Venue: Framland Committee Room, County Hall, Glenfield. Leicestershire
Contact: Mr. B. M. Smith (Tel. 0116 305 6036) Email. ben.smith@leics.gov.uk
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Apologies. Apologies for absence were received from Cllr Jenkins (Cambridgeshire County Council) and Cllrs Benton and Holdich (Peterborough City Council). |
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Chairman's Announcement. Minutes: The outgoing Chairman, Cllr. Thomas addressed the Management
Committee, thanking members and officers for their contribution during what had
been a busy 2010/11 in which the Director of ESPO had retired and a Business
Strategy Review had been undertaken. |
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Election of Chairman for 2011/12. ( Minutes: It was proposed, seconded and resolved that Dr R K A Feltham
CC be elected as Chairman for 2011/12. |
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Cllr. R. K. A. Feltham - in the Chair. |
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Election of Vice Chairman for 2011/12. (Cllr Holdich has been nominated by Peterborough City Council.) Minutes: It was proposed, seconded and resolved that Cllr J Holdich,
OBE be elected Vice Chairman for 2011/12. |
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Minutes: The minutes of the meeting held on 25 March 2011 were taken
as read, agreed and signed as a correct record. |
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Urgent Items. Minutes: There were no urgent items. |
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Declarations of interest. Minutes: There were no declarations of interest in respect of items
on the agenda. |
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Change to the Order of Business. Minutes: The Chairman sought and obtained the consent of the
Committee to vary the order of business from that set out in the agenda. |
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Exclusion of the Public. Minutes: RESOLVED: That under Section
100(A)(iv) of the Local Government Act 1972 the public
be excluded from the meeting on the grounds that it will involve the likely
disclosure of exempt information during consideration of the following items of
business entitled: ‘Legal Claim against ESPO’ (Paper K) as defined in paragraphs 3, 5 and
10 of Schedule 12A of the Act; and ‘Supplementary Information Informing the ESPO Business Strategy Review
Project Closure Report’ (Paper L) as defined in paragraphs 3, and 10 of
Schedule 12A of the Act; and, in all circumstances of the case, the public interest in maintaining
the exemption outweighs the public interest in disclosing the information. |
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Legal Claim against ESPO. (Exempt report of the Consortium Secretary) Exempt under Paragraphs 3, 5 and 10 of Schedule 12A Minutes: The Management Committee received an exempt report of the
Consortium Secretary which provided an update on the legal claim noted in the
Statement of Accounts for 2009/10. A copy of the exempt report, marked ‘K’ is
filed with these minutes. The exempt report was not for publication by virtue of
paragraphs, 3, 5 and 10 of Section 12A of the Local government Act 1972. RESOLVED: That the latest position in respect of the
legal claim and the escalation of costs which are at risk be noted. |
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ESPO Business Strategy Review: |
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Supplementary information Informing the ESPO Business Strategy Review Project Closure Report. (Exempt Joint Report of the Consortium Secretary and Consortium
Treasurer) Exempt under Paragraphs 3 and 10 of Schedule 12A. Minutes: The Management Committee considered an exempt report of the
Consortium Secretary and Consortium Treasurer which set out supplementary
information informing Paper ‘B’, ESPO Business Strategy Project Closure Report,
considered under Minute 72b below. A copy of the exempt report, marked ‘L’ is
filed with these minutes. The exempt report was not for publication by virtue of
paragraphs 3 and 10 of Section 12A of the Local Government Act 1972. RESOLVED: That it be noted
that the Phase 1, 2 and 3 reports (attached as appendices to the report) have
been delivered and that they be accepted and approved. |
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[The meeting then reconvened into public session]. |
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Project Closure Report and Outline Implementation Programme. (Joint Report of the Consortium Secretary and Interim Director) During discussion of Item 6a above, the
Chairman will be asked to consider Item 17 on the agenda which will involve the
likely exclusion of the public. Additional documents: Minutes: The Management Committee received reports of the Consortium
Secretary and Consortium Treasurer, the purpose of which was to seek formal
agreement to close the Review of ESPO’s Business
Strategy and to recommend implementation of the Review. Copies of the reports,
marked ‘B’ and ‘C’ respectively, are filed with these minutes. Arising from discussion (and with reference to report ‘L’
above, minute 72a refers), the following principal points were noted: i)
The Business Strategy Review had been member led
and had included three member workshops. Recommendations on the way forward had
been presented by the independent consultants following each of the three
stages, with consultation and detailed input into the proposed review outcomes
from members and officers within each of the Consortium authorities; ii)
Concern was raised regarding the extent to which
alternative governance models, particularly that of a limited company, which
might mitigate risk had been explored and given sufficient weight in forming
