To consider the terms of reference of the internal audit review.  

The Panel considered the draft terms of reference for the Internal Audit review of the Commissioned Services Highways Contract Performance.

The Chairman informed that at the last meeting a review of commissioned services was added to the Panel’s work programme with a focus on the highways contract.  As Internal Audit were also undertaking a review he questioned if the Panel’s work should wait until after internal audit had completed their work or to hold a separate Task and Finish Group.  He was mindful of not duplicating work but also for the need for independent scrutiny.

Cllr Sharpe reported that as long as we had sight of the contract performance we should allow auditors to do their review and report back their findings. 

Councillor Hill was keen on holding a task and finish group as it would allow for clear scrutiny of the contract in question, its original purpose whilst also considering whether outsourcing the Highways contract was still the right thing to do and how we approach outsourcing in the future.  

Councillor Werner supported the idea of a task and finish group as members could draw down into any issues. He argued that according to reports, outsourcing was originally a method of saving, but this was now no longer true. He highlighted that it was important that RBWM was still gaining significant benefits from outsourcing, and should amend the agreement if this was not the case. This was agreed by Councillors Sharpe and Hill.

The Chairman mentioned that this panel should concentrate its efforts looking at the contractual arrangements only if there were operational issues these would fall into the remit of the Infrastructure O&S Panel.

Cllr Hill said that one of the consequences of outsourcing the highways function was that members  could no longer come into the Town Hall to discuss and report issues with officers as they were now located in Slough.  Cllr Walters agreed that it was more difficult to speak directly with officers.

Cllr Sharpe said that during the 1980’s and 1990’s there had been huge benefits to outsourcing but now we needed to look at how we operated such agreements and it was important that the council retained core skills so it could be an intelligent customer to extract the benefits from contracts.  There were benefits such as economies of scale that the council did not have.  There needed to be clear benefits and reasons to bringing services back in house.

Cllr Hill said that the council was the highways authority and should retain core expertise.   The obligations of the contract may be met but anything outside its scope cost the council additional money.

The Chairman invited Duncan Sharkey (Managing Director) for his comments, to which he encouraged Members to use the ‘Report It’ function and only by receiving feedback can the contractors improve. The contract was currently delivering good value for money, and that they would often go above and beyond expectations. However, Duncan Sharkey admitted that they would need to improve their communication for example explaining when a fix was temporary. He said this item tonight was about the proposed terms of reference of the internal audit review, if the Panel wished to set up a task and finish group members would have to be clear on their objectives and have time to undertake a review.

The Chairman said that there were two issues the details of the highways contract and wider issues of how we act as a commissioning authority in the future.  The audit terms of reference looked at the contract.  The Managing Director informed that the proposal was for the audit review to be undertaken and feed into a potential task and finish group. 

Councillor Werner agreed that the findings of the audit review should feed into the task and finish group.  He said the task and finish group should be looking at how the council should award contracts in the future or if services should be kept in-house. Councillor Sharpe argued that the Panel should look at a set of guidelines or framework for how to arrive at a decision on future contracts.

The Managing Director said that the Director of Adults, Health and Commissioning was producing a commissioning strategy and that the Panel may wish to review an initial draft.

Councillor Hill believed that the council had outsourced many of its services recently, but that it was about delivering the best service possible to the public, with the outcome being the most important thing.  We had to decide if we were to be a commissioning authority or to maintain core competencies in house.

The Panel noted the internal audits terms of reference and agreed that Panel members would consider how they wished to proceed with their task and finish group.