Edinburgh to halt contract process after Deloitte criticism

Edinburgh Council is set to halt a controversial retendering process for support services for disabled people after it was criticised in an independent report.

The council angered disabled people in the city when it suspended awarding direct payments while it retendered for the contracts last year.

The council was aiming to slash the number of home care and housing support providers from 36 to save £2.4m from its annual budget. However, campaigners claimed many service users had applied for direct payments to retain their existing providers.

In November 2009, the council’s leadership was defeated by an opposition motion specifying that a backlog of 209 direct payment applications should be cleared before any new contracts were awarded. Then in December the retendering process was suspended until an independent inquiry was completed.

The independent report by consultancy Deloitte has remained confidential. However, its conclusions were summarised in a report to councillors by Edinburgh chief executive Tom Aitchison, who is advising members to halt the retendering process and not award the contracts to the eight successful bidders.

A decision will be taken by the council’s finance and resources committee on Thursday.

Deloitte found that the tendering process “was not as sufficiently meticulous or as thorough as might have been expected” and that the level of direct payment applications may require a reassessment of the tenders.

In his report, Aitchison said the number of direct payment applications was 483, out of just under 800 service users affected, which was “far greater than expected and seriously undermines the viability of awarding contracts”.

Deloitte’s report, costing £80,000, also raised questions about how the council’s quality assurance process assessed bids.

Before the Deloitte report, there had been concerns over whether the assessment of quality had been fully separated from that of price in the appraisal of the bids.

Ian Hood, co-ordinator of the Learning Disability Alliance Scotland, which has campaigned against the implementation of the new contracts, said it was time to review how the council handled tenders in social care.

“Edinburgh Council now needs to learn that it cannot treat people with disabilities in the same way it treats paper clips or potholes,” he said. “It must review the process that it has used to ensure that this never happens again.”

Council leader Jenny Dawe said: “I am disappointed that the tender evaluation process appears to have been less than perfect and I will be instructing the chief executive to bring forward a full ‘lessons learned’ report.”

Aitchison recommended that, over the next year, the council maintains existing service contracts but negotiates down the prices of those charging more than £15.04 an hour, a proposed “ceiling” for direct payments, based on the average prices offered by the originally successful contract bidders. He said this should ensure the council achieves the proposed £2.4m budgetary saving.

In the meantime, a new commissioning strategy would be developed taking into account the failings of the retendering process. Aitchison said this would be prepared for consideration by the council in the summer.

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