Agenda item

5.1

Petitions

5.1.1

Annie O’Gara submitted a petition containing 164 signatures, expressing concern at the delays of the City Council in adopting an Ethical Procurement Policy, despite promising to do so two years ago.  Ms. O’Gara stated that the petition acted as a reminder that the Council had promised, approximately two years ago, to adopt such a policy.  She also referred to the fact that there had been both frustration and disappointment on the part of those groups and organisations working with the Council in connection with the adoption of the policy, both in terms of the delays and the lack of engagement, information-sharing and feedback.

5.1.2

The Chair stated that a written response to the petition, which would be incorporated into the responses to the written questions raised at the meeting, would be forwarded to Ms. O’Gara.

5.2

Questions

5.2.1

The following questions were received from members of the public:-

(a)       Annie O’Gara, on behalf of the Sheffield Stop G4S and Palestine Solidarity Campaign, stated that whilst she welcomed the aspirations of the City Council, as articulated in the report now submitted, in particular the desire to drive ethical behaviour throughout the supply chain, she did not agree with the bold claim that the proposals before the Committee “achieve” this aim.  The Group did not believe that the proposals “hold the supplier to account for unethical behaviour”, and whilst referring to the section in the report headed “Context”, which included the claim “We are proposing inclusion of these terms into contract to ensure suppliers are clear of the Council’s expectations in regard to ethical standards and to ensure Sheffield City Council exercise our “discretion”, as articulated in EU Public Procurement Regulations 2015”, she made the following observations:-

·                     Sheffield City Council claims here to be using discretion, but the Group can see no exercising of the rights of discretionary exclusion as specified in the Public Procurement Regulations 2015 (Regulation 57), which says contracting authorities can exclude companies “where the contracting authority can demonstrate, by any appropriate means, that the economic operator is guilty of grave professional misconduct which renders its integrity questionable.”

·                     There is no definition of the City Council’s view of what constitutes “grave professional misconduct” within the documentation, other than legal convictions.

·                     The Council is not using “any means appropriate” to demonstrate grave professional misconduct as far as we can see, but is confining itself to the criterion of conviction within the UK Courts or International Courts.

·                     Such a position constitutes mandatory exclusion within the terms of the Public Procurement Regulations 2015, not discretionary exclusion.

·                     The Council is waiving its right to exclude companies whose “integrity is questionable”.  A company’s integrity may be questionable at a level below that of criminal conviction. Contracting authorities are entitled by the Regulations to assess integrity by any means appropriate, but Sheffield is not doing this.

            Ms. O’Gara questioned (i) why this right had been waived and whether the Committee was supportive of the Council waiving the right of discretionary exclusion as specified in the Public Procurement Regulations 2015 and (ii) what advice, if any, had the Council taken from outside lawyers, on the basis that legal opinion varied and that the in-house team may, for various reasons, adopt a risk averse approach which was limiting Sheffield’s stated aspirations to “get ahead” and be a “fairest city” in the land.

(b)       Val Johnson stated that the Council was not triggering its discretionary power to deselect “where the economic operator has shown significant or persistent deficiencies in the performance of a substantive requirement under the prior public contract, a prior contract with a contracting entity, or a prior contract which led to early termination of that prior contract, damages or other comparable sanctions”. 

            Ms. Johnson questioned why this right had been waived, and whether the Committee was satisfied with this waiving of such a right, which was clearly specified within the regulations.

(c)        Hilary Smith raised an issue relating to the Supplier Code of Conduct, indicating that such Code of Conduct was rightly identified by the Sheffield as a document of crucial importance in achieving what the Council wanted to achieve. Although it had been revised since July 2016, it remained a largely cut-and-paste version of the Department for Environment, Food and Rural Affair’s (DEFRA) Code of Conduct.  Ms. Smith added that anyone reading the DEFRA document however, would see that key principles within its original had been deleted by the Council, for instance:-

·                     Under “Working hours are not excessive”, DEFRA went further than the City Council, by making reference to a 48-hour week, the fact that overtime should be voluntary and that there should be limits on this.  The City Council has deleted all this.

·                     DEFRA’s policy also contains a principle which is worded as follows – “No inhumane treatment is allowed”. DEFRA also includes clauses on misconduct which “prohibits physical abuse or cohersion, the threat of physical abuse, sexual or other harassment or verbal abuse, or other forms of intimidation.”  The Council has deleted this principle. 

Ms. Smith questioned why these sections had been left out, and whether the Committee was content that these principles, important to DEfRA, were irrelevant to Sheffield.

(d)       Catherine Gaze referred to Principle 4 of the Supplier Code of Conduct, which stated that Sheffield will “commit to the delivery of excellent working conditions, high ethical standards, positive health and wellbeing and training, development and reward opportunities for all.”  Ms Gaze stated that it was noteworthy that the phrase “high ethical standards” has not been expanded or exemplified in the bullet points which follow, whilst other phrases in the list have been expanded, and that this omission had been pointed out some months ago to the author who seemed to acknowledge its significance. 

            Ms. Gaze questioned why this crucial phrase was not being treated in the same way as other elements of this Principle.

