corporate procurement strategy - wakefield council

Wakefield Council

Procurement StrategyJanuary 2021 - March 2022

Local prosperity, local jobs and better outcomes

1. Executive Summary 4

2. Current Challenges and Background Information 6

3. What is Social Value? 10

4. Delivery of priority specific Social Value Outcomes 12

5. Key Procurement Procedures 14

Contents

Wakefield district: people thrive, businesses succeed and visitors are welcome.

Our Priorities

Successful businesses

Growing a higher value economy and creating good jobs. Successful

people Reducing inequalities, growing skill levels,

enabling a good quality of life andsupporting families.

Successful council

Ambitious, enterprising, dedicated and efficient in delivering excellent services.

Successful places

Celebrating a unique cultural offer and creating vibrant communities that are

better connected.

l We intervene early

l We have real impact

l We champion good growth

The Wakefield Way - The principles that underpin how we work are:

l We help people help themselves

l We are business-minded and socially responsible

l We provide a positive customer experience

l We tackle poverty

l We keep people safe at times of vulnerability

l We are forward thinking

Figure 1

• Procurement Strategy approved

• Alignment of TOMS to Council Policy

• 12-18 month procurement pipeline agreed by services

• Procurement Service trained to use new tool

• Internal Procedures amended

• Revised toolkit made available to commissioners, procurers and external organisations

• Revised 10% SV weighting applied to all procurements over £100k*

• CPRs updated

• Council’s procurement pipeline published online

• Bid writing support and guidance made available to local businesses

• SV delivery report published

• Increased spend with local suppliers

• SV target achieved

• Start review of strategy

Delivery of priority specific social value outcomes

and supporting procurement procedures.

Procurement initiatives Value creation. Increased SV. Im

proved VFM

Procurement Strategy Implementation Plan

Success Measures

£10m of social value delivered through the Council’s procurement activity.*

£14m increase in spend by the Council with local suppliers.

10% SV weighting included in all procurement activity over £100k**

* As measured using TOMs method** Where permissible by law

Key

CPRs Contact Procedure Rules

VFM Value For Money

SV Social Value

TOMs Themes Outcomes Measures

December2021

March2022

August2021

April2021

January2021

Excellence in strategic procurement will drive and underpin our ambition to be a successful council - through innovation and maximising the impact of our spend in achieving successful places, successful people and successful businesses

Procurement Strategy 2021-2022 3

1 Executive Summary

Procurement is the process by which we obtain goods, services and works, but this is more than just purchasing 4

1.1 ‘Procurement is the process by which we obtain goods, services and works, but this is more than just purchasing. The procurement process covers the full life cycle of activities starting with the identification of needs, through to evaluation, purchasing and contract management. Procurement can range from purchasing day to day commodities to purchasing key strategic items such as large capital assets or commissioning a service or buying an entire service.’

The Duty of Best Value placed upon the Council under the Local Government Act 1999 (LGA 1999) requires the Council to make arrangements to secure continuous improvement in the way its functions are exercised, having regard to a combination of economy and efficiency and effectiveness. The commissioning and procurement functions play a key role in delivering this statutory obligation. The most recent statutory guidance published under the LGA 1999 in 2015 makes it clear that when considering its Duty of Best Value in commissioning and procurement it should consider the delivery of overall value, including social value.

1.2 The procurement strategy is one of the key enabling strategies of the Council because procurement forms part of almost every service the Council delivers. It can therefore support the Council to meet

its priorities of Successful People, Successful Places, Successful Businesses and Successful Council.

1.3 This strategy will build on the previous Procurement Strategy released by the Council in January 2019 which lasted until March 31st 2020. The previous strategy outlined three main initiatives which were:-

• Embedding Social Value in to the Council procurement procedures

• A new approach to category management

• Agile procurement

1.4 The main theme in this latest iteration of the Council’s Procurement Strategy will be the ‘Delivery of priority specific social value outcomes’ (Social, Economic and Environmental outcomes). This document will describe how this will be achieved through the Council’s procurement activity and how the Council will focus on those outcomes which can support local economic recovery and meet the Council’s climate commitments. In addition to this initiative the strategy will outline the key procurement procedures which will support these objectives.

1.5 This strategy will be in place until March 2022 at which point it will be reviewed to ensure it remains aligned to the Council’s priorities.