the Review conclusions and recommendations; iii)
It was helpful to consider reports ‘B’ and ‘C’
together, particularly since one of the workstreams
(Legal and Governance) recommended to take forward the Review conclusions could
address the concerns raised in regard to consideration of alternative
governance models; iv)
The Outline Implementation Plan had been
developed and supported from the independent consultants’ conclusions and
recommendations by officers in each of the Consortium Authorities, with
individual officer workstream leads from
Warwickshire, Leicestershire, Cambridgeshire and Lincolnshire respectively
identified to lead its implementation; v)
In response to concerns raised about the
management of business risk, it was noted that the Business Strategy and
Efficiency Workstream, contained in the Outline
Implementation Programme, included the development of a new business risk
strategy. That work had already begun and was continuing, as evidenced in the
Management of Business Risk report contained elsewhere on the agenda for the
meeting [minute 79 refers]; vi)
If members wished to reap the benefits of
aggregated demand and lower procurement costs such as through national Pro5 and
energy contracts, it was inevitable that some residual risk would always remain
following mitigation work to reduce levels of risk being undertaken. RESOLVED: (a)
That
the Review has been completed in line with the original project objectives and
that its closure be approved; (b)
That the
project’s stakeholders be notified of the approval of project closure, and of
arrangements for implementation of the outcome of the Review; (c)
That
staff in Member Authorities, key customers and suppliers and other stakeholders
who have contributed to the Review be thanked for their involvement; and (d)
That
the Outline Implementation Programme be approved, noting that the Legal and
Governance Workstream would address the concerns
raised in regard to consideration of alternative governance models (para. 72 b) (ii) above refers); (e)
That it
be noted that a ‘kick off’ meeting would be arranged for all workstream leads in order to confirm the programme plan and
timescales; (f)
That
the development of the Programme Initiation Document in preparation for
submission to the next Management Committee be approved; (g)
That
the appointment of a Programme Manager be approved; and (h)
That
approval for the recruitment of a permanent Director of ESPO be
deferred for the time being. |
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Outline Implementation Programme. (Joint Report of the Consortium Secretary and Consortium Treasurer) Additional documents: Minutes: [Following a change to the Order of Business, this item was considered as
part of minute 72c) above]. |
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Outline ESPO Four Year Strategy. (Report of the Interim Director) Additional documents: Minutes: The Management Committee considered a report of the Interim
Director which outlined the nature of the Business Strategy and Business Plan,
which would underpin the new ESPO governance and risk framework, and the
process to achieve their final approval. A copy of the report, marked ‘D’, is
filed with these minutes. Arising from discussion the following points were noted: i)
The Interim Director confirmed that measures of
success would be included in the new Business Strategy and Business Plan, as
shown in Appendix 1 to the report. An example would be the creation of an
internal scorecard regarding efficiencies such as warehouse picking rates per
hour. It was also recognised that it would be important to be able to
demonstrate measures of success to strategic key stakeholders, such as through
benchmarking exercises; ii)
Whilst there was a corporate objective of
meeting a minimum 3.5% return on capital employed, it should be remembered that
ESPO was a not for profit buying organisation and there was a balance to be met
between creating an operating surplus and ensuring best value contracts were
achieved and minimising procurement costs to customers. RESOLVED: a)
That the outline ESPO Four Year Strategy be noted;
and b)
That the draft Business Strategy and Business
Plan be submitted to the next meeting of the Management Committee. |
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(Report of the Interim Director) Additional documents: Minutes: The Management Committee considered a report of the Interim
Director which provided an update on the action and progress made since its
last meeting. A copy of the report, marked ‘E’, is filed with these minutes. Arising from questions, the Director confirmed that: i)
As part of the efficiency savings being sought,
drivers had undertaken fuel efficiency driving courses which had so far yielded
a 2% fuel saving, benchmarking against couriers and private sector companies
would commence shortly and the number of times per week organisations were
offered for deliveries would be reviewed with a view to improving the capacity
loads of vans and lorries; ii)
Energy was purchased on behalf of customers
twelve months in advance to allow for relative certainty in costs going
forward. At the request of members, a copy of the next Energy newsletter would
be provided for information; iii)
In terms of developing sustainable energy
sources, ESPO continued to provide a successful Green Catalogue for customers
and was also looking at the possibility of installing a wind turbine (five year
invest to save return) and/or solar panels (12 year invest to save return) at
the Grove Park premises. RESOLVED: That the contents of the report be noted and approved. |
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(Report of the Interim Director and Consortium Treasurer) During discussion of Item 9 above, the
