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Agenda item

How Sheffield City Council Wants to do Business - Ethical Procurement

Report of the Interim Executive Director, Resources



The Committee considered a report of the Interim Executive Director,  Resources, on a review of the Council’s commissioning cycle, specifically with regard to its ability to address tax compliance, ethical procurement, grave misconduct, living wage, blacklisting, local economic impact and social value.  The report set out a series of proposed revisions to protocols, process and tools associated with the topics, and running across the City Council and its supply chain, and focused on three specific key tools, social value tests, ethical code of conduct for suppliers and revised tender processes.




The report was supported by a presentation by Marianne Betts, Interim Director of Finance and Commercial Services, which focused on ethical procurement, one part of a wider piece of work.  Ms. Betts reported on what the Council was trying to achieve with ethical procurement, which would include driving the Council’s view of ethical behaviour as a standard throughout the supply chain and enabling greater return in social value in Sheffield.  In terms of making the Council effective, it was the aim to increase City Council spend in the local economy/market and stimulate local business growth and in terms of being efficient, the Council aimed to be cohesive in its messaging/engagement with suppliers/market, and have processes that drove the right outcome, rather than focused primarily on compliance.  Ms. Betts referred to the various draft proposals and revisions regarding how the Council held suppliers to account.




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




·                     Whilst other Codes of Conduct contain statements of intent, which are rarely acted on, the Council wanted to ensure this Code of Conduct, specifically its ethical standards, results in a positive change in terms of how the Council conducted its business.




·                     It was accepted that information-sharing with interested parties had not been as effective as it should have been and the Council was willing to engage further with such parties, to provide them with a further opportunity to contribute to the wording of the document.




·                     It was the intention that the document would be reviewed annually, as a minimum, or earlier if there were any major changes to warrant this.




·                     In terms of sharing the document with, and influencing, partners/other organisations, the Council wanted to get it right and prove the concept, though officers were shortly due to meet representatives from NHS England and the Chair of the Strategic Procurement Group in Yorkshire and Humber, with both organisations being keen to view the document.




·                     Whilst it was appreciated that there may be a lack of clarity to the document, it had always been the intention to take a slightly different approach, and not simply prepare a policy statement.  The document was not holistic, but made reference to a number of key aspects of a wider programme of work.  There were a lot of other background documents, such as contract standing orders which, all added together, would form a more holistic approach.




·                     Officers were very aware of the Council’s budget position, and value for money was fundamental, and would always be part of the dynamic. Regarding the supply chain, arrangements applied to sub-contractors, and issues such as zero hours were currently built in.




·                     If the Council was aware that any of its contractors were not paying the minimum wage, it would investigate this.




·                     One of the proposals in terms of the process involved the re-launch of Supply2Sheffield, which would allow a two-way conversation, and enable ongoing dialogue with suppliers, and with local companies in particular.




·                     Whilst officers would continue to look at how the Council commissioned and packaged its contracts, this element of the procurement process was not included in this specific piece of work.




·                     In terms of the packaging of contracts, and any likely adverse effects on small and medium-sized enterprises (SMEs), the increase in the contract threshold was removing the requirement of companies to tender up to that threshold, thereby removing the administrative burden. It was not believed that there would be any risks to SMEs and, indeed, was likely to result in an increase in local SMEs contracting for work.




·                     The living wage definition was based on that of the Living Wage Foundation.




·                     Suppliers were asked to provide the Council with any details in terms of any act of gross misconduct they had undertaken, as part of the tendering process and, in those cases where this was declared, the Council would make further investigations, as appropriate.  The Council would not undertake random checks on tenderers to validate the self-declaration on the basis that this would be viewed as unfair, but if issues subsequently came to light with contractors, this could amount to a breach.




·                     Although the law was unlikely to change post-Brexit, if there were any changes, officers would follow due process and seek appropriate approvals.




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; and




(b)       requests :-




(i)         that the comments and views now made be forwarded to the Interim Executive Director, Resources, in order to provide a steer on the outline ideas for “How Sheffield City Council would like to do business” to enable the relevant policies to be shaped;




(ii)        that every effort possible is made to ensure that information is shared with all interested groups and organisations in a timely and accessible manner; and




(iii)       the Interim Director of Finance and Commercial Services to (A) look at drafting a realistic timetable in terms of when the policies could become operative and (B) investigate further, the wording in terms of the Council’s discretionary powers, specifically with the aim of maximising the Council’s ability to use its discretion where appropriate.


Supporting documents: