Minutes - draft

These minutes are draft and are to be agreed.

Minutes of the Resources and Productivity Sub-committee of the Metropolitan Police Authority held on 6 December 2010 at 10 Dean Farrar Street, London SW1H 0NY.

Present

Members

• Faith Boardman (Chair)
• John Biggs
• Valerie Brasse
• Graham Speed (Vice Chair)

MPA officers

• Annabel Adams (Deputy Treasurer)
• Julie Norgrove (Director of Audit, Risk and Assurance)
• John Crompton (Treasury Team)

MPS officers

• Ailsa Beaton (Director of Information)
• Paul Daly (Director of Exchequer Services)
• David Hill (Project Director for Olympic Operational Logistics Infrastructure)
• Caroline Mortimer (Acting Director of Logistical Services)
• Anne McMeel (Director of Resources)
• Merv Potter (Project Manager, Vehicle Recovery and Examination Service)
• Nick Rogers (Director of Finance Services)
• Lee Tribe (Director of Procurement Services)
• John Weston (Procurement Category Manager Olympics Ops and Protection)

Mark Pickering from Arlingclose attended for consideration of agenda item 4

Anna Feagan, Senior General Manager DEFS attended for consideration of agenda item 12

Also in attendance: David Jordan, Home Office attended for consideration of agenda item 11.

46. Apologies for absence

(Agenda item 1)

An apology was submitted on behalf of Amanda Sater

Lee Tribe, the Director of Procurement Services was welcomed to his first meeting of the Sub-Committee.

47. Declarations of interests

(Agenda item 2)

No declarations were made.

48. Minutes of the meeting held on 8 November 2010

(Agenda item 3)

Resolved That the minutes of the Resources and Productivity Sub-Committee held on 8 November 2010 be agreed and signed as a correct record.

49. Treasury Management half year review 2010/11

(Agenda item 4)

This report invited members to review Treasury Management activity for the period 1 April 2010 to 30 September 2010 and approve amendments to the MPA investment counterparty list and prudential code indicators.

Mark Pickering from Arlingclose attended for consideration of this item . He expanded on the areas of activity since the last the report to members as follows:

Increase of Variable Rate Borrowing PI from 15% to 30% - the current positive yield curve means that borrowing may be more attractive at the shorter end. The higher limit allows flexibility in approach and affordability, particularly with the impending budgetary pressure against a significant borrowing requirement. The current 9% exposure to variable rates could easily be achieved within a short period if this year’s remaining £45m forecast borrowing is undertaken. As variable rates on debt increase, so do returns on the investment side, meaning interest rate risk is effectively hedged in this instance.

Expansion of limit with UK counterparties from £30m to £35m per institution – Arlingclose’s general advice is to maintain an investment limit of 15% with each counterparty. Based on average cash balances of £210m, £35m would be in line with this, and would compare to limits across other of the firm’s London Borough clients.

Addition of Clydesdale to lending list – Mark Pickering explained that Clydesdale is a wholly owned subsidiary of National Australia Bank. It also trades as ‘Yorkshire Bank’ in the UK. Clydesdale was accepted into the UK Government’s Credit Guarantee Scheme in October 2008, meaning it is systemically important to the UK Banking System. It has also met Arlingclose’s minimum credit criteria throughout the credit crunch and has a strong parent behind it in National Australia Bank. Australia has fared better than the UK during the global financial crisis. It is a commodity-based economy, with public debt to GDP a quarter of the UK’s levels, and very low net debt. None of the Australian banks required any significant Sovereign support during the financial crisis, and were those banks to need support the Sovereign would be well placed to provide it.

Reduction in use of the Debt Management Office (DMO) for investments – Mark Pickering confirmed that this was in line with the experience in other London Boroughs and Southern County/Unitary Councils, The DMO continues to pay just 0.25% on deposits (maximum 6 months). This compares with around 1.00% on deposits with the Royal Bank of Scotland (RBS), who are significantly government owned, and other similar counterparties. This was a sensible move towards strong counterparties that are yielding better value for money. The DMO should continue to remain the default position for investments in times of economic stress.

