The report of the Service Director for Commissioning is attached.

Contact: Laura Tyler (01743) 253178

The Committee received a detailed update from the Service Director for Commissioning on the current position regarding contract and procurement management, together with the range of improvement actions underway across the organisation. She advised that a national framework had been used to undertake a comprehensive self?assessment, the outcomes of which had informed the development of a formal improvement plan. A working document and appendix had been produced to capture the actions required and to monitor progress.

In outlining the resource and capacity position, the Service Director for Commissioning explained that procurement and contract management functions had historically operated with minimal staffing. As a result, internal approval had now been secured for an expanded structure and increased investment in specialist roles. Recruitment activity was in progress, although she noted that competition within the market would mean that the full benefits of the restructuring were likely to be realised over the medium to long term rather than immediately.

The Committee was informed that the existing ERP system functioned solely as a holding place for contract information and did not provide the necessary governance, monitoring, or oversight capabilities. The IT Service had now approved the procurement of a dedicated contract management system. This would ensure all contracts were recorded, provide automated prompts and workflow functions for officers, and enable clear integration with procurement processes.

The Service Director for Commissioning further reported that governance arrangements had been strengthened through the establishment of two commissioning delivery groups responsible for procurement activity. In addition, a new Commissioning and Procurement Board had been created to oversee risks, exemptions, and audit recommendations, and terms of reference were currently being drafted. Work on market management was progressing, with cost avoidance and savings being actively tracked. Examples were provided from social care and procurement negotiations, and further opportunities continued to be identified through category management and spend review boards. She confirmed that a baseline survey of contract management practice would shortly be launched, alongside the development of a contract resource toolkit and associated training, to promote consistency and support culture change across the organisation.

In response to a query about when financial savings or cost avoidance would begin to materialise and what scope existed for more immediate impact, the Service Director for Commissioning explained that the majority of savings achieved to date related to third?party reductions and cost avoidance, including over £1 million in one area. She anticipated that almost £2 million in savings would be realised next year as procurement processes continued to mature, with further opportunities identified in areas such as transport and IT.

The process for selecting the new information platform was queried, along with its anticipated implementation date, and the level of assurance available during the interim period. In response, the Service Director for Commissioning confirmed that the contracts register within the ERP system had already been updated and that a benchmarking survey would be undertaken to highlight any gaps. Immediate follow?up action would take place where required, with the option of additional audit support. The new system was expected to be operational within six months and would enable reporting against high?level KPIs and dashboard measures.

It was queried whether internationally recognised frameworks, such as ISO 9001 or ISO 2400, were being used or whether the organisation relied solely on internal approaches.  In response, the Service Director for Commissioning explained that a range of national, regional, and local frameworks were used. Procurement officers were now being engaged at an earlier stage in the commissioning process to support option appraisal and ensure that the most appropriate framework was selected according to the contract type. The Service Director for Commissioning confirmed her willingness to involve committee members in system review discussions.

The Chair sought clarity from the Head of Policy and Governance regarding when contract management would next be reviewed following the introduction of the new system. The Committee was advised that no fixed date had yet been set but that contingency days had been included in the 2026/27 audit plan to allow Internal Audit to revisit the area once implementation had progressed sufficiently.

Councillor Kidd, Leader of the Council, reiterated the importance of effective contract management, noting it as a priority within the administration’s manifesto, and welcomed continued oversight and support from the Committee.

The Committee expressed confidence in progress but stressed the importance of revisiting the topic later to assess results and improvements.

The Chair proposed the following resolution: the committee was assured by the first-line assurance received and that internal audit would be asked to review contract management at a later date to provide independent assurance when the new system was in place. 

It was proposed by Councillor Lumby that the wording be amended to reflect that areas requiring improvement had been clearly identified and that work was now actively underway. This amendment was accepted.

The Service Director for Commissioning acknowledged that contract management carried inherent risks due to expenditure levels and statutory obligations and welcomed Committee involvement in shaping the audit brief and assurance expectations.

RESOLVED:

To agree that first-line assurance had been received, that areas for improvement had been identified and that work was underway. 

To request Internal Audit review this area in future to provide independent assurance once new systems and processes were embedded.