The Resources and Performance Select Committee met to discuss procurement and contract management, corporate performance monitoring, and equality, diversity, and inclusion (EDI) in Surrey. The committee made recommendations to improve contract management, staff performance management, and the use of local small and medium enterprises (SMEs). They also agreed to share insights on EDI with the new unitary authorities that will be created as part of local government reorganisation (LGR).

Review of Procurement and Contract Management

The committee reviewed the council's procurement and contract management processes, focusing on improvements and challenges in implementing the new Procurement Act 2023¹. Darren Cox, Head of Procurement, explained that all contracts are segmented based on risk, complexity, and cost, with level one contracts receiving the most oversight. He said that contract managers must follow the updated contract management framework and a new playbook that is about to be released. A corporate approach to contract management is being developed to provide visibility of contract performance and risk, using contract performance indicators (CPIs) to highlight emerging risks and trigger interventions.

Councillor Robert Hughes raised concerns about key performance indicators (KPIs) that do not accurately reflect service delivery. Darren Cox responded that the council works with services and providers to ensure KPIs are relevant and effective, with the Contracting Commercial Assurance Team (CCA) providing additional support.

Councillor Hazel Watson asked when the new system would be put in place. Darren Cox said that the KPI development is already in place due to the new Procurement Act, and the corporate performance indicator program will be rolled out over the next six months, starting with level one and two contracts in October.

Councillor Steve McCormick asked about the challenges of implementing the new Procurement Act. Darren Cox said that the main challenge was awaiting full guidance from the Cabinet Office, which caused delays. He also noted that the training provided by the Cabinet Office was more useful for those already familiar with the previous regulations, requiring additional training for new staff.

Councillor Lance Spencer asked how the council plans to involve small and medium enterprises (SMEs) to a greater extent. Darren Cox said that one of the objectives of the Procurement Act 2023 is to reduce barriers to entry for SMEs. He also mentioned the introduction of a new social value model based on the government's methodology, engagement with local networks like the Federation of Small Businesses and Chamber of Commerce, and efforts to simplify the tendering process. The council tracks its spending with SMEs, balancing this with value for money considerations.

Councillor David Harmer asked if the new contract management playbook applies to all existing contracts or just new ones. Darren Cox confirmed that it applies to all contracts. The CCA team will monitor compliance with the playbook as part of its ongoing engagements and review schedules, supported by internal audit.

Councillor Lance Spencer asked about training for contract managers and procurement officers. Darren Cox said that the council estimates there are about 400 individuals with contract management responsibilities. He said that the council has a suite of eight e-learning modules and directs officers to government commercial functions contract management courses for more complex contracts. The CCA team will assess the competency of contract managers and provide support to obtain the required training. A new contract management peer network will be established by the end of November to share experiences and seek guidance.

Councillor David Lewis, Cabinet Member for Finance and Resources, added that mandatory training has been issued for staff, with additional training required for managers.

Councillor Hazel Watson asked about the interventions and approaches taken when a contract is underperforming. Lee Redmond, Head of Contract and Commercial Advisory, said that the actions are specific to each contract, and the CCA team supports services in agreeing on a suitable approach. Liz Mills, Director for Customer Culture and Transformation, mentioned the work done with Unit 4 as an example of a successful intervention.

Councillor Nick Darby noted the absence of any reference to the Unit 4 SAP report, which contained recommendations on procurement and contract management. Councillor Steve McCormick agreed that the report was a valuable piece of work and that its lessons learned should be incorporated.

Councillor David Harmer asked how the new annual strategic commercial review process for strategic contracts will improve contract assurance. Darren Cox said that these reviews will provide a deeper dive into contract performance, exploring KPIs, risks, opportunities, and relationships. They will also allow the contract commercial team to engage with services at key stages, such as recommissioning and exit.

Councillor David Harmer asked how the council ensures that it picks up on things that are in danger of getting missed. Darren Cox said that the CCA team provides an independent look at contracts, and the peer networks and groups offer a wider community for contract managers to discuss issues. Andy Brown, the Deputy Chief Executive, added that the business partnering function within resources provides additional oversight.

Councillor Hazel Watson asked how the council obtains assurance over the performance of subcontractors. Darren Cox said that the performance of subcontractors is the responsibility of the tier one supplier, and the council manages the performance of the tier one supplier.

Councillor Riasat Khan raised concerns about unfinished work after highways projects. Darren Cox said that the responsibility lies with the tier one supplier, and the council would raise the issue with the prime contractor.

Councillor Edward Hawkins shared an email from a resident about highway maintenance workers who appeared to be unproductive. Darren Cox responded that such examples should be passed on to the contract management teams for highways.

Councillor Steve McCormick asked how the council's systems identify contract value leakage. Darren Cox said that the council uses a range of fragmented systems, which creates inefficiencies. He said that the CCA team is building a contract management hub, which is a database with a reporting tool that will pull in information from existing contract management and spend systems. The intention is to have this operational by the end of the financial year.

Councillor Steve McCormick asked for examples of where the rapid response turnaround service has been used. Darren Cox mentioned the Unit 4 work and the work with the technology enabled care in the home team.

Councillor Robert Hughes asked if the council is meeting the legal requirement to publish a procurement pipeline of opportunities over £2 million with an 18-month forward look. Darren Cox confirmed that the council is meeting this requirement, with the relevant pipeline projects published prior to the deadline of the end of May 2025.

Councillor Lance Spencer asked how many contracts the county council has that will need to be reviewed when transitioning to the unitary authorities. Darren Cox said that there are 1,461 contracts that will need to be looked at prior to vesting. He outlined the process for managing the transition, including seeking legal advice and collecting and analysing contract information. He noted risks such as suppliers taking advantage of the situation and challenges in disaggregating contracts. Andy Brown added that the business case for LGR includes anticipated implementation costs and that there will be a need to put resources in to manage the transition.

