Audit Committee Tuesday 3rd May 2016
Please note that this meeting has been postponed – the revised meeting date will be confirmed as soon as possible http://www1.somerset.gov.uk/council/board9/CancelleationAudit.pdf
Statement (with questions) to Audit Committee – Agenda Item 4 Paper A – Partial Audit Assurance – Contract Management
(And the Future of the Learning Disability Provider Service)
I commend our SWAP auditors and this committee for bringing these, frankly, surprising findings for oversight and rectification.
Apart from services that remain in-house, most forms of “commissioning” require the effective letting and management of complex contracts, over long periods of time, when unforeseen changes will inevitably occur.
This committee has repeatedly been assured that the lessons of the controversial contract with IBM for South West One have been learnt, yet here is another example of those lessons not being disseminated effectively around the council on a service by service and contract by contract basis.
The lack of corporate best practice and consistent performance management of high-value contracts for frontline services is a potentially serious failing for a “Commissioning Council”.
I have documented a series of questions below that I hope will add value to the committee discussion and follow-up actions:
Q1. In the “New Operating Model” for this “Commissioning Council” where does the management responsibility lie for enforcing contract management best practice?
A1: This currently sits within service area where contract management is undertaken however as identified in the recent Audit Report Commercial Advisory and Client Management Team have been asked to develop contract management framework and provide additional support and guidance to help strengthen contract management across the Organisation.
Q2. Does SCC hold a central contracts register for all key contracts (especially where the contacts are of high value (e.g. adult social care)), or where there are safeguarding/harm risks (e.g. Learning Disabilities Provider Service)? If there is a central register will it be published on the intranet and will the recognised Trade Unions have access to it?
A2: The Authority records all Contracts in Pro Contract
Q3. Why didn’t the SCC Risk Management processes detect these key contract management anomalies that clearly place SCC at risk of reputational damage, financial loss (including undetected fraudulent claims for work not carried out or sub-standard work) and other potentially harmful outcomes? Should the SCC Risk Register now additionally assess and hold current information for key contacts?
A3: We are not sure what is meant by the statement ‘contract management anomalies’ but can confirm that major contracts will be assessed for risk and placed on the SCC Risk Register accordingly.
Q4. Will this committee ask SWAP to undertake additional contract management audits for key contracts with high value or core to SCC’s reputation or where there are safeguarding/harm risks?
A4: SWAP have always included contract management audits as part of their work programme and SCC are keen for this to continue.
Q5. Will the proposed Learning Disabilities Service Provider contracting out to Dimensions UK be independently reviewed to ensure that all of the contract letting and management issues raised here today have been assessed and openly reported?
A5: Since the new operating model has been place SCC has ensured that a programme structure is put in place where a new service delivery models is required eg set up of SSL, Heritage Trust and in this case the LD SEV. This ensures that implementation and transition plans are developed with the level of resource identified to deliver it and governance and reporting structures are defined as part of the contract arrangements. In addition SCC have brought in external legal support to help review the contract management and performance governance arrangements for this new contract..
Q6. Will SCC introduce a final Gateway Review immediately before all key contracts are let or re-let, to ensure that the resources and skills are in place for effective and safe contract management?
A6: Since the new operating model has been place SCC has ensured that a programme structure is put in place where a new service delivery models is required. This ensures that implementation and transition plans are developed with the level of resource identified to deliver it. SCC agrees that a commissioning gateway is needed and that an important part of its role is to ensure that appropriate levels of resources and skills are in place.
Q7. Had Scrutiny for Policies, Adults and Health been receiving performance reports for Somerset Care then the lack of Key Performance Indicators (KPI) oversight would have come to light. Should each relevant Scrutiny Committee have additional contract management oversight and performance management reporting to complement the proposed corporate oversight? Will the Councillors require additional training for this role?
A7: In line with the principles of the Operating Model the focus on performance needs to be led by outcomes linked to the commissioning intentions, rather than inputs and this will remain a key focus in our reporting. Contracts will be managed by contract holders and any outcome deviation from that which has been commissioned will be appropriately reported.