Review of Standing Orders

Report: 9
Date: 24 July 2008
By: Report by the Treasurer

Summary

The Authority’s Standing Orders have been in place since the MPA came into existence in 2000. Standing Orders were last reviewed in 2007, and it was agreed that in future this would take place on an annual basis.

The review has now been undertaken and amended Financial and Contract Regulations and scheme of delegation are attached for consideration and approval. The other sections of standing orders remain unchanged.

Finance Committee, at its meeting on 17 July 2008, considered the amendments to Standing Orders and any additional comments made by that Committee will be raised by the Treasurer at this meeting.

A copy of the revised Contract and Financial Regulations and the Scheme of Delegation (Appendices 1, 2, and 3) are circulated with this agenda as a separate document.

A. Recommendation

That

1. the Authority consider and approve the proposed amendments to Standing Orders, following consideration of them by the Finance Committee on 17 July 20008; and

2. note the wider piece of work currently being undertaken on governance of contracts, under the supervision of the Procurement Oversight Group.

B. Supporting information

Introduction

1. The Authority’s standing orders regulate the conduct of it’s business to ensure fair and accountable decision making, they also provide for the delegation of Authority functions and decision making to committees, panels and officers. The current standing orders were agreed when the Authority came into existence in July 2000. They have since been reviewed a number of times to provide clarification and to update following changes in legislation, the most recent review being 2007.

2. The 2007 review made minor changes to Financial Regulations and the Scheme of Delegation, and amended the Anti fraud Policy to include a new section on “Good Practice” in response to the Standards in Public Life Agenda.

3. Contract Regulations underwent a more fundamental review in 2007 to ensure they reflected good practice, legislative changes. They were also made more accessible and user friendly. CIPFA’s guidance on contract procedural rules formed the basis of the revised Contract Regulations as these were considered to represent good practice ensuring efficient and effective procurement, which promoted good purchasing practice, public accountability and ensured compliance with the Public Contract Regulations.

4. As agreed at last year’s Full Authority an annual review has been undertaken of standing orders. The procurement sub-group established a joint working group, with representatives from the MPA and MPS, which has reviewed the Financial and Contract Regulations. In addition the scheme of delegation (Appendix 1) has been updated to reflect (where necessary) changes made to the regulations. The other parts of standing orders remain unchanged. The results of the review are summarised below and incorporated in the appended regulations.

Financial Regulations – Appendix 2

5. The changes proposed to Financial Regulations are minor, with amendments being made to reflect different job titles, add clarity and address new requirements. The main changes are summarised below.

1. Pilot projects – Additional paragraphs have been added to the Financial Regulations to reflect the policy that has been in place regarding “pilots” and the need for prior approval from the Authority for all pilot projects to proceed regardless of their financial value. The controls on pilots will be subject to further guidance to identify "de minimis" levels which do not need approval.
2. Provision of services to other organisations - This section has been amended to make it clear that the need for Authority approval applies to proposals to bid, tender or quote for the provision of services to other organisations only and not to the provision of special policing services under the Police Act 1996 or to the provision of mutual aid by the Commissioner to another force under s24 Police Act 1996.
3. Post acquisition review – to reflect good practice a new section has been introduced, making it a requirement that a post acquisition review be undertaken for all properties with a purchase price of £3M or more.
4. Partnerships – This section has been strengthened to reflect the growing importance and use of partnerships and now details the types of partnerships that can be entered into and the governance arrangements required.

Contract Regulations- Appendix 3

6. The Contract Regulations have been revised to take on board lessons learnt and to add clarity in certain areas. In addition some changes have been made to delegated levels. The main changes proposed to the Contract Regulations are summarised below.

