Agenda item

In accordance with the decision recorded under Article 1 of this minute, the following item of business was considered with the press and public excluded.

The Council had before it a report by the Director of Corporate Governance which presented the outline business case for the externalisation of Corporate Governance.

The report advised that the outline business case, which had been prepared by KPMG and was appended to the report, presented indicative benefits and costs, and set a direction of travel which would allow Corporate Governance to deliver greater quality services and savings in line with the Council’s Business Plan. The business case looked at the feasibility of externalisation, the potential benefits and scope, and considered the following three options for transformation (1) Internal Transformation; (2) Shared Services; and (3) Partner with third party Business Process Outsource (BPO) providers.

The report expanded upon each option and concluded that the preferred option was partnering with a third party BPO provider, which was based on an analysis of different options for transformation; a financial appraisal of anticipated costs and benefits; benchmarking data; and soft market testing. This type of transformation would involve the Council contracting with a third party to provide processes and outcomes. The report explained that the BPO market was mature and there were many examples where services were being provided more cost effectively than in-house.

The report went on to provide a detailed financial appraisal and summarised the benchmarking data that had been utilised. Soft market testing had generated strong interest from a number of BPO providers. In regard to procurement, the report recommended issuing an Official Journal of the European Union (OJEU) notice that would cover the entirety of services currently provided by Corporate Governance, and detailed the rationale behind the recommendation.

The report recommended:-

that the Council -

(a)              approve the commencement of a competitive dialogue procurement process, including issuing an OJEU contract notice and Pre-Qualification Questionnaire for externalisation of services currently provided by Corporate Governance; and

(b)              (1) approve the commencement of a tendering process for the procurement of external consultancy to assist with the competitive dialogue procurement process;  and (2) delegate power to the Director of Corporate Governance, the Head of Legal and Democratic Services, the Head of Finance and the Head of Procurement, in consultation with the Convener of the Finance and Resources Committee, to award a contract to the preferred tenderer for the external consultancy subject to a preferred tenderer being identified.

Councillor Kevin Stewart moved, seconded by Councillor Dean:-

That the Council approve recommendations (a) and (b)(1), and instruct that officers report to the Finance and Resources Committee seeking approval to award a contract to the preferred tenderer for the external consultancy, arising from recommendation (b)(1), subject to a preferred tenderer being identified.

Councillor Cooney moved as an amendment, seconded by Councillor Young:-

That the Council do not enter into the procurement process for outsourcing Corporate Governance operations and these services be kept in-house.

In response to questions from members, the Director of Corporate Governance explained that it had become apparent, during soft market testing, that there was no appetite for Legal and Democratic Services within the marketplace, which meant that the Council would be looking at a shared service approach in relation to those services.

On a division, there voted:-

For the motion  (25)  -  Lord Provost Peter Stephen; Depute Provost Dunbar; and Councillors Corall, Cormack, Cormie, Dean, Fletcher, Greig, Jaffrey, Kiddie, Leslie, McCaig, McDonald, Malone, May, Noble, Penny, Reynolds, Robertson, John Stewart, Kevin Stewart, Wendy Stuart, John West, Kirsty West and Yuill.

For the amendment  (10)  -  Councillors Adam, Allan, Cooney, Donnelly, Graham, Hunter, Ironside, Laing, Wisely and Young.

Declined to vote  (2)  -  Councillors Boulton and Farquharson.

Absent from the division  (5)  -  Councillors Cassie, Clark, Collie, Crockett and Milne.

The Council resolved:-

to adopt the motion.

In terms of Standing Order 15(6), Councillors Adam, Allan, Cooney, Graham, Hunter, Ironside, Laing and Young expressed their dissent at the above decision.

- PETER STEPHEN, Lord Provost.