Chairman will be asked to consider Item 18 on the agenda which will involve the
likely exclusion of the public. Additional documents: Minutes: The Management Committee considered a report of the Interim
Director and Consortium Treasurer which set out the outturn for 2010/11, with
explanations for the more significant variances. A copy of the report, marked
‘F’ is filed with these minutes. [Further details informing the Outturn
2010/11, of a commercially sensitive nature, was considered under exempt
business in Minute 77 below]. Arising from discussion the following principal points were
noted: i)
Turnover of £86.5 million was down 3% on the
previous year, due to energy price decreases rather than any volume reductions; ii)
Distribution of the surplus for 2009/10 remained
pending following a decision of the Management Committee in June 2010; iii)
The continuation of the bonus scheme for
employees was currently under review, in consultation with the unions and
employees. A report seeking a decision of the Management Committee as to
whether that element of employees’ terms and conditions should be discontinued
and ‘bought out’ would be presented in due course; iv)
The further proposed allocation of £0.4 million
to implement the recommendations of the Business Strategy Review would be
inclusive of any costs arising from the exploration of alternative governance
models within the legal and governance workstream
(see Minute 72 b) above). RESOLVED: a)
That the draft outturn for 2010/11 be approved; b)
That the reserve of £0.4 million for the
implementation of the Business Strategy Review be approved; c)
That the allocation of the surplus for 2010/11
should remain held in reserves pending a decision on distribution. |
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Exclusion of the Public. Minutes: RESOLVED: That under Section
100(A)(iv) of the Local Government Act 1972 the public
be excluded from the meeting on the grounds that it will involve the likely
disclosure of exempt information during consideration of the following item of
business entitled: ‘’Supplementary Information Informing the Outturn 2010/11” (Paper ‘M’); as defined in paragraphs 3 and 10 of Schedule 12A of the Act and, in all
circumstances of the case, the public interest in maintaining the exemption
outweighs the public interest in disclosing the information. |
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Supplementary Information Informing the Outturn 2010/11. (Exempt Report of the Interim Director and Consortium Treasurer) Exempt under Paragraphs 3 and 10 of Schedule 12A. Minutes: The Management Committee considered an exempt report of the
Interim Director which set out further supplementary information regarding
Paper ‘F’, Outturn Report 2010/11 [considered under Minute 75 above] which
contained details of a commercially sensitive nature. A copy of the exempt
report, marked ‘M’, is filed with these minutes. The exempt report was not for publication by virtue of
paragraphs 3 and 10 of Section 12A of the Local Government Act 1972. RESOLVED: a)
That the Service Line Income and Expenditure
Summary contained in Appendix 1 be approved; b)
That the Service Line Year to Date results
contained in Appendix 2 be noted. |
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[The meeting then reconvened back into public session.] |
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Annual Report and Draft Statement of Accounts 2010/11. (Joint Report of the Interim Director and Consortium Treasurer) During discussion of Item 9 above, the Chairman will be asked to consider Item 15 on the agenda which will involve the likely exclusion of the public. Additional documents:
Minutes: The Management Committee considered a joint report of the
Interim Director and Consortium Treasurer which provided an update on the
amended Accounts and Audit Regulations 2011 and transition to producing the
Statement of Accounts under International Financial Reporting Standards ( Members noted and welcomed the Interim Director’s reference,
on page 6 of the Annual Report 2010/11, to the contribution and dedication of a
number of long serving ESPO staff. In noting the significant governance issue referred to on
page 48 of the draft Statement of Accounts, the Interim Director confirmed that
a review of the Consortium Code of Practice would be undertaken once the Legal
and Governance Workstream, from the Review outcomes,
had finalised its documentation. RESOLVED: a)
That the changes to b)
That the Annual Report 2010/11(attached as
Appendix A to the report) be approved; c)
That the draft Statement of Accounts for 2010/11
(attached as Appendix B to the report) be noted; and d)
That on behalf of the Management Committee, the
Interim Director be asked to thank all the staff referred to on page 6 of the
Annual Report 2010/11 for their contribution, dedication and long service which
was much appreciated, and in particular to the six named staff who had been
with ESPO from its inception. |
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Management of Business Risk. (Report of the Interim Director) During discussion of Item 11 above, the
Chairman will be asked to consider Item 19 on the agenda which will involve the
likely exclusion of the public. Additional documents:
Minutes: The Management Committee considered a report of the Interim
Director which outlined the business processes and risk management activities
to manage all procurements generally but to underpin and properly risk manage
the procurement risk activities in respect of Pro5 in particular. It also
provided notification of a number of Pro5 procurement projects identified as
warranting referral to the Management Committee [considered in greater detail
