Hampshire County Council
Schools Forum /
Item 10
19 May 2009
Contracts Affecting Schools
Report by the Director of Property, Business and Regulatory Services

Contact: Neil Jones,01962 846180,

1 / Summary
1.1 / The purpose of this report is to provide members of the Schools Forum with information relating to the programme of contracting activity that is likely to be undertaken by CountySupplies, part of the Property, Business and Regulatory Services Department (PBRS). These details are intended to enable the Forum to determine any requirement for further consultation about individual contract arrangements.
1.2 / CountySupplies seeks to provide schools with a wide range of pre-tendered, value-for-money arrangements for goods and services. Relatively few contracts require a firm or long-term commitment from schools. Schools continue to give strong support to these arrangements
1.3 / Dialogue between representatives of schools and CountySupplies already takes place, but this report is intended to provide a formal opportunity to identify specific contracts where formal consultation is required or needs to be extended. Consequently, the Forum is asked to consider whether it requires further reports on any individual contract and identify any issues that need to be addressed, particularly in relation to contract specifications, performance and the range of contracts in place
2. / Background
2.1 / The functions of the Schools Forum include a requirement for the County Council to consult the Forum on the terms of any relevant contract at least one month prior to the invitation of tenders. This formal requirement applies to contracts with a value in excess of the thresholds stated in the relevant E.U. Directives (approximately £140,000) and which are funded from delegated budgets through buy-back arrangements or from retained funds within the Schools Budget. A report based on these criteria would involve relatively few contracts and it has previously been agreed that more comprehensive information would be reported. This report follows the same format as those considered by the Forum in recent years.
2.2 / CountySupplies provides a purchasing, distribution and advice service to all parts of the County Council and to eligible external customers. A key function is to aggregate the expenditure of a wide range of budget holders in order to establish purchasing and supply arrangements that offer value-for-money, avoid the unnecessary duplication of effort, provide the security of the County Council’s contract terms and conditions and offer compliance with Contract Standing Orders. The County Council places a general requirement on departments to use these arrangements, but for the majority of contracts, the participation of schools is based on their decision to ‘opt in’ or place orders with the companies appointed by CountySupplies.
2.3 / In 2008/09, the total value of CountySupplies’ portfolio of contracts (including expenditure by external bodies) was some £121 million.
3. / Forthcoming Contracts
3.1 / A list of forthcoming contracts for the period up to August 2010is shown in Appendix One. The list is shown in date order and includes:
  • framework arrangements that enable budget holders to source their requirements direct from a supplier or contractor
  • ‘group’ service and supply contracts
  • goods supplied through CountySupplies’ warehouse operation

3.2 / Contracts not managed by CountySupplies are not included in this report and the list also excludes all contracts that are concluded on behalf of individual schools. Around sixty of these ‘single site’ contracts are expected to be tendered over the next eighteen months.
3.3 / The value stated for each contract is to provide a general indication only. Most contracts include a provision for the initial contract period to be extended by at least one year and this may mean that the next tendering exercise takes place later than stated.
3.4 / Contracts are reviewed periodically and opportunities for schools to give feedback on contracts are available in the form of the Primary Headteachers’ Conference (PBRS Standing Committee), the County Supplies Administration Officers User Group and normal communication channels. Subject to the agreement of the Forum, this report will be circulated to the attendees of the PBRS liaison meetings with both primary and secondary headteachers for review and comment.
3.5 / It is intended to implement improved contracting arrangements in four main areas in the coming year:
  • Cleaning Framework – A framework contract is now in place to cover cleaning contracts for schools, which will assist in streamlining the process for smaller contracts
  • Window cleaning – a framework contract is being formalised to cover arrangements for window cleaning. All companies on the framework have appropriate insurance cover, method statements, staff vetting, and risk assessments to enable them to carry out this work, which is expected to reduce risks and improve service quality.
  • Supply Teachers – a successor contract is planned for later this year, which will involve joint working with other local authorities. The new framework will enable better management controls to operate.
  • Security – a successor contract will be let in conjunction with property services to cover both mobile and static security services.

