North Yorkshire County Council

North Yorkshire County Council

Supply Chain Resilience Board – Pre-emptive Targeted Support for the County Council Supply Chain and Supplier Relief due to COVID-19

Briefly describe the initiative/ project/service; please include your aims and objectives

This submission is based on the supply chain resilience arrangements put in place due to the COVID-19 outbreak. This included pre-emptive targeted support for the Council supply chain and supplier relief due to COVID-19. The intention of these interventions was to secure Council supply chains, ensure service continuity during and after the COVID-19 outbreak and to ensure suppliers at risk would be in a position to resume normal contract delivery once the
outbreak was over. The COVID-19 outbreak had a profound and far reaching impact across all areas of life in the UK, including the supply chains that the Council relies upon to support and at times deliver services. It was inevitable that the Council would experience significant supply chain disruption, and this would have an effect of creating the risk that suppliers in our supply chains would suffer financial distress and possible bankruptcy.

In response to this, and along with guidance from the Cabinet Office in the form of PPN 02/20 – Supplier relief due to COVID- 19 the Procurement & Contract Management Service set up a Supply Chain Resilience process in a matter of weeks. This included setting up a Supply Chain Resilience Board, which was a weekly decision-making and monitoring board, members:
– Corporate Director Strategic Resources (Chair),
– Assistant Chief Executive (Legal),
– Assistant Directors Strategic Resources,
– Head of Procurement and Contract Management,
– Procurement Governance & Development Manager,
– Senior Category Managers and
– Directorate nominated supply chain contacts, including Adult / Children’s Social Care, Transport, Social Care, Technology and others as required.

The intention was to take a proportionate approach and triage suppliers that most needed financial support or could secure and stabilise the key County Council supply chains. The first part of the work on supply chain resilience was support for small and medium size enterprises. Very early in the outbreak, the Council agreed to pay all its’s small and medium size enterprises immediately in an effort to help improve cash flow and ensure businesses did not collapse. This support for the smaller businesses that supply the Council, who are usually paid within 30 days, demonstrated how important they are to our service delivery and the economic vitality of the county. This support will continue until the end of the year. Overall, the Council took immediate and appropriate steps to support its supply chains.

What are the key achievements?

The supply chain resilience process delivered the broad objective of ensuring a proportionate approach which triaged suppliers that most needed financial support or could secure and stabilise the key County Council supply chains. The central governance, coordination and challenge provided the opportunity to give complex financial issues proper consideration and colleagues from across the Council collaborated to deliver the right outcomes for the Council and it’s supply chains. The policy changes and guidance provided by Cabinet Office were unprecedented, and the Council reacted at speed. Supplier relief fell into four categories:
– Immediate payment terms – If the supplier was deemed a small or medium size enterprise, they were moved to immediate payment terms at once.
– Support & Funding on an agreed % sliding scale basis – As the Covid-19 outbreak spreads and its impact on service delivery increases there will be a number of providers, who for a variety of reasons will be unable to deliver their contracted services. In ordinary circumstances this would result in a removal of all payments. These payments may turn out to be payments on account in the same way as option 3. However, further analysis of suppliers / providers may identify some as “high risk” which may result in them requiring additional financial support. Treatment can then be considered on a case by case basis such as in option 3 below.
– Payments on account – it is proposed that all NYCC suppliers / providers should be able to submit a claim for an up-front payment on account equivalent to a maximum of what NYCC would have normally expected to pay for their services in April – June 2020. During this period providers should continue to submit bills for actual services delivered. Payments for these services would only be made once the value of actual services delivered exceeds the payment on account. If at the end of June 2020, the value of services actually delivered does not exceed the payment on account, then NYCC will need to agree with suppliers / providers how to manage future payments. This could include agreeing to write off the difference (i.e. in effect this would become a hardship payment) and / or making a further payment on account. As the end of the first quarter of 2020/21 approaches, NYCC could consider whether it wishes to put in place arrangements for another set of payments on account for a further period.
– Hardship payments – it was proposed that all NYCC suppliers / providers are able to submit claims setting out the additional costs and / or loss of funding they have suffered as a result of Covid-19. NYCC will review these claims and subject to consideration of other means available to suppliers / providers to mitigate cash flow pressures, will consider making hardship payments to sustain supplier / provider viability. These payments would be goodwill gestures and organisations would not be expected to repay them. A robust process would be established for assessing and recording claims with a clear audit trail.

Any payments would be reviewed and agreed at the weekly Supply Chain Resilience Board. The Council were the first in the region and one of the first in the country to mobilise a supplier relief process, and many Councils nationally copied the process we developed, including some deemed leaders in local government. In total, 662 Council suppliers received some form of supplier relief, to a value of around £6.4 million. In addition, 1,000 SME suppliers have benefitted from immediate payments since April.

What are the key learning points?

It was important to put this process in place for the Council, and we learned to react quickly to supply chain distress and issues of resilience. Creating policy and process ‘on the move’ is uncomfortable but collective thinking and effort paved the way to success. It also reminded us of the importance of really knowing an understanding our supply chains, and the importance of intelligence and data for this. We have also realised the true value of supply chain resilience, and will keep the Board in place in the longer term as part of our enhanced contract management aims and objectives. This has proved useful as issues relating to Brexit have impacted our supply chains, and we feel better prepared, and able to respond to these issues. Another challenge we faced was the fact contract management in the main is dispersed across the Council, so collaboration and team work were needed to respond to the supplier issues we faced. We built strong relationships with key Directorate and Service representatives to ensure we could support them with their changing and often last minute urgent requirements. Continuously learning from our experience, we collectively went the extra mile on more occasions than I can count, and this piece of work has been an extraordinary effort by many NYCC staff to get to this point, and means we are ready to deal with any supply chain resilience issues in the winter or beyond.

COVID-19 Response Recognition Award

The Council were the first in the region and one of the first in the country to mobilise a supplier relief process in response to COVID-19, and we were able to support and protect our at risk supply chains. We have supported over 1000 SMEs and have helped secure employment for their staff. In turn, this helped support and protect front line service delivery, especially in the adult and children social care areas. In particular, we have provided unprecedented support to adult social care providers, without which we would have been unable to support the NHS and care for the most vulnerable age group in relation to serious illness risk from COVID-19.