under exempt business of a commercially sensitive nature under Minute 81
below]. A copy of the report, marked ‘H’, is filed with these minutes. In respect of what the Interim Director should feel
constituted a level of risk in respect of procurement projects that should be
escalated to the Management Committee for decision, members were of the opinion
that this should be left to his judgement, in accordance with ESPO’s financial regulations and contract procedure rules. Where the Interim Director felt risk mitigation still left a
potentially high residual risk, it was felt then that the project should be
brought to the attention of the Management Committee for its consideration. RESOLVED: a)
That the actions taken to date and the future
planned actions to the improved management of risk be noted; b)
That it be noted that the framework agreements
which support ESPO’s catalogue sales will be subject
to a risk assessment; c)
That it be approved that those procurement
projects where residual risk is regarded as potentially high will be referred
to the Management Committee for decision; d)
That a further report should be submitted to the
next meeting of the Management Committee outlining progress made. |
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Exclusion of the Public. Minutes: RESOLVED: That under Section
100(A)(iv) of the Local Government Act 1972 the public
be excluded from the meeting on the grounds that it will involve the likely
disclosure of exempt information during consideration of the following item of
business entitled: ‘’Supplementary Information Informing the Management of Business Risk
Report” (Paper ‘N’); as defined in paragraphs 3 and 10 of Schedule 12A of the Act and, in all circumstances
of the case, the public interest in maintaining the exemption outweighs the
public interest in disclosing the information. |
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Supplementary Information Informing the Management of Business Risk Report. (Exempt Report of the Interim Director) Exempt under Paragraphs 3 and 10 of Schedule 12A. Minutes: The Management Committee considered an exempt report of the
Interim Director which set out further supplementary information regarding
seven procurement projects whose business cases identified detail of a
commercially sensitive nature. The information supplemented Paper ‘H’,
Management of Business Risk, considered under Minute 79 above. A copy of the
exempt report, marked ‘N’, is filed with these minutes. The exempt report was not for publication by virtue of
paragraphs 3 and 10 of Section 12A of the Local Government Act 1972. RESOLVED: a)
That the contents of the report be noted and
that the business cases for each of the procurement contracts appended to the
report, marked 1-7, be approved; b)
That the Interim Director be authorised to award
the contracts subject to the internal risk assessment procedures that are being
put in place; c)
That it be noted that only those projects where
residual risk is regarded as potentially high will there be an intention to
refer to the Management Committee for final approval to any contract award. |
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[The meeting then reconvened into public session]. |
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Review and Revision of the Financial Regulations and Contract Procedure Rules. (Joint Report of the Interim Director, Consortium Secretary and Consortium Treasurer) Additional documents:
Minutes: The Management Committee considered a joint report of the
Interim Director, Consortium Secretary and Consortium Treasurer, the purpose of
which was to seek approval for revised financial regulations and contract
procedure rules, which had been updated in order to align with those of the
servicing authority. A copy of the report, marked ’I’, is filed with these
minutes. RESOLVED: That the key changes made to the ESPO Financial Regulations
and Contract Procedure Rules, contained in appendices 1 and 2 of the report, be
approved. |
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National Framework Agreement for Catering Services and Urgent Action Taken by the Interim Director in Relation to School Catering Services. (Joint Report of the Interim Director and Consortium Secretary) Minutes: The Management Committee considered a report of the Interim
Director which sought approval for the award of four elements of a National
Framework Agreement for Catering Services, the fifth having been approved
between meetings under urgent action taken by the Interim Director in relation
to School Catering Services and in consultation with the Chairman and Vice
Chairman. RESOLVED: a)
That the contents of the report be noted; b)
That the urgent action taken by the Interim
Director to award that part of the framework covering education catering on 11
May 2011 be noted; c)
That the provision of a national framework
agreement for catering services be approved; and d)
That the Interim director be authorised to award
the remaining elements of the framework, as detailed in paragraph 11 of the
report. |
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Date of Next Meeting. Please note that the date of the next meeting of the
Committee has been changed from Minutes: It was noted that representatives of Norfolk County Council
would be unable to attend the suggested date for the next meeting of the
Management Committee due to a meeting of its County Council scheduled to be
held on the same day. RESOLVED: a)
That officers be requested to canvass an
alternative date for the next meeting of the Management Committee; b)
That a future meeting of the Management
Committee be held at ESPO Headquarters, Grove Park, to together with a tour of
the operational facilities for new and existing members. |