Liverpool Council has avoided another expensive contract mix-up at the eleventh hour after its system for paying staff was on the cusp of running out.
The local authority has awarded a new £500,000 contract to Oracle Corporation UK Limited for the next two years to continue to provide its vital back office services. However, the need for a new deal was only raised with cabinet members as late as last week, despite its existing contract running out tomorrow.
Had this been missed, an additional £15,000 would have been added to the existing agreement with the cash-strapped council as part of a 3% uplift on contracts applied by Oracle. Cabinet members met this morning to approve the new contract and criticised the slow process in finalising the new terms.
READ MORE: Son issues plea to Liverpool FC fans as dad 'vanishes' in Paris
The mix-up comes just weeks after it was revealed a series of calamitous errors within the local authority have led to an extra £5m being added onto its own energy bill, with a potential total extra hit to the city of £16m impacting schools and the local fire service. A report to cabinet, added just 24 hours before the meeting was due to take place, said the contract had been “a long-standing issue and it is now unclear due to the passage of time, how this issue occurred following the disestablishment of the former Liverpool Direct Limited joint venture through which this support arrangement was originally provided.”
It was said the council began work last December to find the best approach to renewing the existing support and maintenance contract following the offer from Oracle to waive the 3% per annum uplift. This included identifying alternative providers to mitigate additional costs to the council while ensuring continued specialist support for its HR system.
A report to cabinet was prepared on February 15 seeking approval for the contracts which was withdrawn due to clarification questions raised by Legal Services. As a result, an agreement was only reached that satisfied all parties on May 18, three months later and 10 days before the existing agreement was due to run out.
The cabinet report discussed this morning said the timescale between the required decision and execution of new support arrangements was “unacceptably short and generated a real risk that appropriate support may not have been secured.” It added that the length of time “provided insufficient opportunity to progress decision making and resulted in a decision being required as a matter of urgency.”
The commissioners appointed to oversee the council said the situation “exemplifies the systemic issues that must be addressed across the organisation. It is unacceptable that the matter has been brought for decision in the way it has but given the nature of the service contract in question, and the risks that would ensue by not entering into the agreement proposed, there seems to be little alternative.
“However, this cannot continue to be a feature of the council and the way it operates. Procurement was a matter flagged in the Caller report and urgent progress is now needed to ensure that all accountable officers in directorates, as well as in the corporate centre, understand and deliver their obligations to define their commissioning/purchasing requirements, manage their contracts and plan for competitive tender processes.
“The council needs to take decisions, in good time, exploring all options, to achieve Best Value.” Cllr Jane Corbett told this morning’s meeting that this was of working was “unacceptable” and requested to be told what systems were in place to ensure this never happens again.
She added she agreed with the commissioners’ comments and called on chief executive Tony Reeves to provide a report to Mayor Joanne Anderson and cabinet to show lessons have been learned and controls are in place to ensure best value. Cllr Harry Doyle, cabinet member for culture and visitor economy, described the situation as “extremely frustrating” and said it was unacceptable that the report had been put before the cabinet less than 24 hours before they were due to meet.
Mr Reeves told members he recognised their concerns and “can’t today give you an assurance but want to come into the next meeting and we will set out exactly what we’ve done.” He added it is “very disappointing” that this has happened and controls set out three months ago are not consistently being applied across the council
The chief executive offered his apology for the lack of “timeliness” for the report being delivered and said every contract was being checked to ensure there were “no more issues that will blow up.” In a statement, a Liverpool Council spokesperson said: “We fully support the comments from the Commissioners and are taking steps to address the issues highlighted.
"This is a key part of our improvement journey with all contracts being reviewed to make sure there is a clear process for ensuring decisions are made in a planned and timely fashion.”
