Issue - meetings

RECOMMENDED that the Financial Regulations as shown in Appendix A with the minor amendments reported and approved by the Committee be referred to Council for adoption with an operational ‘go live’ date of 1 April 2025.

In agreeing the above recommendation, the Committee noted that it may be necessary, at the discretion of the Procurement and Contract Management Team (PCM), to operationally implement some of the changes from 24 February 2025, which was the date new legislative requirements ‘go live’.

The Chair of the Audit and Governance Committee, Councillor Marcus Andrews presented the report on the Financial Regulations – Annual evolution for the financial year 2025/26 and outlined the recommendations as set out on the agenda.

RESOLVED that the Financial Regulations as shown in Appendix A with the minor amendments reported and approved by the Committee be adopted with an operational ‘go live’ date of 1 April 2025.

In agreeing the above recommendation, Council noted that it may be necessary, at the discretion of the Procurement and Contract Management Team (PCM), to operationally implement some of the changes from 24 February 2025, which was the date new legislative requirements ‘go live’.

Voting: Agreed with no dissent

Evolutionary changes to the Council’s Financial Regulations are summarised in this report and shown in red text throughout the Financial Regulations document which is shown at Appendix A.

No material changes have been made to sections A to F and H of Financial Regulations. Some minor changes have been made in a small number of places to clarify existing arrangements and to make expectations explicitly clear.

Three changes have been made to Appendix 1, the Corporate Schedule of Financial Delegations at:

·    EX13 Special severance payments, additional wording added to explicitly state each approver must ensure they follow statutory guidance in reaching a decision.

·    New EX14 Approving any expenditure on external legal services – must be approved by the Monitoring Officer (or delegate).

·    EA4 Accepting external funding, amended to ensure thresholds align to other parts of the Financial Regulations most notably CV1 capital virements.

It has been necessary to materially and substantially update Part G, Procurement and Contract Procedures of the Financial Regulations for 25/26, to reflect changes resulting from procurement regulations reform. The Council has very limited discretion or choice on the changes necessary. Changes include:

·     3h – clarification of the term ‘turnover’ in contracts for concessions.

·     5 - Procurement Decision Records (PDR’s), cornerstone of good governance to explain decisions made during the procurement process.

·     6 – Pipeline, Procurement and Contract Management Team (PCM) to publish the Council’s pipeline in the public domain.

·     9 – Preliminary Market Engagement, conflict of interest declarations must be made.

·     18 – Specifications, contracts over £5M must have at least 3 pre-defined key performance indicators.

·     22e – Competition requirements, between £30,000 and relevant threshold, local Financial Regulations should specify clearly the Council’s ‘normal expected’ arrangements across the various categories of expenditure type, notwithstanding such arrangements may be varied by the PCM for good reason. This is instead of just a regulation that stated that the PCM will determine the most appropriate route to market.

·     22e and 22f – Competition requirements & public notices, PCM to publish opportunities in Find a Tender service via the Council’s procurement system.

·     26 - Award notification, link to PDR and communication with successful and unsuccessful bidders.

·     27 - Contract register public domain information, stricter format, PCM to ensure compliance.

·     32 - Contract & Supplier Relationship Management, enhanced performance management expectations including compliance with key performance indicators and performance notices.

·     34 - Contract Termination, contract termination (ending) notices need to be made on Find a Tender service.

The PCM will determine, in the period between 24 February 2025 and 1 April 2025, whether legislation supersedes the current version of Financial Regulations, and any new wording, expectations and activity needs to apply.

The Head of Audit and Management Assurance presented a report, a copy of which had been circulated to each Member and a copy of which appears as Appendix 'C' to these Minutes in the Minute Book.

Members were reminded of Committee’s agreed approach to keeping certain policies up to date by way of a ‘business as usual’ annual evolution. The evolutionary changes shown in red text were retained in the live document for clarity. Staff were made aware of changes and copies were updated on the internet/intranet. The Committee received annual reports on the implementation of these policies.

The Committee was advised that no material changes had been made to sections A to F and H of the Financial Regulations. Some minor changes were made in a small number of places to clarify existing arrangements and to make expectations explicitly clear. It had been necessary to materially and substantially update Part G, Procurement and Contract Procedures of the Financial Regulations for 2025/26, to reflect changes resulting from procurement regulations reform. The significant changes were summarised in paragraph 13 of the report. It was noted that the Council had very limited discretion or choice on the changes necessary, although section 22e on competition requirements did include some local choice.  As a result of feedback prior to the committee, the following amendments to wording were reported:

• Part G3 – Standards – 3f: Insert wording to read ‘Ensure that contract opportunities are as accessible as possible to all entity types and including Small Medium Enterprise (SME)/Voluntary Community and Social Enterprise (VCSE) suppliers’
• Acronyms – VAT – Insert wording to read ‘Value Added Tax at prevailing rate relevant to BCP Council’

It was noted that the new regulations placed responsibility on councils to connect with local SMEs. The Head of Audit and Management Assurance was asked what the Council was doing to ensure SMEs understood the procurement process, one suggestion being to send out a guidance video with the award notification. He explained that the Interim Head of Procurement was considering this suggestion with a view to sending a video to all new suppliers. It was noted that the Council’s financial regulations were ahead of the legislation in already including the definition of a local supplier. Members asked about communicating with their local communities. Sam Acton offered to provide a link to a recent webinar on procurement and payment processes for small businesses which Members could circulate as required.

A question was also raised about whether the section on decommissioning contracts (Part G, Section 34) should include something about communication and managing expectations of service beneficiaries, particular where this involved smaller suppliers or the voluntary sector and vulnerable groups. As there were many different types of contracts involved, the Committee was advised that this may require further consideration as to whether it could be included in this section. Members were assured that where a contract exceeded the £30,000 threshold the procurement contract management team would ensure that relevant managers were aware of these issues.  ...  view the full minutes text for item 78