Members indicated that they were satisfied that the approach being taken presented an opportunity to obtain a better return. The Chair said that Arlingclose had made reference to local authorities and it might be useful to see how the MPA was performing in relation to these authorities.

It was agreed that future reports contain some information on bench marking against a selection of local authorities which were advised by Arlingclose.

Resolved - That

1. the report be forwarded to the Finance and Resources Committee; and
2. future reports contain relevant benchmarking information.

50. Capital programme monitoring –quarterly monitoring report – quarter 2

(Agenda item 5)

A report was submitted which provided members with a detailed review of the MPS capital programme as at the second quarter (September).

The Sub-committee noted that the second recommendation had been included in error.

In reply to a question from a member the Director of Resources confirmed that adequate procedures were in place for dealing with the expenditure in connection with the Olympic and Paralympic Games and that such funding often came in the form of special grant which had its own set of criteria which had to be satisfied.

The Chair requested that the next report set out details of the approval process for items included in the programme and other changes which have been made in capital monitoring, with more detail provided on the position at year end of projects which are committed but not yet delivered.

Resolved That the monitoring position for the quarter 3 for the capital expenditure programme be noted.

51. Requests for contract action – management information

(Agenda item 6)

This report sets out the summary of requests for contract action received in Procurement Services within the last quarter (July 2010 - September 2010), with a particular focus on the requests that fall under the remit of Single Tender Actions (STA) and submitted via the associated form 1049. The report provides details of compliance with EU Procurement law and the MPA Contract Regulations by providing members with information on the number of requests for STAs against each of the legal exemption types and provides a summary of the number and value of those approved and declined.

The Director of Procurement Services said he wished to amend the figure for the value of the variations and extensions processed in August 2011. The correct value was £5.1m.

Resolved - That

1. the summary of competed tenders received in the second quarter of 2010/11 and the control of single tender exemptions through Procurement Services and the MPA be noted; and
2. it be note that further updates will continue to be provided to the Resources and Productivity Sub-Committee on a quarterly basis.

52. Procurement strategy quarterly monitoring report period 2

(Agenda item 7)

This report provided an update on the Procurement Strategy action plan to the which was approved in June 2009.

The Chair stated that the direction of travel was satisfactory and good progress had been made and suggested that this therefore was an appropriate juncture to look at any refinements which could be made to the action plan over the next 18 months to two years. She looked forward to exploring this further with the Director of Procurement Services and MPA officers.

Resolved - That

1. the update on progress as set out in exempt Appendices 1 and 2 be noted; and;
2. It be noted that that further updates will continue to be provided to the Sub-Committee on a quarterly basis.

53. Exclusion of press and public

(Agenda item 8)

Resolved - That under section 100A(4) of the Local Government Act 1972 the press and public be excluded from the meeting for the following items of business on the grounds that they involved disclosure of exempt information as detailed in paragraph 3 of Schedule 12A to the above Act.

Summary of decisions made on exempt items

54. Exempt appendices to procurement strategy quarterly monitoring report period 2

(Agenda item 9)

Information noted.

55. Exempt appendix to requests for contract action

(Agenda item 10)

Information noted.

56. The supply of overnight accommodation for mutual aid officers and staff during the Olympic and Paralympic Games.

(Agenda item 11)

57. Framework agreement for the provision of forensic analysis of digital and electronic devices

(Agenda item 12)

The recommendation relating to the award of this framework agreement was adopted.

58. Catering services framework agreement for a managed vending service

(Agenda item 13)

The recommendation relating to the award of this framework agreement was adopted.

59. The provision of vehicle recovery and specified storage services initiated by or through the MPA/MPS

(Agenda item 14)

The recommendation relating to the award of this contract was adopted.

60. Exempt minutes of the meeting held on 8 November 2010

(Agenda item 15)

Confirmed and signed.

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