(e)       John Grayson, on behalf of the South Yorkshire Migration Action Group (SYMAG) referred to the Supplier Code of Conduct, indicating that as this Code stood in the July, 2016 version, it was entirely employee-facing, in that there were no references to the experience of service users, customers or citizens of Sheffield, and was all about the supplier’s workforce.  Whilst there were now some references to citizens’ experience of services, following this issue being pointed out to Councillor Ben Curran (Cabinet Member for Finance and Resources), and which were welcomed, the references were very brief, comprising two short sentences only, relating to privacy and dignity and respect.

            Mr. Grayson questioned whether the Committee was satisfied that these elements had been accorded the status they merited.  In addition, Mr. Grayson stated that whilst the Council had a proud ethical boast which it could make regarding its trail-blazing action as the City of Sanctuary, it was regrettable that no mention was made of this position in the Policy, spelling out to suppliers that Sheffield sets high ethical standards for its refugees and asylum seeker communities, particularly in respect of the services they received.  He questioned why there had been no such reference to this established ethical position.

(f)        Flis Callow referred to Appendix 3 – Ethical Evaluation, indicating that only two of the seven paragraphs in the Appendix relate to ethical matters, the table, which specified ratings, had no reference to ethical issues, and the heading was, in her opinion, misleading.  Ms. Callow stated that she welcomed the expansion of criteria to the apply to the supplier’s parent company group of subsidiaries but added, however, that the limited nature of the test being applied to companies undercut the value of this welcome move, and the wording in paragraph 2 had changed since July, 2016, resulting in a degree of ambiguity.  She stated that she read this Appendix to mean that companies must self-declare any convictions in International Courts, as well as in UK Courts, and that the Council was still using exclusively, the test of criminal conviction to deselect. She stated that she also understood that the Council was intending to use evidence below that of criminal conviction to deselect, however reputable the source may be. 

            Ms. Callow questioned whether the Committee read this section as the Group had, and was the Committee happy with this limited and conservative application of the Regulations.

5.3

In response, Councillor Ben Curran first expressed his thanks and appreciation with regard to the input of Sheffield Stop G4S and Palestine Solidarity Campaign, together with other individuals, groups and organisations who had been involved in the formulation of the policy.  He stated that, despite the timescales in terms of drafting the policy, he considered the work involved to be ground-breaking, and that the Council was well ahead of other local authorities in terms of this area of work.  In terms of the questions regarding the Council’s discretionary powers, Councillor Curran stated that the Council had to work within specific legal parameters, and any action outside such parameters could result in potential legal costs for the Council.  He stressed that the right of discretion had not been waived, but applied as far as possible within legal frameworks.  He stated that whilst the comments and views of the various groups and organisations consulted on the draft policy had been taken into account, it may not be that obvious, or referenced in the latest draft.  He did state, however, that there would be no problem making reference to Sheffield as the City of Sanctuary in the document.  He stated that as this was a new and ground-breaking piece of work for the Council, it had to use some form of a template, and it had been considered that DEFRA’s Code of Conduct would be a useful starting point, as this was new territory.

5.4

David Hollis, Assistant Director of Legal and Governance, responded to some of the legal issues regarding the questions raised, indicating that his background was in procurement law, hence his involvement in the drafting of the policy.  Mr. Hollis stated that he did not consider the policy to be “risk averse”, stressing that the Council needed to work within a strict legal framework, being mindful of the potential for legal challenge.  Whilst the Council had been in contact with external lawyers and barristers generally about the issues, in connection with the drafting of the policy, which had provided a sound legal viewpoint, it was accepted that the Council had not taken an external viewpoint on some of the specific issues involved.  He stressed, however, that the Council was not averse to seeking external views on any issues it considered relevant, and was satisfied that the legal viewpoint taken was correct. The Council would be happy to consider making reference to the test of grave misconduct, and look at putting misconduct beyond criminal conviction, and to include relevant findings of civil liberty. In response to a further question by Annie O’Gara, regarding the Council’s discretion to exclude companies, Mr. Hollis stated that whilst the Council had a discretion to exclude companies, there was no requirement on the Council to specify how it would use that discretion. Whilst that was an option, there was a danger that not all circumstances would be covered, and that might limit the use of the discretion. It was therefore better to not limit the Council’s options by defining beyond the legal test.

5.5

Marianne Betts, Interim Director of Finance and Commercial Services, stated that the document was still in its policy development stage, and that the Council was happy to take the views and comments of interested parties to further shape the policy.  It was the officers’ view that strong statements needed to be made to suppliers, as part of the procurement process, and if it was not deemed that the current document emphasised this point, consideration would be given to reviewing it.   Ms. Betts reiterated the comments made in connection with using DEFRA’s Code of Conduct as a starting point as the Council wanted to base its policy on that of an organisation with credibility.  She stated that the aim of the wording of the document was to clearly set out the Council’s position to suppliers and commissioners, and that the wording with regard to discretion would provide the Council with the option of giving consideration to a company at any specific time on the basis that companies’ behaviour could change over time.