Agenda and minutes

Select Committee - Commissioning - Wednesday, 29th January, 2014 10.00 am

Venue: Stour Room, Sessions House, County Hall, Maidstone. View directions

Contact: Denise Fitch  01622 694269

No. Item


10.00am - Keith Harrison, Chief Executive Action with Communities in Rural Kent pdf icon PDF 9 KB

Additional documents:


1.    Chairman welcomed Keith Harrison (KH) Chief Executive, Action with Communities in Rural Kent (ACRK ).


            Please see Select Committee Agenda Item 3 (pages 7 to 16)


2.    KH gave an overview of ACRK ’s ethos. It was set up with the primary aim to  provide advice and guidance to ensure that no one was disadvantaged because they lived or worked in a rural area.


3.    ACRK has, over the last 40 years, focused on community development activities and is currently supporting around 600 community-led organisations for example with  their regeneration projects.


4.    ACRK is funded by about 40 different organisations (i.e. private sector, individuals, EU, Kent public sector). There is recognition this is not an efficient funding mechanism but an unfortunate reality. 60% of funding streams not Kent (county based, from public or private sectors) funding.


5.    ACRK has changed/diversified. The charity is in a very different position to its thinking in 1992 (when existing KCC core-finance levels were set; they have varied within a £5,000 limit either way since.) This presents a major challenge. To continue to exist ACRK must undertake work which brings in the associated management fees which can in turn be used to fund the work ACRK  wants to do but cannot get funding for.

6.    KCC funding equates to 6% of ACRK core financing. Where work is co-financed by KCC each £1 of KCC funds has £10 in matched funding - contributors from public, private and civil society sectors, co-finance from Defra, which amounts to a mixed funding approach.


7.    The Chairman took questions for each of the Select Committee Members:


Q: How beholden is ACRK to its paymasters?  What would make the organisation a better one in terms of the number of funders / pay masters? How does KCC support ACRK and can it play a more important role in the provision of KCC services as it becomes a commissioning authority?


A: ACRK and KCC financial relationship very different to that of other County Councils and ‘their’ ACRKs; for example KCC annually fund ACRK £37,000, in Hampshire the funding is £300,000. Such disparities in funding effects stability and forces organisations such as ACRK to seek different fund sources to continue to exist, flourish and to enable research and investment in new ideas. It was suggested there should be a review of how KCC Directorates work with all VCSE organisations, Consideration of a more realistic core agreement for ACRK would be a good as a starting point as the relationship with KCC is vitally important.


Q: KCC Members /tax payers of Kent needed certainty of outcomes, who commissions?


A: Other Counties have a strategic over view. In Essex, for example the County Council Leader and Chief Executive have been meeting with RCC Essex (ACRK’s equivalent) twice yearly, and had an interesting and mature relationship. Kent is a huge organisation, working in many different directions. KCC talk about control, Essex talk of enablement. The Essex relationship model is still based on political  ...  view the full minutes text for item 11.


11.00am -Roger House, Chairman - Kent and Medway Region, Tim Colman, Director of Partnership Working Limited, Alison Parmar, Development Manager - Kent & Medway Federation of Small Businesses pdf icon PDF 20 KB

Additional documents:


(1)       The Chairman welcomed Mr House, Mr Colman and Mrs Parmar to the meeting and invited them to introduce themselves and outline the role of the Kent and Medway Federation of Small Businesses (KMFSB), before answering questions from Members of the Committee.


(2)       Mr House said the Federation of Small Businesses was the largest organisation representing small businesses with 190,000 members nationally and 6,500 in Kent and Medway.  The Federation had started as a lobby group and had extended its remit to support and represent small business on both national and local issues pertaining to the economy.  In Kent and Medway the FBS was organised into five branches, each with a small committee and team who liaised with national government and district and borough councils.  The KMFBS aimed to be a critical friend and bring forward solutions to problems. 


(3)       Mr Colman said he undertook a voluntary role within the KMFSB and focussed on procurement issues from the national to local level with a view to developing procurement practices that would benefit small and micro businesses.


(4)       Mrs Parmar said she acted as a link between the strategic / national FSB and KMFSB, a facilitator for KMFSB and KCC and between the FSB and small and micro businesses.  This could be through face to face contact, liaison with a range of media and other activities which contributed to ensuring that such businesses had the right knowledge to be successful.


Question – What practical steps could KCC take to get micro and small businesses involved in its work?  What opportunities are being missed by not involving micro and small businesses in its work?


(5)       Micro businesses (businesses with fewer than nine employees) account for between 84%-88% of the economy.  They need an education programme with practical help on tendering and a clear pathway to enable them to bid for contracts with the county council.