1. Level of delegation to business units - Since the Contract Regulations were originally drafted the level of delegation to business units has remained at £40,000. Inflationary increases over the years has meant that an increasing number of contracts are coming above the delegated limit. It is therefore proposed that the limit be increased to £50,000. However it is not proposed to increase the delegated powers of the Service above the current £5M ‘total value’ level as this is felt to be sufficiently high.
2. Exemptions to Contract Regulations – in response to concerns raised from the Service it is proposed that the approval level for exemptions be increased from £40K to £100K. The increased level will be supported by additional controls that the MPS are putting in place and performance indicators. These additional controls are in the process of being agreed (and will be signed off by the procurement sub-group) but it is anticipated that Procurement Services will play a greater role in the approval of exemptions below £100k. In addition, a quarterly report will be provided to Finance Committee via the sub-group detailing all such exemptions that have been approved. Exemptions above £100k will continue to require the prior approval of the Chief Executive before any decision can be made.
3. Providing Services to external purchasers – as with financial regulations this section has been amended to make it clear that the need for Authority approval applies to proposals to bid, tender or quote for the provision of services to other organisations only and not to the provision of special policing services under the Police Act 1996 or to the provision of mutual aid by the Commissioner to another force under s24 Police Act 1996.
4. Negotiated and Competitive Dialogue Process – In recognition of the potential complexities of the process, the Authority’s prior approval will now be needed if the MPS intend to use either the negotiated procedure or the competitive dialogue process.
5. The financial value of contracts above which the Chief Executive is required to sign and seal contracts has been increased so they fall in line with approval levels within the service.
6. Contract extensions and variations - these sections have been redrafted to add clarity and to ensure there is sufficient transparency for variations made to large value contracts and that appropriate committee approval is received.

Contract Regulations - Next steps

7. Contract Regulations have an important role to play in delivering efficient and effective procurement. However the procurement sub-group has concluded that they are only one part of the governance framework for procurement. Both the Authority and Service need to have additional arrangements in place to ensure the right level of governance is in place, and that the understanding and compliance with the formal systems and requirements is satisfactory.

8. This is in accordance with the broader work programme for improving corporate governance within the Service which has been developed and is currently being implemented, with progress being reported to Corporate Governance Committee on a quarterly basis. This includes a number of workstrands that should lead to improvements in contract compliance and management.

9. The procurement sub-group has identified a number of workstrands that should improve these existing governance arrangements . These are as follows:-

1. Review of the procurement strategy – In July 2007 the Authority approved the procurement strategy for the three year period 2007-2010. The strategy identified strategic goals in four key areas - performance, people, policy and processes - and progress towards these is now being monitored monthly by the sub-group. The review of the Contract Regulations has highlighted the need for the Authority to add clarity around the complexity of current procurement models, in order to set out the environment in which the Service has to procure and the range of permitted options available for potential use. The sub-group has concluded that the procurement strategy is the most appropriate vehicle for this, and therefore this will be redrafted to incorporate the Authority’s broader vision and approach to procurement. The intention is for the procurement strategy to be intrinsically linked to the Contract Regulations.
2. Performance Indicators – The sub-group has identified a need for a balanced suite of indicators, and a reporting mechanism to be developed that will both provide assurance on the level of compliance with the regulations and also provide transparency in relation to performance in key areas of procurement activity and improvement.

10. In addition the Service will develop a strategy for raising awareness and delivering training on Contract Regulations that will complement the programme of training and communications currently already underway as part of the Developing Resource Management programme. The view of the sub-group is that this is a vital strand to be added to the work programme in order to improve the understanding and compliance with the systems and regulations that have now been developed.

11. The intention is to develop these workstrands in the next few months reporting back to Finance Committee in November.

C. Race and equality impact

1. The GLA Responsible Procurement Policy and the Authority’s Equalities and Diversity Statement support Contract Regulations. These documents aim to reduce inequalities and promote diversity in the purchasing of goods and services.

2. The Contract Regulations and Financial Regulations have all been equality impact assessed in the past. The impact assessments are presently being reviewed in light of proposed amendments made to the regulations.

D. Financial implications

The revised regulations will ensure that we are compliant with UK and EU legislation and that the Authority meets its statutory responsibilities in relation to the proper administration of its financial affairs.

E. Background papers

None

F. Contact details

Report author(s): Annabel Adams, MPA

For more information contact:

MPA general: 020 7202 0202
Media enquiries: 020 7202 0217/18

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