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Housing Forum Partnering Toolkit Getting Started - The Pre-conditions for Succesful Partnering

Ensuring Probity, Audit Trails and Accountability

The Research into the Housing Forum demonstrations revealed the following:

• Serious concerns of some social housing clients that some of their own colleagues in Audit and Legal teams held the view that partnering is a cosy option
• It is claimed that some auditors have expressed the view that it is more difficult to demonstrate audit and probity when the lowest price is not accepted.

Clearly the Egan and Best Value agendas have not yet reached some crucial parts of the wider client functions in social housing. The implication that partnering is a soft option could not be further from the truth. It is neither cosy nor easy, and demands a high level of preparation, organisation, monitoring and measurement.

Partnering is both more demanding and more transparent than traditional procurement where reliance is often placed on lowest price/ very high risk procurement strategies. Traditional project documentation does not explicitly identify or measure project risks. As a result contractors have to guess the risk on the basis of previous similar work and at the same time submit the lowest bid to get the work. More often than not the lowest tender brings the highest outturn costs when delays, disputes and claims are taken into account. Lowest price tendering is not compatible with teamwork or joint risk and value management.

Barriers to change can be overcome by:

• Consulting and communicating early with colleagues in finance, legal and audit teams before embarking on major procurement activities
• Disseminating best practice knowledge and guidance internally.
• Auditors should be encouraged to ask the following questions when reviewing procurement might include:
  • "What will be the out turn cost for the project?"
  • "What additional value can partnering bring to the Client and Residents?"
  • "What positive impact will the arrangement have on Whole Life Costs"
  • "Can the client deliver wider community benefits by accepting the proposals?"
  • "How is the performance of the whole team to be measured and compared in terms of achieving overall value for money, customer satisfaction and continuous improvement"
  • "What costs to the client can be saved by implementing a joint problem resolution process".
• Under traditionally accepted arrangements these questions were rarely asked by Auditors or Legal staff. There is now however a growing body of guidance available to Auditors and other corporate officers in support of construction partnering.
• Clients can however continue to make a strong and robust case for partnering by:
  • Establishing clear practices and procedures which focus on value, performance and measurement
  • Documenting all procurement processes so that they are transparent and auditable.
  • Appointing partners on the basis of an explicit quality / price measurement matrix
  • Establishing clear contract conditions and financial arrangements
  • Operating Open Book Accounting between partner organisations
  • Setting up and regularly reviewing formal benchmarking arrangements

Examples:

The London Borough of Hackney

The London Borough of Hackney after extensive internal consultation with their legal, finance and audit teams reached agreement on a corporate view on partnering and Best Value procurement

View demonstration project.

Barnsley Metropolitan Borough Council Housing Department

Barnsley Metropolitan Borough Council Housing Department used a high level evaluation team to develop its improvement plan.

View demonstration project.

Oldham Metropolitan Borough Council

Oldham Metropolitan Borough Council used a rigorous two stage evaluation method based on an 80/20 quality price matrix.

View demonstration project.