2 Current Challenges and Background Information

6

2.1 The Coronavirus Pandemic (COVID-19) has had and continues to have a significant negative impact on residents and businesses in the Wakefield district. The Council is supporting the local recovery and it understands that as one of the largest procurers of goods, services and works in Wakefield with an annual expenditure in excess of £0.3bn it can play a significant role helping the economy recover. The Council recognises that its procurement strategy is one of the underpinning strategies and is a lever it can use to aid economic recovery.

2.2 Wakefield Council is facing a financial pressure of £20.2m in 2020/21 caused by a reduction in local tax receipts and reduced income due to COVID-19.

2.3 In May 2019 the Council declared a climate emergency and pledged to become a carbon neutral organisation by 2030. This has subsequently led to the creation of a new directorate whose aim it is to de-carbonise the Council and its operations.

2.4 There is increasing uncertainty and growing concern about the impact leaving the European Union will have on the local economy of Wakefield as the terms of the trade deal are yet to be finalised and the possibility of a no deal Brexit exists.

2.5 Procurement forms part of almost every service the Council delivers and is a key function within the Council. In 2019/20 the Council spent £315m with 5,000 suppliers to provide goods, services and works to the residents of the District.

2.6 Figure 2 on the following page is a breakdown of the Council’s expenditure of £315m in the financial year 2019/20. The Council’s spend has been divided by which service, goods or works is being procured and not by which Service Area is commissioning the service, goods or works.


Figure 2. Wakefield Council’s Expenditure April 2019 to March 2020 by Service, Goods or Works and aligned to the Council Priorities.

25.79%

59.52%

14.69%19.19%

54.32%

26.49%

29.07%

40.93%

12.97%

0.06%

16.97%

Successful People Successful Business Successful Places

n Health & Well-being 24m

n Children & Young People and Education 43m

n Adults 99m

n Technology 7m

n Business Services 21m

n Professional Services 10m

n Culture 0m

n Transportation and Movement 14m

n Highways and Infrastructure 18m

n Construction, Property & Regeneration 43m

n Environment 30m

8

Number of Suppliers Percentage of Total Supplier Base

Supplier Size Percentage of Expenditure

Expenditure

4,314 82.4% SME 57.1% £180,088,322922 17.6% Large 42.9% £135,574,9145,236 £315,663,236


Local Supplier/Not Local Percentage ofExpenditure

Expenditure

1,599 30.5% Local 28.4% £89,496,4933,637 69.5% Not Local 71.6% £226,166,7435,236 £315,663,236


Local Supplier/Not Local Supplier Size Expenditure

1,477 28.2% Local SME £72,953,0342,837 54.2% Not Local SME £107,135,288122 2.3% Local Large £16,543,459800 15.3% Not Local Large £119,031,4555,236 £315,663,236

Expenditure Ranges Number of Suppliers Expenditure

£25,000 and Under 4,229 £15,560,015£25,001 - £99,999 534 £27,777,524£100,000 - £250,000 261 £40,516,875£250,000 212 £231,808,822

5,236 £315,663,236

2.7 Below in Figure 3 is the Council’s Supplier Spend data from the financial year ending 31 March 2020.

Figure 3.

2.8 Expenditure with SMEs by Wakefield Council increased by 12.7% in the financial year of 2019/20 compared with 2018/19 and the amount spent by the Council with local suppliers increased by 10.4% during the same time period.

*All figures exclude school expenditure


3 What is Social Value?

10

3.1 Social Value is the positive impact an organisation has further to the activities it carries out. These can be economic, social and environmental impacts. In some business sectors this is referred to as Sustainability and Corporate Social Responsibility (CSR).

3.2 On 31 January 2013 The Public Services (Social Value) Act 2012 (SVA) came in to effect https://www.legislation.gov.uk/ukpga/2012/3/pdfs/ukpga_20120003_en.pdf

3.3 The SVA requires the Council to consider how a procurement could improve the economic, social and environmental well-being of the District and how, in conducting the procurement, the Council might act with a view to securing such improvement. The obligation under the SVA is to consider Social Value in the pre-procurement phase, which means that thought should be given to improving Social Value at the commencement of the Council’s commissioning process.

3.4 The SVA applies to the procurement of services contracts over the relevant EU thresholds (outlined in the Public Contracts Regulations 2015 (PCRs)) only.

3.5 In 2018 the Council amended its procurement procedures to reflect its obligations under SVA and the Council went beyond the requirements of the SVA by requiring that Social Value is considered during the pre-procurement phase of every procurement exercise relating to a contract with a value in excess of £25,000 (i.e. contracts relating to goods, works and concessions as well as services). This approach aligned with the most recent statutory guidance in relation to the Duty of Best Value published under the LGA 1999. In 2019/20 there has been an increase in the amount of expenditure with local suppliers of 10.4%.

3.6 There are significant local economic, social and environmental benefits to working with local suppliers:-

• Job creation and increased living standards and levels of prosperity across the district through higher levels of employment.

• Increased re-spend in the local district (local multiplier effect) which supports other local businesses, 2nd tier suppliers and therefore increasing the value of the local economy.

• Increased skill levels.

• Reduced poverty

• Shorter supply chains with reduced carbon footprints


4.1 The Economy of Wakefield will be facing some significant head winds during the next few years as it recovers from impact caused by the Coronavirus Pandemic and UK leaving the EU. As such the Council recognises that Social Value can play a role in helping the economic recovery and in essence increase the value for money the Council achieves from its procurement activity.

4.2 The Social Value Outcomes identified in each procurement exercise will be aligned to Council priorities but they will vary and they will be dependent on the subject matter of the procurement itself e.g. a procurement exercise for a Refuse Collection Vehicle could be linked to a positive environmental outcome or procurement in adult social care could be linked to a positive social outcome.

4.3 The Council will utilise the Themes Outcomes Measures (TOMs - see Figure 4. in the Appendix) method to measure the amount of Social Value delivered through its contracts. The TOMs is a nationally recognised reporting standard used in both the Public and Private sector. The TOMs will form part of the Commissioners and Procurers Social Value Toolkit.

4.4 By using the TOMs the Council will be able to align specific social value outcomes which meet its priorities and aspirations for the District: reducing poverty through supporting good jobs, better incomes and well-being, increasing skill levels, creating a higher value economy, developing a great place and cultural offer, improving the environment for all residents whilst becoming a greener organisation. Further details can be found in the Economic Strategy https://www.wakefield.gov.uk/business/economic-strategy

4

12

Delivery of priority specific social value outcomes

4.5 When considering weightings used in the evaluation of tenders relating to contracts with a value above £100,000 there will be no prescribed upper limit on the Social Value weighting. Subject to the requirements of Procurement Law the Council will increase its minimum weighting from 5% to 10% Social Value in every tender where permissible. In 2019/20 the Council let 83 contracts worth a total £53m which were valued over £100,000 and during the next 18 months there are in excess of 100 procurement exercises due to take place.

4.6 By increasing the weighting and implementing a new process for embedding social value the Council aim to deliver £10m of Social Value by March 2022.

4.7 The procurers and commissioners toolkit will ensure Social Value is considered and embedded at the pre-procurement phase of the process and, where appropriate, to apply Social Value to ensure it is compliant with Procurement Law. Guidance notes on the wording of questions in the procurement process will be provided in the toolkit.

4.8 Market permitting (availability of local suppliers) for all procurement exercises and purchases between £25,000 and £100,000 the commissioners and procurers must ensure they have engaged/alerted the local market to the opportunity to work with the Council.

Any exceptions to this process must be documented during the procurement process. The Council believes that in making this step change it will increase the spend with local suppliers by £14m by March 2022.

4.9 With every purchase under £25,000 which is subject to low value provision of Contract Procedure Rules http://www.wakefield.gov.uk/Documents/procurement-tendering/contract-procedure-rules.pdf local suppliers must be used wherever possible. Any exceptions to this process must be documented during the procurement process.

4.10 All Social Value outcomes will be included in the contract as a contractual requirement to be delivered during the life of the contract.

4.11 To enable the robust reporting and measuring of Social Value across the Council the use of the Social Value Portal will be necessary.

4.12 Figure 4 in the appendix provides an example of how the TOMs can be linked to the Council’s priorities. This table is not exhaustive and there are other measures available in the TOMs. The national TOMs are also linked to the UN Sustainable Development Goals https://www.un.org/sustainabledevelopment/sustainable-development-goals/


5.1 The main areas of focus for the Council’s Procurement Service until March 2022 are:-

• Category Management

• Value for Money and Social Value

• Governance & Process

5.2 Category management

• The Council’s Procurement Service uses a category management approach to deliver tactical, day-to-day and project management support for its service users. Using a category management approach the Council’s Corporate Procurement resources are aligned to the corporate functions so as to create subject matter experts in specific areas of Council expenditure.

• The Corporate Procurement Service works with internal budgetholders, suppliers and the VCSE sector to deliver innovation and best value for money for the Council.

• Category management is key to supporting good contract management and the seamless transition from the one contract to another.

• All Council Contracts include quality and performance standards which are monitored by the service directorates.

