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Agenda Item No

 

The Vale of Glamorgan Council

 

Cabinet Meeting : 13th December 2011

 

Report of the Cabinet Member for Education and Lifelong Learning

 

Food Contracts

 

Purpose of the Report

1.             To gain approval for the continued use of The Wiltshire Consortium for the purchase and management of food products.

Recommendations

1.             Cabinet approve continued use of the Consortium for one year commencing April 2012 pending on-going investigation of collaborative purchasing with the Welsh Purchasing Consortium and other Local Authorities.

Reasons for the Recommendations

1.             To ensure best value procurement of goods and services is secured and legislative requirements met.

Background

2.             The Council currently uses the Wiltshire Consortium to manage the purchase of its food products. This service was previously undertaken by a neighbouring authority but was inadequate and failed to meet the Council’s catering needs. The Council is continuing to investigate collaborative purchasing opportunities however the catering service in neighbouring authorities is in some instances not as advanced as the Vale's Catering Service in meeting Welsh Government standards.

3.             The Wiltshire Consortium manages the entire purchasing process relating to food.  It investigates the market, assists the council in determining specifications, issues tenders, evaluates offers received and puts contracts in place.  It also monitors and audits the Council’s food contracts in accordance with legislative and Council requirements. 

4.             The Wiltshire Consortium currently manages six major contracts:  bread, milk, fresh fruit and vegetables, fresh meat and poultry, frozen produce and groceries and provisions. As an integral part of that management, it undertakes supplier third party audits, as required by the Pennington Report following an E Coli outbreak in Wales in September 2005 which resulted in the death of a child. 

5.             These audits are annual for non-high risk suppliers, six monthly for high risk suppliers and more frequent in response to any identified problem from a previous audit or at the Council’s request.   Audits of high risk suppliers are unannounced to obtain, where possible, an accurate snap shot of the supplier’s environment, practices and procedures to ensure compliance with legislative and Council requirements. These audits are at no cost to the Council.

6.             The Wiltshire Consortium also manages general queries and ensures the Council is aware of market changes and trends.  It gives warning of any identified food issues such as likely shortages and price rises due to market changes relating to environmental and other factors.  This greatly assists the Catering Service as it gives time to seek alternative food items, make menu changes and be proactive with budgetary control. 

7.             These six contracts terminate at various times, but the bread contract has already been extended one year to March 2012 to enable investigation of collaborative tendering by the Welsh Purchasing Consortium (WPC), which is currently delayed and may not commence until April 2012. 

8.             The WPC is currently considering various collaborative opportunities with which representatives of the Council are involved in an advisory position to ensure our requirements are met and that we will not be at a detriment. Current  contracts are due to expire in 2012 and 2013 however all these contracts have an option to extend if required to enable collaboration with WPC contracts when available if this is considered the best option for the Council.  The Catering Department is looking at various options of procuring food commodities and the transport, environmental issues relating to this.  Consideration is being given to food miles, amount of deliveries, involving local SME’s and multi drop deliveries (frozen/dry commodities delivered in one vehicle).  The consideration for future tenders will be to investigate these options.

9.             The Wiltshire Consortium does not levy any charge to the Council for these services.  It covers its own business costs by levying a percentage fee on the successful suppliers.  This percentage is agreed with the council prior to contacting the market and is clearly identified in Invitation to Tender documents.

Relevant Issues and Options

10.        Whilst fully supporting the principles of collaboration, the Vale of Glamorgan Council has concerns relating to food safety, specification and flexibility of WPC food arrangements which are detailed below.

11.        Use of the Wiltshire Consortium’s expertise permits the Council’s Catering service to ensure safe and extensive procurement of products required to provide balanced nutritious menus for all establishments.  It further provides confidence in the knowledge that third party audits are consistent and are actual physical audits not desk top audits which has been identified as the case in some Welsh Purchasing Consortium contracted service audits.  It has also been identified that the Welsh Purchasing Consortium use an audit company named STS which is the choice of Value Wales to audit any suppliers who may be successful in gaining any contracts to supply food.  At a recent Value Wales meeting attended by representatives of the Council it was identified that if suppliers who are audited by STS do not pay their invoice for an audit, it does not take place.  This is not acceptable based on the Pennington recommendations that these audits must be undertaken to ensure the highest level of food safety.

12.        The Wiltshire Consortium not only undertakes audits on contracts it manages but also on contracts outside of these as requested by Vale Catering Service at no cost to the Council.  An average cost of a full audit is approximately £500. To date the Wiltshire Consortium has undertaken five full audits of suppliers used by the Council at no charge resulting in a saving of £2,500. The Wiltshire Consortium also attends meetings with Council representatives and suppliers in relation to supplier monitoring and issues relating to non-conformity to contract, as requested at no additional cost. 