4. / Energy Costs
4.1 / The County Council’s arrangements for the supply of both electricity and gas are due for renewal this coming autumn. Energy prices continue to be subject to large and rapid movements, as experienced over the last few years and this remains a volatile and difficult market in which to purchase. In last year’s forthcoming contracts report, significant increases in energy costs were signaled and these increases duly arrived in the autumn of 2008. Since then market conditions changed considerably and early advantage has been taken of falling electricity prices in order to secure lower prices for electricity for all sites from this autumn. Prices for medium and larger sites have been fixed for two years.
4.2 / With regards to gas, CountySupplies arranged a two-year fixed price contract which started in November 2007. This provided an average saving of around 28% on the previous cost (worth an estimated £1.47m pa to schools). Gas prices have subsequently risen sharply, but we have been ‘insulated’ from these market conditions for the past year because of the two year contract. Although the market has fallen in recent months, an increase in the delivered price of mains gas is still anticipated when the new prices are set in the autumn.
4.3 / To address some of the adverse impact of the rapid fluctuations in energy markets, CountySupplies has reviewed alternative procurement arrangements. One of these includes “flexible” procurement, which involves purchasing individual “packets” of energy over a period of time to create a portfolio that will meet the County Councils energy needs. The effect of this approach would be to remove some of the timing risk involved in energy purchasing and should, in principle, provide the opportunity to take advantage of periods when forward prices are relatively low. Such an approach may help to achieve slightly more favourable average prices over the longer term, but this is not guaranteed and it does not offer protection from any overall, ongoing increase in prices. The County Council is to join other authorities in arranging gas purchases on this basis for the next contract round.
4.4 / Using the 2007 prices as a baseline (100), the following is a graphical representation of the electricity prices agreed for the past two contracts.

5. / Collaboration
5.1 / The County Council participates in the Central Buying Consortium (CBC) to increase its buying power and apply downward pressure to costs. The CBC consists of the central purchasing departments of seventeen local authorities working together to improve the goods and services arrangements in their ‘home’ authorities through joint procurement. As reported last year, contracting is also now being undertaken in conjunction with other local authority consortia, particularly with the Eastern Shires Purchasing Organisation (ESPO). These contracts are identified in the attached schedule and in total more than £25 million is directed through these collaborative arrangements each year. This collaboration typically achieves an average of at least 10% savings.
6. / Recommendations
6.1 / It is recommended that the Schools Forum should:
  • Note the programme of contracting activity to be undertaken by County Supplies.
  • Determine whether further detailed consultation with the Forum is required on any of the contracts due to be let between May 2009 and April 2010.
  • Confirm that it wishes this report to be presented to the existing liaison meetings between the Property, Business and Regulatory Services Department and the Primary and Secondary Head Teachers’ Conferences.
  • Receive a further update on forthcoming contracts in twelve months time.