5

14

Key Procurement Procedures

• Key to successful Category Management is to have anunderstanding of the Council’s procurement needs and this is achieved through the category plans which provide visibility of existing Council contracts and when they are due to expire. This allows the Council to plan its procurements effectively to deliver services to the district.

• Using Category Management the Council has improved; visibility ofits spend, ability to increase the monitoring of Social Value outcomes, increased efficiencies and aggregation of expenditure, improved compliance, better project management and forward planning by its services.

• At a procurement service user level, Category Managementmeetings will be arranged to understand the needs of the service area, build project pipelines and deliver procurements effectively. Spend data will also be reviewed in these meetings to support fact-based decisions e.g. addressable and non-addressable spend.

5.3 Value for Money and Social Value

• The Council recognises that value for money is not purely about price and cost, and that quality is an important element to determining the overall value obtained through a procurement exercise and delivered through the life of a contract.

• Where applicable a whole life costing approach is taken when evaluating tenders.

• Social Value will be a key component of the Council’s procurement evaluation criteria and this will enable it to deliver greater benefits through its procurement activity for the district (see Figure 4).

• To increase the chances of the local businesses and voluntary sector organisations securing contracts the Council will:-• Ensure early market engagement and consultation and where

possible co-design services to increase levels of innovation in service delivery.

• Where appropriate consider breaking down contracts into smaller lots, therefore reducing their size and financial risk which could make them more attainable for smaller local based suppliers.

• Improve the capability of local suppliers to tender for Council contracts e.g. provide bid writing courses and overviews of the process.

• Promote contract opportunities with the Council e.g. Wakefield First, Council Website, through 3rd party trade organisations, Yortender etc.

• Provide forward visibility of the Council’s pipeline of procurement activity. This details what the Council plans to buy, and when.


5.4 Governance & Process

• The Council’s procurement activity takes place within a corporatestructure supported by the Council’s Constitution, Contract Procedure Rules, Procurement Strategy, procurement guidance and wider regulatory framework e.g. Public Contracts Regulations 2015 and Financial Procedure Rules.

• The full list of internal procurement services the Council delivers is as follows:• Provide regular procurement training to officers, including sharing

best practice via procurement forums with Commissioners and Procurers in the Council

• Deliver consistent procurement category management across the Council i.e. review of project pipelines and spend analysis

• Provide procurement management information • Advise and support on the development of tenders, route to

market and specifications • Advise and support on business cases, tender evaluation and

options appraisals • Provide support for market engagement

• Support the development of procurement frameworks and commissioning, ensuring 3rd party spend is managed and understood

• Provide guidance and support to ensure all procurements adhere with procurement law

• Provide input into grant funding applications by the Council • Coordinate and moderate tender evaluation processes • Procurement project planning

• The Council’s Contract Procedure Rules (CPRs) and procurementprocesses ensure adherence to its statutory and local obligations. The CPRs are reviewed on an annual basis and minor changes are required within the year then adjustment to procedures will be made. Updates to the CPR’s are briefed out to officers in the Council as and when they occur. The Council’s aim is to deliver an agile and low friction procurement service.

• To support the Council’s aim of becoming carbon neutral by2030 the Council will embed sustainable sourcing and procurement practices into its processes where permissible. This will have a wider impact on suppliers’ practices, standards and specifications in the supply chain.


• The Council will continue to source goods that are fairly and ethically traded. This also includes adhering to the processes outlined in the Council’s Modern Slavery and Human Trafficking Statement.

• The Council has a robust procurement risk management framework in place through its policies and practices, this is reported back to the Audit and governance committee on an annual basis through a Procurement Assurance Report.

• New Public Sector Procurement legislation will be created at the endof the transition period and when this occurs changes will berequired to the Council’s internal procurement procedures.

• The initiative and procedures outlined in the Procurement Strategyseek to ensure procurement activity achieves value for money, grows the local economy, and that the Council is compliant with its statutory obligations in accordance with the law relating to public procurement including the Public Contracts Regulations 2015.

• As per the Council’s People Strategy and its strategic goal to providea best in class highly skilled workforce the procurement service will continually invest in developing its officers. This investment will be in the form of coaching and development, competency based frameworks and more formal training such as professional qualifications from the Chartered Institute of Procurement and Supply (CIPS).

• The Council will continue to develop its partnerships andcollaboration with other local authorities, public sector purchasing bodies e.g. YPO. Existing partnerships and collaborations include the Strategic Procurement Group (SPG) for the Yorkshire and Humber region, Local Government Association and Crown Commercial Services (CCS).

