The measures the county council takes to ensure services are not vulnerable to contractors going bust have been put under scrutiny.

When Carillion – one of the largest providers of construction and facilities management services in the country – collapsed in 2018, it sent shock-waves through the public sector.

Although Hertfordshire County Council didn’t have a direct contract with the company, it emerged the company was was a sub-contractor of the county’s BT broadband roll-out.

And it was as a result of Carillion’s collapse that councillors decided they should scrutinise the arrangements they had in place to deal with contract volatility more generally.

On Monday a group of councillors on a day-long ‘topic group’ looked at the county council’s due diligence processes, contract management and actions when a supplier fails or becomes unstable.

They hope the topic group, which will meet again later in the month, will identify areas that are not as resilient as they could be – and identify some solutions.

Among the issues already identified by the group was the training offered to the council’s 200 contract managers and the sharing of good-practice between departments.

They also highlighted the benefit of sharing information across national sectors  and capturing market intelligence.

According to data supplied to the topic group, the county council spends around £990 million on 1100 different contracts in a year.

These contracts are for a wide range of services, as diverse as maintaining the roads or providing services to older people in care homes.

Councillors were told that in addition to financial analysis, a credit score agency was used to assess each company or organisation that bid to for a contract.

Officers assess the financial stability of a bidder, focussing on both their ability to deliver the contract and whether the future of a particular company could be threatened by becoming over-reliant on a council contract.

And they look at detailed information about the company, that can include  whether they pay their bills on time, company structures and governance.

Once a contract has been awarded, they heard, any company with a contract worth £100,000 or more is subject to daily monitoring.

Contract managers are on the lookout for warning signs that could include unexpected management resignations, delayed financial reports, declining share price or a falling credit score.

And on the ground staff are also aware of any warning signs such as high staff turnover, underinvestment in training or buildings – or even groceries being purchased from local supermarkets, rather than in bulk.

Councillors were told that relevant staff were offered training in contract management.

But they were concerned that only around 120 out of the 200 staff had had the training.

The county council’s head of procurement Paul Drake  stressed that some contracts were much bigger than others. And, he said, better qualified staff were in the roles dealing with larger contracts.

The need for additional training was echoed by Eddie Gibson, a senior manager from the East of England Local Government Association (EELGA).

“I do think skills and knowledge is an area that needs to be looked at,” he said.

“It never ceases to amaze me that councils insist on qualified people in certain positions and yet they are happy for major expenditure to be looked after by people who fall into it.

“You wouldn’t let an unqualified social worker go out and do social work – but you let someone look after a £100,000 contract who is not trained.”

Meanwhile Mr  Gibson highlighted a survey – based on self-reporting from councils nationwide – that suggested Hertfordshire was performing broadly better that others in the area of procurement and contract management.

And in contrast he said the survey pointed to some councils, where staff had reported there were no financial checks on any supplier other than at tendering stage.

He also pointed to the need to raise the status of those managing contract in an organisation.

The topic group will meet again on March 25 when they will consider further evidence and draw up a number of recommendations.