Most projects have a clear governance structure in place for managing the procurement period of the project. There should be equally robust structures in place for the post close period. Changes to the structure may be needed at the point of financial close and therefore the governance arrangements should be reviewed before contract signature. In practice the arrangements for the procurement are likely to be fit for purpose for the period immediately after close and hence there is scope for a more evolutionary change to the new regime.
The governance structure should continue to be reviewed and adjusted to suit the different demands of the project as it progresses in the post close period. There may be a need for changes at the beginning of the construction period, potentially at the beginning of the service period and towards the end of the Contract. Major events affecting the project such as planning delay leading to the need for a Revised Project Plan or a termination being considered may also trigger a review of the need for a change to the governance arrangements. The governance arrangements for the project should not be developed in isolation from pre-existing arrangements within the Authority which may already have been set up for other projects or tasks. In particular if the Authority is undertaking other major projects in the waste function there is likely to be merit in setting up a single over-arching programme governance arrangement to cater for all the projects in the waste function.
|
Example Wiltshire Council is currently in the course of implementing its waste transformation programme following the change from a two tier to a unitary structure on 1 April 2009. The programme encompasses a number of inter-related tasks including developing a new waste strategy, harmonisation of collection services, an efficiencies review, the development of a common management information system as well as the management of a longer term waste PPP contract let in April 2011. |
At every stage the governance arrangements for the project should be clearly documented and the formal procedures should be followed in practice. These should address where accountability sits in the Authority and set out where responsibilities rest for all types of decision making.
A guidance note on project governance in the public sector was issued by HM Treasury19 in 2007 and Contract Management Teams are recommended to consult this document as it will deal with governance in greater detail and provide examples of different governance structures which are appropriate.
The Authority's Contract Management Manual should include a governance chart showing the Contractor's management structure and the Authority's governance arrangements and the inter-relationship between them, so that it is clear who talks to whom and what decisions can be made at each level. The Contract Management Manual should also document the procedures and terms of reference for each of the tiers of governance. These should include:
• composition and roles;
• frequency of meetings and numbers of members required;
• requirements, constraints, interfaces, dependencies;
• responsibilities and delegations;
• accountability within the Authority;
• reporting mechanisms; and
• procedures.
The box below sets out the requirements that the governance arrangements should meet.
|
Requirement for Governance Arrangements The Authority should ensure that the governance arrangements: • meet the representation needs of all relevant stakeholders; • meet the requirements of the project; • fit with the Authority's overall governance structures and procedures; • ideliver the requirements and the remit and terms of reference of any team or board; • do not include any overlap in responsibilities between different levels of governance; • satisfy the requirement for continuity of approach and knowledge from the procurement period into the post close period; • interface appropriately and effectively with the Contractor's governance arrangements; • facilitate good decision making; • support the Contract Management Team; • enable information about the project to be controlled and communicated; • champion the project within the Authority's organisation; • enable the project to be evaluated; • challenge the Contract Management Team when required - for example making sure that the Contract Manager is always acting in the interest of the Authority; and • fulfil all relevant probity obligations. |
Once the governance arrangements are developed the Contract Manager should ensure they are clearly documented and communicated to all parties that need to be aware of the arrangements, including the Contractor. The documentation should also be incorporated into the Contract Management Manual.
|
The Authority's project governance arrangements should be set out in the Pre-Preferred Bidder Final Business Case. WIDP's Transactor will also be required to comment on the governance arrangements in his/her Monthly Report. |
_______________________________________________________________________________________
19 The guidance is available through the HM Treasury website at http://www.hm-treasury.gov.uk/d/ppp_projectgovernanceguidance231107.pdf