• The Council’s Contract Procedure Rules (CPR’s) will be updated to embed the changes described in this document.


Council Priority

Social Value Outcome

TOMs Measure

Businesses Economic Total amount (£) spent with VCSEs within your supply chain

Businesses Economic Provision of expert business advice to VCSEs and MSMEs (e.g. financial advice / legal advice / HR advice/HSE)

Businesses Economic Provision of expert business advice to help VCSEs and MSMEs achieve net zero carbon by 2030

Businesses Economic Equipment or resources donated to VCSEs (£ equivalent value)

Businesses Economic Meet the buyer’ events held to highlight local supply chain opportunities

Businesses Economic Percentage of contractors in the supply chain required (or supported if they are micro and small business) to pay at least Real Living wage

Businesses Social Percentage of procurement contracts that includes commitments to ethical procurement, including to verify modern slavery and other relevant requirements.

Businesses Social Number of supply chain audits to be undertaken in the supply chain, to identify and manage the risk of modern slavery occurring in relation to the contract

Businesses Social Number of people employed in the supply chain to identify and manage the risk of modern slavery occurring in the supply chain, in relation to the contract

Businesses Economic Percentage of invoices on the contract paid within 30 days

Businesses Social Percentage of contracts with the supply chain on which Social Value commitments, measurement and monitoring are required

People Economic Percentage of local employees (FTE) on contract

People Social No. of 18-24 y.o. employees (FTE) hired on the contract who are rehabilitating young offenders as a result of a recruitment programme

People Social No. of disabled employees (FTE) hired on the contract as a result of a recruitment programme

People Social Percentage of women (FTE) hired on the contract

People Social Percentage of employees (FTE) BAME hired on the contract

People Social Meaningful work placements that pay Real Living wage according to eligibility - 6 weeks or more (internships)

People Social Employment taster days for those interested in working in the real estate and construction industry

People Social Equality, diversity and inclusion training provided both for staff and supply chain staff

People Social Prime contractor’s median gender salary pay gap for staff - Small and Medium enterprises

People Social Initiatives to be taken to tackle homelessness (supporting temporary housing schemes, etc.)

People Social Initiatives to support rough sleepers - including training for security and night staff, opening up facilities spaces (e.g. showers or additional beds when temperature drops) after hours

People Social Initiatives taken or supported to engage people in health interventions (e.g. stop smoking, obesity, alcoholism, drugs, etc.) or well-being initiatives in the community, including physical activities for adults and children

People Social Initiatives to be taken to support older, disabled and vulnerable people to build stronger community networks (e.g. befriending schemes, digital inclusion clubs)

AppendixFigure 4. National Themes Outcomes Measures (TOMs) aligned to Council Priorities

18

This table is not exhaustive and there are other measures available in the TOMs. The national TOMs are also linked to the UN Sustainable Development Goalshttps://www.un.org/sustainabledevelopment/sustainable-development-goals/

Council Priority

Social Value Outcome

TOMs Measure

Places Economic Total amount (£) spent in LOCAL supply chain through the contract

Places Environmental Savings in CO2 emissions on contract achieved through de-carbonisation (specify how these are to be achieved)

Places Environmental Policy and programme to achieve net zero carbon by 2030 including monitoring plan with specific milestones (issued or to be issued by the end of 2020)

Places Environmental Carbon savings from energy efficiency measures on site (e.g. increased use of renewables)

Places Environmental Embodied Carbon reductions in CO2e emissions against baseline

Places Environmental Offset embodied carbon emissions from construction material

Places Environmental Carbon reductions through energy efficiency measures or renewables - building operations - (e.g. REEB benchmark or 3 year baseline)

Places Environmental Car miles saved on the project as a result of a green transport programme or equivalent (e.g. cycle to work programmes, public transport or car pooling programmes, etc.)

Places Environmental Value of local partnerships to implement circular economy solutions

Places Environmental Hard to recycle waste diverted from landfill or incineration through specific recycling partnerships ( e.g. Terracycle or equivalent)

Places Environmental Waste management verification policies: audit hierarchy, downstream audits for waste stream

Places Environmental Percentage of procurement contracts that includes sustainable procurement commitments or other relevant requirements and certifications (e.g. to use local produce, reduce food waste, and keep resources in circulation longer.)

Places Environmental Supply Chain Carbon Certification (Carbon Trust Standard for Supply Chain or equivalent independently verified) - achieved or to achieve for current year

Places Environmental Percentage of NEW buildings achieving BREEAM Rating