13.        The Welsh Government is promoting a range of nutrient, food and drink standards and encouraging local authorities to investigate collaborative opportunities and to actively support local supply chain development.  The Council’s prior and continuing emphasis on providing a quality and nutritious menu means that it is well advanced in achieving the Welsh Government’s stated goals.  Current suppliers being used by the Council purchase from local suppliers where possible and support them by delivering their produce to the catering establishments.  It has been previously identified that while some SMEs wish to supply to the catering service they do not have the distribution network to achieve this.  It has further been identified that some local suppliers prioritise local customers over Council establishments as they consider the general public to be the most important part of their business thereby making local procurement difficult to secure.  By using national supply chains the Council is able to help local business by being the distributor, and achieving local sourcing where possible.  The Wiltshire Consortium consults with national suppliers on our behalf to achieve the Councils goals by using SME’s.

14.        As the following example illustrates, the WPC has proved to be inflexible in the past when dealing with situations requiring a swift resolution. Both the Vale of Glamorgan Council, under an arrangement established via the Wiltshire Consortium, and WPC councils under a WPC arrangement, used to purchase fresh milk from Dairy Farmers of Britain.  In June 2009, Dairy Farmers of Britain ceased trading and both the Vale of Glamorgan Council and WPC councils were left without supply. The Wiltshire Consortium on behalf of the Vale of Glamorgan Council promptly undertook a procurement process and within three months and with adherence to public procurement rules, the Vale of Glamorgan Council had a new supply contract.  The contract continued the use of two local dairies for delivery and introduced a third, thereby illustrating the Council’s support for local businesses. In contrast, the WPC replacement contract was not determined until May 2010.  It was then subject to a potential legal challenge and the procurement process re-started.  The new WPC arrangement for the supply of fresh milk was finally commenced in April 2011, twenty months after the demise of the original supplier; a stark contrast to the three months taken by the Wiltshire Consortium.  Such a lack of speed and flexibility leading to extended time frames for important purchases would be to the Vale of Glamorgan Council’s detriment.

15.        To build on its achievements the Council is continuing to investigate opportunities for increasing use of local produce whilst reducing expenditure. The Council is also investigating collaboration with other authorities and Welsh Purchasing Consortium contracts. Currently the Council is involved in several tender processes relating to Welsh Purchasing Consortium contracts to establish best value.  It should be noted however that collaborative working of this nature is unlikely to produce the savings expected because the sixteen authorities involved will be put into Lots (sub groups with as few as one local authority) to enable local and smaller suppliers to compete. The Council may still be supplied by existing suppliers as the geography of the Vale limits the potential for many suppliers to tender for the business.  The Council’s Catering Department currently looks at existing Welsh Purchasing contracts such as Peters Savoury Products, Sico tables, and soft drinks and purchases from these contracts, but again the products are limited.

16.        In recognition of this, it is recommended that the Council continues to use the Wiltshire Consortium until April 2013 which will in some cases result in an extension of up to one year on existing contracts. In line with advice from Internal Audit, when the extension is agreed on the grocery and provision contract the provision of confectionary will be removed to ensure comparison of best value and opportunity for SME’s to supply.  However it should be noted that the implementation of Welsh Government standards in Comprehensive Schools will result in the supply of confectionary being withdrawn in the future. The extension to existing contracts is  required to enable further investigation of the suitability and viability of Welsh Purchasing Consortium contracts when available, to include risk analysis on 3rd party audits as well as consideration of the potential benefits and risks of other collaborative opportunities.

Resource Implications (Financial and Employment)

17.        Continued use of the Wiltshire Consortium will permit the Catering Service to continue to procure goods effectively as well as ensuring that supplier audits are carried out to a high standard.  Opportunities for securing further procurement efficiencies whist complying with food safety requirements will be further investigated over the coming year.

Legal Implications (to Include Human Rights Implications)

18.        Pennington report to ensure all food businesses in Wales understand and use the HACCP (Hazard Analysis Critical Control Point) approach to independent audits on suppliers of high risk foods (3rd party audits). 

Crime and Disorder Implications

19.        There are no crime and disorder implications.

Equal Opportunities Implications (to include Welsh Language issues)

20.        There are no equal opportunity implications.

Corporate/Service Objectives

21.        Use of the Wiltshire Consortium contributes to the following Corporate Objectives:

·               To make  best use of our assets and to procure good, sustainable services and facilities

·               To improve the health of citizens and encourage healthy lifestyles.

Policy Framework and Budget

22.        This is a matter for Executive decision by the Cabinet.

Consultation (including Ward Member Consultation)

23.        Ward Member consultation is not applicable.

Relevant Scrutiny Committee

24.        Lifelong Learning.

Background Papers

Public Inquiry into the September 2005 Outbreak of E.Coli O157 in South Wales

Contact Officer

Carole Tyley (Catering Manager)

Officers Consulted

Paula Ham (Head of Strategic Planning and Performance)

Alan Jenkins (Head of Accountancy and Resource Management)

Rosalie Malcolm (Procurement Officer)

Responsible Officer:

Bryan Jeffreys

Director of Learning and Development

 

 

 

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