(6)       There is not a clear and simple system within KCC for individual teams to advise the corporate communications team of the intention to procure goods or services and consequently there is no single point of contact for businesses interested in tendering for work.  Neither is there a key email point on the website or person who could advise and assist small businesses about forthcoming tenders and the process to be followed to become a contractor with KCC.


Question – Are you aware of the Kent Business Portal?


(7)       Personally yes but it is important that thousands of business know about it and this requires constant messaging and communication. 


Question – What are the main barriers to trading with KCC?


(8)       There are five principal issues.


(a)       There is a lack of transparency in relation to low value contracts which could be of great interest to small businesses.  Contracts with a value of £5,000-£8,000 are not included in the Kent Business Portal.  Contracts of this size can be of considerable interest to small enterprises.


(b)       Micro and small enterprises often lack understanding of the procurement process including  ...  view the full minutes text for item 12.


12.00am - Jan Perfect, Chief Executive Case Kent pdf icon PDF 15 KB


(1)       The Chairman welcomed Mrs Perfect to the meeting and asked her to introduce herself before answering questions from Members of the Committee.


(2)       Mrs Perfect said CASE Kent was similar to an old-style council for voluntary services and to avoid mission drift and conflict of interest did not compete for contracts against its members. Mrs Perfect felt that CASE Kent would not be able to advise other organisations on how best to complete procurement documents if they were going to then compete against them.  CASE Kent worked with a range of charities from very small to large ones such as Age UK including   giving advice on legal issues such as setting up and in some cases closure.  Most of the work was with smaller charities which provided a range of services that were valued locally and by users. 


(3)       CASE Kent received an annual grant of £117,000 from the Families and Social Care directorate within KCC.  Originally the purpose of the grant had been to support the charitable sector but more recently FSC had been trying to assign responsibility for particular outcomes allied to their policies and strategies


(4)       Mrs Perfect said CASE Kent had successfully completed the Pre Qualification Questionnaire for the provision of services for children but did not proceed because of the nature of the contracts and the legality of some of the clauses – for example KCC Children Services right to discipline contractors’ employees.  CASE Kent had also tendered for the Men’s Sheds’ project and was interviewed.  The bid was, however, ultimately unsuccessful and Mrs Perfect thought this was because it was marginally more expensive than the successful tender.  KCC should consider may need extra margin for voluntary sector not just go with the cheaper provider. Cheapest does not always come with VFM for the service user and she was concerned that the effect of the current structure could lead to large and small voluntary sector organisations folding.


(5)       Commissioning may know what they want but procurement is almost mathematical. Thinking in simply business-like terms can stifle creativity and sharing of good practice / ideas across the sector. Why would you share in the new commissioning domain it does not make good business sense. 


(6)       Grant funding is not VAT eligible but contacts are. The final arbiter of whether or not VAT is liable is HMRC and they make decisions on a contract by contract basis. The sector is still waiting for HMRC to take a view but the outcome could have huge implications for the sector and associated costs. 


(7)       TUPE raises issues for the sector in terms of the transfer of staff and associated HR, governance and legal costs.


(8)       Tender bidding and presentation do not provide a level playing field regarding the quality of the service ultimately provided. Larger organisations can afford professional expertise for their bids. Smaller organisation are often resource light and do not have the capacity or the experience to complete tender documents. Tendering and contracting for specified services  ...  view the full minutes text for item 13.


Wrap up/key points


The Committee concluded that:


(1)       It would be useful to consider case studies and examples of good practice in commissioning and procurement.


(2)       If parish and town councils could use small contractors for low risk and small works it would create opportunities for small contractors to build a track record and be in a position to provide references however most town and parish councils are required to use a recommended list. 


(3)       So far the Committee had focussed on tendering for contracts but negotiated contracts with a chosen supplier are often advantageous.


(4)       It would be useful to consider studies undertaken elsewhere which sought to understand why public services cost more in rural areas compared with services in urban areas. 


(5)       It was clear from evidence provided earlier in day that businesses and the voluntary sector do not know where to get information about contract opportunities, find it difficult to identify the contracts worth pursuing and to understand the mechanics of the procurement process.


(6)       It might be important to retain grant opportunities for the charitable and voluntary sector as they often have good ideas for valuable but non-statutory services and are unlikely to be able to form consortia to bid for contracts. 


(7)       Based on the evidence received it appeared that KCC teams tended to use tried and tested contractors but awarding low value, low risk contracts to small enterprises or charitable organisations could make a significant difference to an organisation’s ability to survive.