Agenda item

Quarter 1 Performance Report - Commercial Development Services


B Hosier highlighted that the Procurement and Contracted Services team moved into a new commercial strategy and delivery portfolio, led by Councillor Williams. He drew attention to point 3 on procurement compliance on page 68-69 which is a new entry that came from an internal audit report that recommended the number of times in any 1 quarter that the procurement standing orders were set aside and for non-compliant expenditure to be reported to the Committee.


Councillor Symington thanked B Hosier for the report and appreciated the response to the recommendation from the Audit Committee. Councillor Symington then referred to page 68 of the report, commenting that non-compliant aspects were listed but no costs were attached.


B Hosier agreed that no figures are listed, and any figures included would be contractual, which are published on the website. He confirmed he would come back to members with the value of the contracts, adding that they are only non-compliant from when the contract has expired and that the table lists mitigations for each item. Action.


Councillor Symington asked what the effect was of the 40% decrease in penalty charge notices (PCN) as noted on page 71.


B Hosier advised that this has resulted in a considerable shortfall for the council though he did not have the figures for the direct financial impact. He said we should bear in mind that there were two levels of income from a PCN depending on how quickly the penalty payment was made, as there was a discount for paying within the first 14 days. Some PCN’s will be challenged and then written off.


Councillor Symington queried if there would be an impact on the contract with the contractors Saba.


B Hosier confirmed that there are no targets on the number of PCNs issued and it would not impact on Saba, though if Saba do not fulfil the minimum number of Civil Enforcement Officer’s (CEO) each day then there is a financial penalty to them.

Councillor Symington asked B Hosier to expand on the Berkhamsted Leisure contract, commenting that they don't appear to have recovered as they may have done and that they appear to be running at a £145k deficit.


B Hosier explained that was the amount that Everyone Active have lost on the contract. DBC receive £35,833 each month as a management fee and that the loss would be picked up by Everyone Active.


Councillor Symington clarified that Everyone Active have communicated that they are losing money on the contract and have historically asked for a subsidy on this. She asked what negotiations are taking place around this.


B Hosier advised that historically Everyone Active paid a management fee to the council but during the pandemic and lockdown periods they lost significant income and therefore DBC made some decisions to support them. This year they negotiated a management fee so that the council didn’t lose money, though Everyone Active are still making a financial loss. Everyone Active would need to approach us if they needed support and we will possibly look at negotiating an alternative solution for next year in terms of what management fee they will pay. B Hosier confirmed that the council have offered ample support throughout the pandemic. Berkhamsted Leisure Centre has improved and is almost at post-Covid levels, however the market is saturated in Hemel Hempstead and that does cause difficulties.


Councillor Symington commented that Everyone Active not making money will ultimately affect the council, stating that she supports the public provision of sports facilities but also wants to understand the finances going forward for us as a Council.


The Chairman noted there was an ongoing commercial dialogue with regular suppliers and that DBC react to these situations.


B Hosier confirmed this, adding that sometimes alternative solutions need to be found.


Councillor Adeleke referred to page 68 of the report and the tree maintenance services, commenting that given issues with previous contracts, could they look for local contractors to help with the local cost of living crisis.


B Hosier advised that the contract was awarded in May via a portfolio holder decision and that the contract was substantial and required a certain level of accreditation. He said he was unsure if the supplier was local but suggested that they often are, given that they are working in the area for a considerable period of time.


Councillor Mahmood referred to Everyone Active, asking what mitigations were in place and how the support we gave compared to other neighbouring boroughs.


B Hosier responded that we were in constant contact with neighbouring authorities throughout the pandemic, noting that if they did not continue to support the leisure industry then the industry would not be able to support those suffering with the impact of Covid. There was a consistent approach within Hertfordshire and advice was also sought nationally. With regards to mitigations, B Hosier noted that they have a contract with Everyone Active and they are working together with the contractor as residents and businesses will feel the impact should the contract fail.




The report was noted.