The committee made the following recommendations:

• Welcomed the improvement to the approach to contract management and steps to improve assurance that contracts are being managed effectively and consistently across the authority.
• Noted the reference to the lessons learned from the Unit 4 SAP report and are assured that these are being taken into account on an ongoing basis.
• Supported the enhancement to the staff performance management framework and requested feedback at the appropriate time on take-up of the training.
• Supported the development of the contract management hub to strengthen contract intelligence in preparation of the next financial year, including the increased consideration of local SMEs.

Corporate Performance Monitoring

The committee reviewed the corporate performance monitoring framework, expressing concerns about the level of detail provided in the reports. Andy Brown, the Deputy Chief Executive, introduced the item, explaining that the aim was to put a framework in place for cabinet members to challenge officers and for select committees to hold the cabinet to account.

Councillor Robert Hughes said that the highlight report lacked detail and that many areas were missing compared to previous reports. Councillor Steve McCormick emphasised that the committee should have the right to see indicators in addition to what cabinet members receive.

Sheila Smith, Director of People and Change, said that there are 18 workforce KPIs in the resources performance outcome board, which will be included in future quarterly performance assurance reports. She also mentioned that a workforce report is scheduled for the committee's next meeting in December.

Councillor Steve McCormick asked about the drop in contact centre performance attributed to recruitment issues. Liz Mills, Director for Customer Culture and Transformation, said that the workforce has now stabilised and that the issue is not systemic.

Councillor Riasat Khan asked if customer satisfaction and resolution times are monitored. Liz Mills said that customer satisfaction is high, and resolution rates are also monitored.

Councillor Hazel Watson noted that complaint responses remain significantly below target. Liz Mills said that there is no national benchmark for corporate complaint information and that the council is working to improve its systems and processes.

Councillor Edward Hawkins questioned the corporate debt figure of £7.5 million, asking how it compares with similar authorities and what actions are being taken to reduce it. Rachel Wigley, Director of Finance and Deputy Section 151 Officer, clarified that the figure refers to outstanding debtors, not overall debt, and that it has since decreased to £6.2 million. She said that benchmarking is difficult due to differences in service commissioning and that the council is implementing system automation and enhancing departmental reporting to reduce debt.

Councillor Steve McCormick asked if cabinet members would support the inclusion of KPIs to track progress on capital financing costs and efficiency delivery. Councillor David Lewis, Cabinet Member for Finance and Resources, said that the council has set out its strategic objectives in these areas. Rachel Wigley added that the council reports on its prudential indicators to the audit and governance committee and full council.

Kevin Deenis, the cabinet member for Fire Rescue and Resilience, commented on a report by HM Inspector of Constabulary and Fire Rescue Services, praising the work of the fire and rescue services in Surrey.

The committee made the following recommendations:

• Welcomed the introduction of a more robust and strategic approach to corporate performance.
• Noted the committee plans to review the full list of resources KPIs.

The committee expressed concern that the report lacked sufficient detail to enable independent effective scrutiny and to hold the executive fully accountable for performance.

Equality, Diversity, and Inclusion

The committee discussed a report on equality, diversity, and inclusion (EDI) in Surrey, following up on a 2023 Local Government Association (LGA) peer review. Mark Newty, the cabinet member for Health, Wellbeing and Public Health, introduced the report, explaining that it aimed to understand the impact of inequality across Surrey and create a framework to address it.

Councillor Robert Hughes asked what the expectation is for how Surrey will look different in a year's time as a result of these reports. Nicola Kilvington, Director of Devolution and LDR, said that it will depend on many things, including who experiences the greatest inequality in the county.

Councillor Robert Hughes asked what plans are being put in place to ensure that the findings of the report are used to advance EDI across the community.

Councillor David Harmer asked how the outcomes of this work will be communicated to build a shared understanding of inequality and drive meaningful change.

Councillor Hazel Watson asked where local government has the most influence in change and what should be prioritised. Mark Newty responded that local government has influence everywhere and anywhere. He said that the council is working with national bodies, the Health and Wellbeing Board, and local partners to address inequality. He emphasised the importance of making EIAs more user-friendly and understandable and prioritising equality in all decision-making.

Councillor Steve McCormick asked where the council holds the most influence to affect change and where the most urgent action is needed. Mark Newty said that it is difficult to prioritise one area over another, as they are all interconnected. He said that the most urgent action is to take the report's findings and publicly show people what issues are out there.

Councillor Lance Spencer asked how the insights will be shared with the new unitary authorities and how they should use the framework. Nicola Kilvington said that the evidence base has already been put in the public domain.

Councillor Robert Hughes asked for a summary of the key findings relating to residents who are disabled and whether the study indicates any progress in promoting inclusivity and improving outcomes for this group in Surrey.

Councillor Riasat Khan asked what engagement has been with ethnic minority and traveller communities to address their concerns and needs. He also asked how the council is addressing the fact that United Travellers residents are the most likely not to hold any qualifications.

Councillor Riasat Khan added that integration is a key thing that needs to be worked on, particularly for residents born outside the UK. He and Councillor Lance Spencer expressed concern about ensuring that the strategy is delivered effectively.

Councillor Edward Hawkins commented on the extent of the issue and asked for information on where new gypsy and traveller sites are coming forward.

Councillor Hazel Watson asked how the findings compare with national trends.

The committee made the following recommendations:

• Welcomed the development of the equality, diversity and inclusion framework and the evidence base that underpins it.
• Recommended that the findings from this work be shared with the newly established unity authorities, with the expectation they will draw on these insights to inform the development of their own policies and priorities across their communities.
• Requested sight of the plan to implement the framework with partner organisations.