Appendix One

(a) Forthcoming Contracts - Direct Supply/ Call-off Arrangements
Contract Title (CBC is named where the contractis
made jointly with other local authorities) / Indicative AnnualValue (all users) / Planned
Date
£000s
i. Start dates up to01 April 2010
Security and Fire Safes (CBC) / 15 / 01-Jun-09
Folding Furniture (CBC) / 200 / 01-Jun-09
Information & Participation Service - Aiming High (Children with Disabilities) / 450 / 01-Jun-09
Graphic Design / 360 / 01-Jul-09
Security – Schools (in arrangement with Property Service) / 280 / 01-Jul-09
Cabinet Roller Towels / 35 / 01-Jul-09
Vending Equipment & Supplies / 100 / 01-Aug-09
Milk and Morning Goods / 500 / 01-Aug-09
Maintenance of Audio Visual Equipment / 80 / 01-Sep-09
Mobile Gas Heaters / 5 / 01-Sep-09
Provision of Supply Teaching Services / 2,000 / 01-Sep-09
Point of Use & Bottled Water Coolers + Ancillary Products (CBC) / 160 / 01-Oct-09
Calculators / 30 / 01-Oct-09
Brown Goods (CBC) / 70 / 01-Oct-09
Sewing Machines / 20 / 01-Oct-09
Maintenance of Microwave Ovens / 2 / 01-Oct-09
Steel Lockers (CBC) / 50 / 01-Oct-09
Classroom Tables (CBC) / 180 / 01-Nov-09
Security - Vacant Sites / 115 / 01-Nov-09
Flooring Services (CBC) / 200 / 01-Nov-09
Gas (CBC) and Electricity supplies
(half hourly, maximum demand and small sites*) / 13,600 / 01-Oct-09
Domestic Electrical Appliances (CBC) / 90 / 01-Dec-09
Playground Equipment (CBC) / 120 / 01-Dec-09
Timber and Fencing / 700 / 01-Dec-09
Welding Equipment / 8 / 01-Jan-10
Propane/Butane - Bulk and Cylinders / 15 / 01-Jan-10
Grounds Maintenance - Area 2 / 18 / 01-Jan-10
Software (CBC) / 1,100 / 01-Jan-10
Grounds Maintenance - South West / 178 / 01-Jan-10
Grounds Maintenance - South East 2 / 211 / 01-Jan-10
Grounds Maintenance - South East 1 / 201 / 01-Jan-10
Grounds Maintenance - South Central / 233 / 01-Jan-10
Grounds Maintenance - Area 1 / 42 / 01-Jan-10
Tuning/Maintenance of Pianos / 30 / 01-Feb-10
Office Dictation Machines (CBC) / 10 / 01-Feb-10
Total / £21.4 million
* See Section 4 above
ii. Start dates beyond 01 April 2010
Meter Operator / 40 / 01-Apr-10
Saw Sharpening / 5 / 01-Apr-10
Maintenance and Repair of Metal/Woodwork Machines / 20 / 01-Apr-10
Office Machines (CBC) / 107 / 01-Apr-10
Cash Collection / 150 / 16-Apr-10
Maintenance of PE Equipment / 55 / 01-May-10
Print (Framework & Ancillary Services) / 729 / 01-May-10
School and Corporate Textbooks / 2,900 / 01-Jun-10
Childcare Vouchers - Salary Sacrifice / 1,600 / 01-Jun-10
First Aid & Medical (CBC) / 60 / 01-Aug-10
Entrance Matting / 29 / 01-Sep-10
Wooden Storage Furniture (CBC) / 120 / 01-Sep-10
Total / £5.8 million
(b) Forthcoming Contracts – SuppliedVia The CountySuppliesWarehouse
i. Start dates up to 01 April 2010
Science Equipment & Materials (CBC) / 55 / 01-Jun-09
PVA Adhesives (CBC) / 33 / 01-Jul-09
Computer Consumables (CBC) / 1,000 / 01-Jul-09
Pulpboard (CBC) / 42 / 01-Jul-09
Modelling Materials (CBC) / 39 / 01-Aug-09
Recording Media (CBC) / 60 / 01-Sep-09
Art Paints (CBC) / 99 / 01-Oct-09
Art, Craft & Display Papers / 105 / 01-Oct-09
Exercise Books & Papers (CBC) / 536 / 01-Oct-09
Drawing Equipment (CBC) / 18 / 01-Oct-09
Zip Wallets / 56 / 01-Dec-09
Adhesive Tape / 20 / 01-Jan-10
Education Diaries (CBC) / 39 / 01-Jan-10
Ring Binders, Box Files & Lever Arch Files (CBC) / 99 / 01-Jan-10
Coated Papers / 80 / 01-Jan-10
Total / £2.3million
ii. Start dates beyond 01 April 2010
Document Presentation Equipment (CBC) / 6 / 01-Apr-10
Manilla Files & Folders / 62 / 01-Apr-10
Black Waste Sacks (CBC) / 95 / 01-Apr-10
Whiteboard Markers (CBC) / 156 / 01-Apr-10
PVC Accessories (CBC) / 42 / 01-Apr-10
Calendar Year Diaries (CBC) / 10 / 01-May-10
Staplers, Staples and Perforators / 33 / 01-Jun-10
Book Covering Film / 14 / 01-Jun-10
Education Audio Goods (CBC) / 75 / 01-Sep-10
Cartridge Paper (CBC) / 40 / 01-Sep-10
Total / £0.5 million
Grand Total / £30 million

Notes:

Contracts shown in bold offer suppliers a commitment that schools will participate.

Contracts shown in grey are for information only.

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