Agenda item

How Sheffield Would Like to do Business (Ethical Procurement)

Report of the Executive Director, Resources

Minutes:

6.1

The Committee received a report of the Executive Director, Resources, on How Sheffield Would Like to do Business (Ethical Procurement).

 

 

6.2

The Committee had requested a review of the Council’s commissioning cycle, specifically with regard to its ability to address a number of topics, which included Tax Compliance, Ethical Procurement, Grave Misconduct, Living Wage, Blacklisting, Local Economic Impact and Social Value, and the report contained details of a series of revisions to protocols, processes and tools associated with these topics.

 

 

6.3

The report was supplemented by a presentation from Filip Leonard (Head of Procurement and Supply Chain) and also in attendance for this item were David Hollis (Assistant Director of Legal and Governance) and Councillor Mark Jones (Cabinet Adviser for Finance).

 

 

6.4

As part of the presentation, Mr Leonard reported on the Council’s ambitions in terms of ethical procurement, indicating that the Council aimed to maximise its ability to use its discretion to apply ethical standards to behaviour throughout its supply chain, whilst being effective and efficient.  He referred to the Ethical Procurement Policy products used by his Service, specifically highlighting the fact that the Council had recently been accredited to the Living Wage Foundation. 

 

 

6.5

Members of the Committee raised questions, and the following responses were provided:-

 

 

 

·             The Council accepted the need for companies to use sub-contractors.  It was also accepted that there was a need for the Council to vet the contract partners, particularly with regard to their payment terms, in an attempt to try to push money down to smaller contractors.  The Council was currently working with the Living Wage Foundation to provide it with data in terms of how many employees were not currently in receipt of a real Living Wage. Ultimately, the contractual obligation was on the main contractor, and they should not be able to downgrade any specification.  There was therefore a need for the Council to actively manage this position.

 

 

 

·             Generally, a contract would last for a four-year term, therefore, within four years from now, all contracts offered by the Council should have been re-procured, thereby giving the Council the opportunity to ensure all its tendered contracts had been subject to the ethical requirements and standards.  The Council had worked with the University of Sheffield to produce a toolkit to help suppliers to achieve sustainable supply chains and excellent employment practices.  The toolkit brought a number of benefits to both the Council and suppliers.  An event had been organised for 29th October 2018, at which the online toolkit would start to be rolled-out to suppliers, with a view to recovering data from them by the end of March 2019.  Apart from final amendments to that part of the supplier questionnaire relating to grave misconduct, it was considered that the toolkit was almost complete.

 

 

 

·             The only exceptions, at the end of a four-year period, with regard to the Living Wage will be in those circumstances where the Council was not the main contracting authority.  The Council was pushing to ensure that the Living Wage was being paid by all its contracted suppliers, and was working closely with all procurement heads in the City in an attempt to ensure this was happening across Sheffield.

 

 

 

·             The powers in the Council’s Ethical Procurement Policy enabled the Council to deal with any misconduct issues regarding groups of companies, and was stronger than the policies of many other local authorities in this regard.  If the Council had any concerns or suspicions regarding the conduct of a company within a group of companies, it would make investigations, and ask questions regarding its conduct. 

 

 

 

·             There had been a number of noticeable differences following the approval of the Policy six months ago, including external validation of the real Living Wage and specifically in the improvements to the security contract outcomes, which at one point involved around 60 different companies, and now there were just five, with four of these comprising small and medium size enterprises, and three being based in Sheffield.

 

 

 

·             In terms of any further revisions to the Policy, officers would incorporate any amendments or suggestions arising from this meeting, and forward a report to Councillor Olivia Blake (Cabinet Member for Finance) for approval.

 

 

 

·             It was accepted that there was a need for clearer reporting mechanisms in terms of informing members of the public what the Council had achieved in terms of its Ethical Procurement Policy.  It was important that the Council made it clear what it was trying to stop under the Policy.  The Council was looking to improve in a manner that was easy to understand, yet demonstrated tangible outcomes achieved.

 

 

 

·             Whilst it was accepted that, in some circumstances, a multi-national company which the Council had offered a contract to may comply with our Policy, but not meet the required standards in other countries, the Council was only able to look at the organisation that was bidding for the contract, and make a decision whether it passed the two-part test with regard to grave misconduct.  The Council was not restricting the evidential basis to this country and may look at actions abroad.

 

 

 

·             If there were grounds, under the legislation, for the Council to exclude a company or organisation, which, in the opinion of the Council, has committed grave misconduct, the Council could exclude them from tendering. 

 

 

 

·             Specific weighting was given, under the procurement process, to local economic impact, with the Council mandating that one local quote should be sourced where possible from certain procurements less than £150,000 in value. Additionally, the Council was providing training to assist local suppliers through the procurement process. 

 

 

6.6

RESOLVED: That the Committee:-

 

 

 

(a)      notes the contents of the report now submitted, together with the information reported as part of the presentation, and the responses to the questions raised;

 

 

 

(b)      thanks Filip Leonard, David Hollis and Councillor Mark Jones for attending the meeting and responding to the questions raised; and

 

 

 

(c)      requests a report back on the progress of the Ethical Procurement Policy to a meeting in or around June 2019.

 

Supporting documents: