Agenda item

This report provides an update on current procurement, strategic commissioning and community wealth building and social value activity, as well as outlining planned next steps and opportunities in these areas.

Councillor Rubin (Cabinet Member for Climate Action and Community Power)  was invited to introduce a report providing an update on current procurement, strategic commissioning and community wealth building and social value activity, as well as outlining planned next steps and opportunities in these areas. In presenting the report, members were advised that the paper detailed the current and proposed approaches to commissioning, procurement, community wealth building and social value. Councillor Rubin highlighted the fundamental principles of the commissioning approach, emphasising a focus on prevention. The objective was to transition from addressing issues at crisis points to implementing long-term preventative interventions. A comprehensive stream of work was underway, aimed at radical play space leadership, responding to issues where residents reside and addressing local needs. The Committee were informed that the Council had commissioned an external expert to undertake a review of procurement to provide a critical, friendly perspective on the Council's procurement practices. The report was scheduled for receipt on 15 March 2025 and the paper also suggested reporting back to the Committee on the implementation of the Action Plan. The priorities in procurement included an insourcing-first approach, as detailed in paragraph 5.32 of the committee report, to assess the feasibility of insourcing services when contracts and tenders came up for renewal. Additionally, the forthcoming Procurement Act 2023 that would come into effect in 2025 presented several opportunities outlined in the report. The approach to community wealth building, advocating for a shift from the current definition to a more exhaustive and extensive one was also highlighted. This approach aimed to transform economic development by retaining more wealth and opportunities for the benefit of local residents. The five pillars of community wealth building were delineated in paragraph 5.30 within the committee report. Collaboration with the Centre for Local Economic Strategies was planned to review processes and develop an action plan for implementation. The concept of social value was also addressed, which involved looking beyond the financial cost of contracts to consider how commissioned and procured services could enhance the economic, social, and environmental well-being of the local area. Proposals for policy changes included adjustments to the threshold and weighting of social value in contracts. The necessity of robust governance and assurance oversight for effective implementation was also emphasised. The terms of reference for the current commissioning and procurement board were under review to enhance oversight and assurance and included the Lead Member's (Councillor Rubin) involvement, consideration of a Forward Plan for upcoming contracts, a enhanced process for insourcing services, a keen focus on contract management, and the assessment of social value for upcoming contracts, such as the South Kilburn development.

Having thanked Councillor Rubin for introducing the report, the Chair then moved on to invite questions and comments from the Committee in relation to the Commissioning, Procurement, Community Wealth-Building, and Social Value Report, with the following comments and issues discussed:

• Members requested a detailed breakdown of the Council's commissioning expenditure between the Voluntary and Community Sector (VCS) and, within the context of community wealth building, a breakdown between VCS, social enterprises, and private companies based in Brent, ideally those that paid their business rates in Brent, and private companies that were not based in Brent. In response, Councillor Rubin (Cabinet Member for Climate Action and Community Power) acknowledged the information request and informed the Committee that a comprehensive review of procurement data had been undertaken. It was assured that the necessary data could be extracted. Councillor Rubin further mentioned the consideration of local spend definitions and the possibility of including a breakdown in the report. Furthermore, plans to establish a reporting mechanism to the Cabinet, either on a six-monthly or twelve-monthly basis was highlighted, regarding commissioned and procured services.

• Following up, members questioned whether the commissioning process considered the component of local spend during price analysis, specifically considering the potential return of funds if services were awarded to companies based in Brent. In response, Rhodri Rowlands (Director of Strategic Commissioning and Capacity Building) confirmed that the analysis of wealth flows into the local community was an aspect being reviewed by the Centre for Local Economic Studies (CLES). Members were assured that this information could also be included in the information request. It was emphasised that this consideration was reflected in the price analysis during procurement. Willingness was expressed to share examples and include them within the information request. Councillor Rubin concurred and further added that the reporting and analysis of these components would be integrated into future commissioning processes.

• Member inquired about the new commissioning framework, specifically how it would strengthen the long-term stability of Brent-based charities. It was questioned whether contract allocations would prioritise local charities over those based externally and in other Boroughs, and whether this would be embedded into the procurement process to ensure financial stability moving forward, including covering ongoing operational costs and increased financial pressures. In response, Rhodri Rowlands (Director of Strategic Commissioning and Capacity Building) highlighted that the Council was exploring approaches to integrate into the commissioning framework that would enhance resilience across the sector. It was noted that future arrangements for the social infrastructure contract, currently provided by CVS Brent, would be one avenue. It was additionally stated that the Procurement Act 2023, which had recently come into force, provided mechanisms to promote opportunities for small and medium-sized enterprises (SMEs) and the Voluntary and Community Sector (VCS) to bid for and benefit from Council commissioning contracts. The opportunity to further develop these mechanisms was emphasised, which would be a key tenet of the framework.

• Members sought clarification on how the Council would support ongoing costs for charities, given their reliance on these contracts to maintain services. Concern was expressed about ensuring the stability of services for residents amidst increasing costs, such as rents, energy, and staffing, while also protecting the Council's long-term position. The Chair also suggested considering the financial contributions of voluntary sector organisations that subsidised services provided on behalf of the Council through grants, funding, trusts, and donors. The Chair questioned how effectively the Council would take into account the financial income these organisations brought into the borough, which saved money for the Council, the NHS, and other statutory organisations. The Chair proposed using this financial value as part of the contract's financial assessment. In response, Rhodri Rowlands (Director of Strategic Commissioning and Capacity Building) noted the increased flexibility provided by the Procurement Act 2023. It was explained that one of the significant changes was the shift towards reviewing bids and tenders based on the most advantageous tender rather than the most economically advantageous tender. The additional value brought by locally based organisations and their inherent relationships and connections were additionally highlighted. It was further mentioned that proposals to collaborate with the sector and others to attract additional social investment into the Borough, contributing to ongoing sustainability within the sector were underway.

• With reference to previous committee discussions about the percentage of Brent Council staff who were Brent residents, which was approximately 44%, the Chair inquired about the extent to which the Council considered organisations that paid business rates in Brent and employed staff who paid council tax in Brent as part of the social value framework. In response, Councillor Rubin (Cabinet Member for Climate Action and Community Power) affirmed the importance of examining the entire supply chain, including who commissioned organisations employed and where their money was subsequently spent. It was indicated that the CLES review would focus on wealth flows from the Council and the supply chain of commissioned organisations.

• Members inquired whether the changes introduced by the new Procurement Act would facilitate or hinder the ambitions outlined in the committee report, compared to the status quo. In response, Councillor Rubin (Cabinet Member for Climate Action and Community Power) conveyed that, in his view, the changes would facilitate their ambitions, as there was a greater emphasis on local expenditure. Rachel Crossley (Corporate Director Community Health and Wellbeing) concurred and further added that, from a corporate perspective, the requirement to publish an annual plan detailing upcoming procurements and the structure provided by the new Act would reinforce consistency in their approach. It was believed that the balance between structure and freedom was appropriate for their needs.

• Members expressed curiosity around the reliance on the local voluntary community centre in Brent, which was employed to assist in achieving key objectives in commissioning, community wealth building, and social value. Details were sought on the sector's capacity to meet these demands and how the Council was supporting the Voluntary and Community Sector (VCS) in addressing past delivery issue, given the challenges that had previously been faced. In response, Councillor Rubin (Cabinet Member for Climate Action and Community Power) informed the Committee that he had recently met with the new CEO of CVS Brent, who faced a significant task in turning the organisation around. Confidence was expressed in the CEO's capabilities and ideas. Intentions to set clear aims and convene a meeting of officers to discuss and clarify objectives were outlined. Councillor Rubin planned to meet with the CEO on a monthly basis to ensure that CVS Brent could be revitalised, and that capacity could be built within the voluntary sector in Brent. Rowlands (Director of Strategic Commissioning and Capacity Building) echoed Councillor Rubin's points and further highlighted that many of the proposals in their emergent thinking were informed by the VCS's engagement with the Council. The importance of building resilience and capacity within the sector by understanding the needs of different organisations was emphasised. It was further mentioned that feedback received had indicated that social value commitments from supply chains did not always reach genuine community organisations and needs and thus, better brokering connections between suppliers and smaller community organisations to maximise impact had been proposed.

• The Chair cited a previous recommendation from the budget task group meeting regarding shared framework agreements with the voluntary sector to foster true partnership in delivering commissioning and procurement arrangements. The Chair noted that the voluntary sector in Brent had long requested such partnerships, which had been underutilised. Satisfaction was expressed that this was now a priority, as the recommendation had previously underperformed.

• Members welcomed the Commissioning, Procurement, Community Wealth-Building, and Social Value Report, Local Government Association (LGA), and the peer review. While it was acknowledged that the full peer review report was not due to be published until March 2025, members requested any early insights from the peer review regarding the work already undertaken, areas of strength and of weakness. In response, Councillor Rubin (Cabinet Member for Climate Action and Community Power) highlighted that in terms of areas of strength, the review found that the Council was particularly strong in data management, having the necessary data readily available. However, the need for more forward planning and a governance arrangement was noted to ensure that contracts were not addressed only a few months before their expiration. Rachel Crossley (Corporate Director Community Health and Wellbeing) additionally noted that, while the Council possessed the necessary tools and techniques, there was inconsistency in their application across services and procurement. Feedback had indicated a lack of clarity regarding responsibilities and accountability, with some perceiving procurement as solely a procurement role rather than a service-driven approach to achieve better value. The need for cultural change, consistency, and forward planning were also highlighted in the corporate peer challenge.

• Member inquired whether the new procurement strategy would encompass roles and responsibilities, governance, and cultural setting, to which Rachel Crossley (Corporate Director Community Health and Wellbeing) confirmed that the officer structures were being reviewed in line with the structural changes to governance outlined by Councillor Rubin. Ongoing work to adopt a community of practice approach across services, focusing on upskilling officers and clarifying roles and responsibilities was further highlighted.

• Members questioned whether the new Procurement Act 2023, while strategically beneficial, would require additional resources from the Council for flexible procedures and market engagement. In response, Rhodri Rowlands (Director of Strategic Commissioning and Capacity Building) reassured members that the Council was prepared for the forthcoming Procurement Act, with preparations having been underway for some time. An officer implementation group had been driving the process forward. On 24 February 2025, the Council's senior management group was briefed on the implications and opportunities of the Act. The importance of consistent planning, the annual procurement plan, and the activity pipeline was emphasised. The opportunities presented by the social value aspects of the Act, particularly in tailoring contractual opportunities to maximise value were also highlighted. Confidence was expressed that the Council was on track to achieve the best value through consistent planning and trained officers.

• Reference was made to paragraphs 5.32 and 5.33 of the committee report, with members seeking details on how the Council determined whether a service should be outsourced or brought in-house, the criteria used to evaluate the cost-effectiveness and social impact of each approach, and how the review would enable greater consideration of insourcing. In response, Councillor Rubin (Cabinet Member for Climate Action and Community Power) stated that the current approach reassured that insourcing was considered when contracts were procured. The importance of having the pipeline of contracts presented to the Cabinet, as done by other local authorities, to ensure public scrutiny and oversight was emphasised. It was assured that insourcing was a priority and that the Commissioning and Procurement Board would assess and discuss the best way to commission services, whether through insourcing, outsourcing, or a combination approach.

• Members highlighted the challenge of considering insourcing as a vital selection ahead of procurement, noting the need for substantial lead time to plan effectively and questioned whether that motivated treating insourcing as a standalone approach to be considered on an annual basis or years before contracts were due for procurement, rather than adhering to the normal schedule. In response, Councillor Rubin (Cabinet Member for Climate Action and Community Power) affirmed that greater time for planning would enable better decision-making regarding the best approach for residents and cost-effectiveness for the Council. The importance of having a governance arrangement that allowed for long-term horizon scanning was also emphasised. The Chair recommended making it clear that insourcing was an option actively pursued by the Council. It was believed that this would strengthen the Council's negotiating position with suppliers, as the possibility of bringing services in-house would prompt suppliers to offer more competitive terms. The Chair also stressed the importance of transparency for residents to understand the decision-making process.

• Details were sought around whether the Council was exploring partnerships with other local authorities to enhance procurement efficiency, reduce costs, and strengthen social value outcomes by leveraging collective buying power, sharing best practices, and supporting local suppliers across multiple Boroughs. In response, Councillor Rubin (Cabinet Member for Climate Action and Community Power) acknowledged that the Council had already collaborated with other Councils in certain areas, such as the West London Waste Authority, which addressed significant aspects of waste and recycling. It was affirmed that while such partnerships were beneficial, they also carried risks, particularly when administrations changed and the adoption of different approaches. It was agreed that exploring these partnerships was worthwhile but needed to be approached with caution, considering the risks.

• Members raised questions around the relaxation of due diligence requirements for local SMEs. In response, Rhodri Rowlands (Director of Strategic Commissioning and Capacity Building) explained that the Procurement Act provided mechanisms to support local SMEs by reducing burdens and promoting opportunities. Ongoing initiatives were highlighted, such as the upcoming business forum in March 2025, which aimed to upskill and support smaller SMEs to better position them to bid for and win Council contracts. The importance of fairness and transparency in the approach was emphasised and various platforms and tools, such as the e-tendering portal and Match My Project were cited, which facilitated supplier engagement and project matching. Members were assured that efforts were being made to encourage local suppliers to register their interest and participate in Council procurement opportunities.

• Member noted a lack of clarity in the Commissioning, Procurement, Community Wealth-Building, and Social Value report regarding the concepts of social value and community wealth building and sought clarification on how these concepts, along with procurement, were integrated to deliver value in the community. In response, Councillor Rubin (Cabinet Member for Climate Action and Community Power) appreciated the report feedback and agreed to clarify how these concepts interrelated. It was explained that community wealth building was the overarching strategy, with procurement and social value being integral parts within the strategy. The aim was to enhance the local economy by ensuring that spending contributed to community wealth.

• The Chair reiterated the importance of understanding that community wealth building extended beyond the charity sector's investment through social value, and emphasised that every contract commissioned or procured by the Council should contribute to bringing wealth into the Borough, benefiting local businesses and residents. The Chair stressed the need for clear communication of this commitment.

• Members were keen to seek details on how the community wealth building approach would support residents in reducing their cost of living by increasing access to fair and ethical financial services. Members additionally highlighted the role of credit unions in financial resilience and questioned whether the Council could do more to promote and support their use among residents and Brent’s own employees. In response, Councillor Rubin (Cabinet Member for Climate Action and Community Power) affirmed that this was an area that could be further explored. It was suggested that the Council could work with the Centre for Local Economic Studies during the Community Wealth Building Review to examine the role of credit unions and their integration into the strategy. Following up, members asked whether the check-off facility could be promoted more among staff, noting that there was a credit union eager for its promotion, but the Council had not actively promoted it, to which Councillor Rubin committed to investigating this matter further.

• Questions were raised around whether the Council had conducted an analysis of the social value commitments made by suppliers and followed up on their impact and implementation. In response, Councillor Rubin (Cabinet Member for Climate Action and Community Power) indicated that the procurement team would be best placed to answer this query comprehensively but acknowledged that while some assessments had been undertaken, the new governance arrangements aimed to enhance contract management and accountability for social value commitments. In continuing the response, Rhodri Rowlands (Director of Strategic Commissioning and Capacity Building) added that monitoring and tracking the delivery of social value commitments was currently inconsistent. It was mentioned that mechanisms were in place, such as data dashboards, which showed over £3.4 million in equivalent financial value of contracted social commitments for the current financial year. The need for further meaningful visibility of the impact and delivery of the commitments, and the priority of greater monitoring was additionally emphasised.

• Members requested further information on the Council's current policy regarding social value. In response, Rhodri Rowlands (Director of Strategic Commissioning and Capacity Building comprehensively explained that the Council’s social value policy set out the overarching framework and linked to the corporate plan and priorities. The performance measures and key performance indicators (KPIs) used to support employment, skills development, community events, volunteering, and other contributions were also described. It was further noted that while tools and levers were in place to maximise opportunities around social value, there was a need for more consistent use and a refresh to ensure alignment with community needs and priorities.

• Members additionally questioned whether the input from the peer review would sufficiently focus on social value to identify gaps, weaknesses, and areas for improvement. In response, Rhodri Rowlands (Director of Strategic Commissioning and Capacity Building) expressed confidence that the combination of feedback from the sector social value network and the peer review would help the Council advance its social value strategy. The importance of consistency in driving improvements was highlighted and existing examples of successful social value delivery were noted. In acknowledgement of the response provided, members emphasised the importance of using social value strategically to maximise benefits from suppliers and also reiterated the significance of integrating spend thresholds and categories of spend into the new social value strategy to tailor requirements for different suppliers.

• The Chair acknowledged the difficulty in monitoring and evaluating the impact of social value offers within the current arrangements and suggested that moving towards more tangible social value contributions, such as direct investment in services or organisations providing services on behalf of the Council could be beneficial. The Chair was keen to seek details around whether teams had the capacity to establish specific targets in future social value negotiations. In response, Councillor Rubin (Cabinet Member for Climate Action and Community Power) agreed that social value should not be a form of corporate PR and acknowledged the complexity of requesting cash contributions, as it could affect the price paid for services. Reference was made to the Community Chest initiative, which allocated approximately £100,000 for voluntary sector support, as a successful example of cash-based social value input. A preference was expressed for a single Brent community fund and the importance of jobs and apprenticeships for local residents was emphasised. The Chair stressed the need for effective follow-through on apprenticeship provisions and suggested partnering with local employment organisations, such as Brent Works, to prioritise offering apprenticeships to local residents. In addressing the Chair’s remarks, Councillor Rubin confirmed plans to address contract management of social value and cited examples of successful practices, such as the collaboration with Wates to advertise apprenticeships through Brent Works. There was a commitment to monitoring these initiatives at a high level and incorporating them into the Commissioning Board's priorities.

• Members raised questions regarding the Council's support for fair trade and its integration into the new social value contract, noting the lack of fair-trade considerations in existing catering contracts. In response, Councillor Rubin (Cabinet Member for Climate Action and Community Power) expressed openness to incorporating fair trade into both social value and procurement strategies and invited further discussion regarding its integration, specifically with regards to social value.

• Concerns were highlighted regarding the underutilisation of several newly built community centres, with members questioning the possibility of exploring the inclusion of a Key Performance Indicator (KPI) in contracts to specify the number of hours these centres should be available for public use, to prevent them from remaining empty and unbeneficial. In response, Councillor Rubin (Cabinet Member for Climate Action and Community Power) acknowledged the importance of asset utilisation as one of the five pillars of community wealth building and agreed that this was an area that needed to be addressed to drive wealth and uplift the local economy. Rachel Crossley (Corporate Director Community Health and Wellbeing) further noted that though the issue pertained more closely to property and assets management, there was a commitment to review whether it was a contracting issue or a matter of working with stakeholders to better utilise the spaces. The connectedness to social value in understanding the usage of these buildings was emphasised.

• Members inquired about the financial savings and social value generated by the market rent policy for affordable rents for charities in the Borough, and questioned the factors considered when setting market rent reductions, such as whether a staggered system based on proven social value would be implemented, as opposed to a one-size-fits-all approach. Rhodri Rowlands (Director of Strategic Commissioning and Capacity Building) informed the Committee that a set of criteria was being piloted to determine market rent reductions and proposed to take this inquiry as an information request and provide further details in an information note. Councillor Mili Patel (Deputy Leader and Cabinet Member for Finance & Resources) agreed to share the scoring system used to evaluate the value of social contributions.

In seeking to bring consideration of the item to a close, the Chair thanked officers and members for their contributions towards scrutiny of the Commissioning, Procurement, Community Wealth-Building, and Social Value Report. As a result of the outcome of the discussion, the suggestions for improvement and requests for additional information identified were AGREED as follows:

SUGGESTIONS FOR IMPROVEMENT

(1)  Engage residents in understanding community wealth building and social value, highlighting their key roles in council activities, particularly in procurement and commissioning.

(2)  Revise the official council report template to include dedicated sections for Community Wealth Building and Social Value Considerations, ensuring these factors are assessed and reported in all council reports where relevant.

(3)  Explore how credit unions and the promotion of their services can be embedded within Community Wealth Building initiatives to strengthen financial inclusion, enhance local economic resilience, and provide greater support for residents.

(4)  Develop a robust, systematic approach to reviewing service contracts that enables transparent, evidence-based decisions on preferred forms of delivery (e.g., in-house, outsourced, or hybrid), guided by defined criteria, detailed cost-benefit analysis, and internal capability assessments.

(5)  Promote and support the long-term sustainability of voluntary and charity sector (VCS) organisations in the council’s revised commissioning and procurement frameworks, where legally permissible. This should include a focus on removing and/or reducing barriers to VCS organisations participating in council tender activities.

(6)  Subject to risk analysis, explore additional joint procurement opportunities with neighbouring boroughs to leverage collective buying power, share best practices, and support local suppliers across multiple boroughs.

(7)  Continue to adopt and embed across all procurement and social value activity sustainability commitments, including fair trade and efforts to combat climate change.

(8)  Explore including clauses in all future procurement tenders requiring suppliers to demonstrate proactive steps to ensure transparency, compliance, and accountability in operations. This should include a commitment to respecting and upholding workers' rights to join trade unions, where applicable.

(9)  Where legally permissible, acknowledge and incorporate external financial contributions secured by VCS organisations that are linked to the tender into procurement evaluations, ensuring these funds are recognised as part of social value and community wealth building.

(10)                 Explore integrating factors such as organisations whose staff pay council tax and those paying business rates within the borough into the social value and community wealth building criteria for procurement evaluations, where legally permissible.

(11)                 Where practicable, ensure procurement contracts include tailored social value commitments, encouraging bidders to shift from ‘in-kind agreements’ to direct investments in existing or planned council-led initiatives that deliver tangible benefits to local communities.

(12)                 Strengthen collaboration between suppliers and Brent Works and Employment Services Team to actively facilitate the targeted recruitment of local and underrepresented residents into job opportunities created through procurement.

(13)                 Develop a publicly accessible contract performance dashboard to track and report on key metrics, including social value commitments, ensuring transparency and clear accountability for contract outcomes.

INFORMATION REQUESTS

(1)  Provide a detailed breakdown of commissioned services income received over the last three years, categorised by organisation type.

(2)  Provide a detailed breakdown of funding allocated to externally commissioned services, distinguishing between organisation types—private companies (small and medium-sized enterprises (SMEs) and large enterprises/corporations), VCS organisations, and social enterprises—while also indicating whether each organisation is local or non-local.

(3)  Provide details, including examples, of how the council supports local SMEs in its procurement process.

(4)  Provide a copy of the Market Rent Reduction Framework, including the scoring criteria used to assess applications from VCS organisations seeking to rent council premises at reduced rates.