Agenda item

(To receive a report which recommends Terms of Reference for a review of the contract awarded to Serco.  The Council resolved at its meeting in May to ask KPMG to undertake the review in accordance with terms of reference approved by the Audit Committee)

Consideration was given to a report which recommended Terms of Reference for a review of the contract awarded to Serco.  A review had been anticipated for a while but the Council resolved at its meeting in May to ask KPMG to undertake the review in accordance with terms of reference approved by the Audit Committee.

Members were provided with the opportunity to ask questions to the officers present in relation to the information contained within the report and some of the points raised during discussion included the following:

·         The review would focus on the management of the contract.

·         It was queried whether the report would come back to the Audit Committee before it went to the meeting of the County Council on 16 September 2016.  Members were advised that they would need to agree whether they would like to hold an additional meeting before the meeting on 16 September 2016.

·         It was queried whether the review would examine the handover process and how it was managed, as there had been a suggestion that Serco had found themselves without the staff who had the expertise which was required.

·         It was queried what the mile posts were along the handover process, and were there indications from the beginning that the deadlines would not be met.

·         Members were advised that they did not want to restrict KPMG in terms of time, as it was not known what time was needed in order to complete the work.

·         It was commented that there were issues which had been flagged up to the Committee and it had discussed them previously.  It had been acknowledged that there were issues and that they were being addressed.

·         It had always been maintained that the issues would be looked at, but that there was a need for those issues to be resolved first.

·         It was confirmed that it was anticipated that the handover would need to be examined and that this was covered by paragraphs 3(ii) and 3(iii).

·         It was suggested that one of the issues could have been that the contract was moved from one external contractor to another external contractor.  Members were advised that this could be covered by paragraph 2(i).

·         It was queried when it was identified that there was a shortage of skilled people for the tasks ahead.

·         The arrangements around TUPE would also be looked at, as in the future the authority would like to be able to protect itself a bit more, as these arrangements protected the employee more than the client.

·         It was suggested there should be three areas of focus:

Ø  The contract design tender process and award

Ø  Transitional planning and implementation

Ø  Ongoing management of the contract

·         It was proposed that the authority learned from this experience, in the event that a similar process had to take place again.

·         Members were advised that officers were in the process of producing a list of people and organisations that KPMG should speak to during this review.  However, it was noted that this list would not be exhaustive.

·         It was confirmed that work would commence after this meeting, and it was commented that it was felt that it was the right decision to wait until this Committee had taken place.  It was expected that a costed and timed proposal for this work would be received shortly.

·         It was noted that in terms of non-audit work, there were constraints with the public sector contract, there would be a need for KPMG to write to public sector appointments to get authorisation for this work.  However, the external auditors had already spoken to them about this work and the response had been positive. 

·         In order to ensure no conflict of interest, the review would be carried out by a different auditor, and there was confidence that he would be able to deliver the review and attend a meeting of the Audit Committee in late august or early September.  One issue with the time scale would be the timing of the school holidays.  However, members were advised that the team would be very keen to engage with schools very early in the process.

·         The Committee agreed that a further meeting should be held before the meeting of Full Council, and it was confirmed that this would be a single item agenda.

RESOLVED

1.    That the Terms of Reference for KPMG's review of the Serco contract as indicated at Appendix A of the report, be approved.

2.    That a special meeting of the Committee be held to oversee the Review before the meeting of the County Council on 16 September 2016.