on 24^th September 2007, as resolved by the Cabinet.

1 Summary

1.1 At the meeting on 24^th September 2007 the Cabinet considered a report on the letting of consultancy contracts relating to the Contact Centre. As a result of that consideration, the Cabinet requested a report within three months on four specific aspects arising from the investigation relating to; matrix management; procurement arrangements and the possible role of county supplies; and consultancy selection. This report makes recommendations in relation to each of these areas.

2 Recommendations

2.1 It is recommended that guidance is produced by the Monitoring Officer and the County Treasurer to clarify expectations where projects are matrix managed.

2.2 The County Council is currently considering a review of its corporate services and it is recommended that procurement issues and roles should be considered in detail as part of that review.

2.3 On the issue of consultants taking part in the interview of other consultants in similar fields, it is recommended that an instruction is issued to the effect that this must not happen in future.

3 Background

3.1 Following consideration of the report into the investigation for the use of IT consultants in connection with the Contact Centre Programme at the meeting on 24^th September 2007, the Cabinet resolved:-

"that a report be submitted to the Cabinet for decision within three months, following further investigation of the issues raised in recommendations 14.1, 14.3, 14.4, and 14.6" set out in the report.

3.2 Dealing with each of these in turn:-

"14.1 In a case such as this, where there is "matrix management" of a senior manager by the Chief Officer of another department, clarity should be given at the outset of the project as to who has Chief Officer responsibility for ensuring compliance with Standing Orders (paragraph 13.7)."

3.3 Response and recommendation

The Council conducts many of its corporate activities through a process of matrix management and it is not untypical for multi disciplinary teams to be led or project managed by officers from another department. This is to be encouraged to promote corporate working. The Management arrangements for the Contact Centre Programme were reported to Cabinet on the 19^th December 2005 and the programme organisation was set out in Appendix A (copy attached as Appendix 1 to this report).

The role of the Board as expressed in the report to Cabinet was to be "responsible for delivering the programme". The programme board adopted a Project Initiation Document which expanded some of the elements around delivery of the programme and included:-

- oversee the direction/progress of the project

- ensure the necessary resources are provided

- review and accept the key deliverables

- resolve signficant issues

- authorise changes

These arrangements are relatively sophisticated, however, the lessons learnt in this particular case tend to demonstrate a lack of clarity around the detailed governance arrangements. Exactly where responsibility begins and ends is crucial in a project of this nature. Clearly within the programme it is the responsibility of all those involved to exercise due diligence within their particular sphere at a departmental level and at a corporate level, and this clearly includes compliance issues The specific issue in this case was whether adequate control and monitoring arrangements were in place as a series of contracts, which should have been aggregated under EU Procurement Regulations and the County Council's own Standing Orders were let. From the report and subsequent investigations, it appears there was some confusion around this issue exacerbated by the natural desire of those most closely concerned to expedite the project and contain costs. In future, in order to ensure that the lessons learnt are put into operation, initial governance arrangements in such projects will receive much greater emphasis at the project initiation stage and rules of guidance will be issued to emphasise and ensure this.

3.4 It is recommended that this guidance is produced by the Monitoring Officer and the County Treasurer.

"14.3 Consideration should be given to all procurement (or possibly that of a value beyond a given financial threshold aligned with EU Procurement Regulations and Standing Orders) being handled centrally, by specialists suitably trained and experienced. This would give greater comfort in ensuring that processes will be consistently and properly applied, best value consistently obtained, and reduction of risk from non-compliance. Further, in a world of "shared services" this may also present a business opportunity through provision of a service that other local authorities and public bodies may wish to buy into (paragraph 13.11), and that special consideration be given to any proposals in respect of voluntary bodies, and partnerships that the County Council has entered into.

"14.4 If responsibility for procurement remains with departments, and is not handled centrally, consideration must be given to extending the role of County Supplies, which currently monitors procurement practice for value for money purposes, so that they assume responsibility to monitor, promote best practice and report on areas of non-compliance (paragraph 13.12)."

3.5 Response and recommendation

The principle issue here is around centralised procurement and specialist professionals to guarantee consistency and best value together with reduced risk. (14.3). The second main point is around the role of County Supplies which currently advises on and monitors procurement rather than policing procurement processes (14.4).

3.6 Most of the County Council's procurement is centrally organised with much of the actual procurement taking place through County Supplies, often utilising the Central Purchasing Consortium, and also a wide range of framework contracts particularly though not exclusively in the construction field. These arrangements operate successfully backed up by specialist advice in County Supplies, the Legal Practice and the Treasurers Department. A framework arrangement is currently being put in place for IT consultancy contracts. Framework arrangements or using S-Cat or G-Cat (Government framework contracts) are complaint with European Procurement requirements and if they are used avoid the issues that arose in this case.

3.7 There is no evidence to date that current arrangements are inappropriate provided policies and procedures are fully complied with. Immediately the issue of non compliance was identified in this case it was rectified.

3.8 Aspects of procurement raised by the investgation are very important and also link into a number of efficiency reviews that are currently ongoing and include other areas in Adults and Children's services. Any review of this area should be comprehensive.

3.9 The County Council is currently considering a review of its corporate services and it is recommended that this aspect of the report's recommendations should be considered in detail as part of that review.

"14.6 The practice of a consultant being involved in the selection of staff or other consultants, including consultants from their own agency, must be reconsidered. The role and influence of contractors/consultants in future decision making must be limited to an advisory one only, with clear arrangements in place to ensure that proper accountability exists and potential conflicts of interest are avoided (paragraph 13.31)."

3.10 On the issue of consultants taking part in the interview of other consultants in similar fields, this is considered to be poor practice and subject to the agreement of this report, it is recommended that an instruction is issued to the effect that this must not happen in future.

4. Impact assessments

4.1 There are no implications for equalities arising from this report.

5. Conclusion

5.1 The Contact Centre project was relatively complex by County Council standards because the outcome sought was highly ambitious. The Cabinet report of 19^th December 2005 emphasised the need for strong programme management stating that "the proposed programme management will have the experience and expertise to successfully deliver this complex business change programme". This was backed up by comprehensive organisation arrangements where the major responsibilities were clearly expressed. This in turn was backed up by a Project Initiation Document that was thorough and defined a wide range of relationships and responsibilities. The roll-out of the project was monitored in accordance with these arrangements via the Programme Executive and the Programme Board.

The report in December also identified that a mix of internal staff "and external contact centre specialists with specialist contact centre skills" were key to the programme delivery. This became a strength and a weakness in the delivery of the project. A strength because these external specialist skills made a major contribution to the successful delivery of the project, a weakness because at least one of the consultants became embedded in the project as a key member (and a critical success factor) within the team. This was a major contribution to the incorrect contract route subsequently followed for consultancy contracts. The Project Team, for all the right reasons given the circumstance at the time, put their primary effort into delivering the project in an expedient and effective way. This has resulted in the delivery of a first class project which is now operational. This single element, around contract compliance, in breach of the Council's rules was put right immediately it came to light.

5.2 Finally, the report made it clear and it is also the conclusion in this report, that no member of staff has acted wilfully in ignoring advice or procedures to achieve personal gain nor has their honesty and integrity been questioned. The desire at all times was to deliver the project on time and on budget.

Section 100 D - Local Government Act 1972 - background papers

The following documents disclose facts or matters on which this report, or an important part of it, is based and has been relied upon to a material extent in the preparation of this report.

NB the list excludes:

1 Published works

2 Documents which disclose exempt or confidential information as defined in
the Act

None.