ProClass 

Terms of Reference

ProClass Management Board

TERMS OF REFERENCE



1.        PURPOSE


The purpose of the ProClass Management Board (hereinafter referred to as the Board) is to manage and promote the ProClass classification structure on behalf of its owner English local government. In doing this it can appoint suitable contractors (currently Coding International Ltd) to undertake any activities regarding the successful management of ProClass and its ability to become embedded in every local authority.



2.        SCOPE


ProClass is a classification not a coding structure and does not seek to replace any coding structures that are currently being used by any organisation. A classification structure logically groups similar things together into classes or families for the purpose of analysis.  Hierarchical classifications allow analysis to be done at macro or micro levels, depending on business need. For example, the purchase of a computer work screen may need to be analysed at macro level under “IT spend” or micro level under “computer peripherals spend”.

A classification is used for analysing, searching and decision-making.
For the purposes of this paper, the term “coding” means a reference that unambiguously identifies a specific thing be it a commodity or service.  “Classification” means a reference that groups related things together for analysis.


ProClass supports the following business functions:

  • Expenditure analysis at a macro level targeting high value and/or risk areas. This will support the like for like exchange of information between regions in the first instance and councils to exchange information on like for like basis for the purposes of planning, collaborative working, developing business cases, identifying shared service opportunities and driving out cashable savings
  • Contract management (including underpinning registers) and coordination / exchange of information about available contracts

ProClass is not intended to support any of the following business functions:

  • Analysis of expenditure by supplier
  • Support for policies on SMEs / BMEs and/ or economic regeneration
  • Catalogue content and/or trade with the private sector
  • Budget planning and forecasting

ProClass is not designed to replace any existing coding structures that are used (e.g. UNSPSC / NSV / CPV) by any council. Mappings to each of these codes were developed in 2006 by Coding International Ltd on behalf of the Regional Centres of Excellence.



3.    THE BOARD


Each of the nine English regions has a seat on the Board ( either as a Full Member or Associate Member) that would be occupied by either the Director of the Regional Improvement and Efficiency Programme (RIEP) or a nominated deputy who is capable of understanding the issues being considered by the Group and authorised to take decisions.

The Board is responsible for:

(i)
Managing the procurement classification (ProClass) and maintaining its integrity, ensuring that it evolves in a controlled and consistent manner. This is currently being done through a third party, Coding International Ltd

(ii)
Considering changes / amendments to the procurement classification against the agreed operational criteria (see Appendix A) and ensuring such changes are incorporated through a strict version control mechanism

(iii)
Commissioning appropriate work (e.g. publishing mapping exercises onto UNSPSC, NSV and Thompson as well as CIPFA classifications if appropriate)

(iv)
Coordinating and publicising outcomes with key vendors (primarily those engaged in expenditure analysis, contracts registers / databases and providers of financial systems)

(v)
Recommending any national commissioning work to the RIEPs, or any successor body where suitable economies of scale and /or operational consistency may be achieved

(vi)
Ensuring that the procurement classification is actively marketed to English local authorities, and its purpose fully understood, by local councils, corporate bodies and other interested third parties (both public and private)

(vii)
Resolving any issues or disputes that are likely to impede the successful adoption of the procurement classification by local authorities

(viii)
Encouraging all local councils to adopt the procurement classification at the earliest opportunity thorough on going consultation and embed it into their systems and processes

(ix)
Ensuring that the reasoning behind the procurement classification and the benefits of adopting it are fully understood and promulgated through workshops and training programmes

(x)
Managing the relationship with Coding International Ltd (or any successor)


The Board will be chaired by a Full Board Member from one of the regions voted in by the Board itself.



4.    MEMBERSHIP


    There are two types of Board membership:

  • Full membership means actively participating with full representation and voting rights. This is restricted to representatives from RIEPs who contribute an equal share to the funding of the ProClass project.
  • Associate membership will be conferred on any non-funding RIEP representative.
  • Associate membership may also be extended to any interested party or specialist advisor at the invitation of the Board. Associate members have no voting rights.


5.    REPRESENTATION


Each of the funding Regional Improvement and Efficiency Partnerships is entitled to nominate one representative to the Board as follows:

Only full member representatives so nominated, or their deputy, will be entitled to vote and each representative will have one vote. Decisions taken will be on the basis of a simple majority. A quorum of 5 full members is required to transact business.

Substitute member representatives with full voting powers will be permitted, but must announce their substitute role at the beginning of the meeting or as soon as possible after their arrival. They must be authorised to take decisions by the nominating Region.

In addition to member representatives, Regions may send up to two observer members who will not be entitled to vote, but may speak with the permission of the Chairman.

Occasional additional representation, without voting rights, may be invited as appropriate (i.e. SE Business Portal)



6.    ACCOUNTABILTY


The ProClass Board shall be accountable to the Directors of the nine English RIEPs or any successor body.



7.    MEETINGS


The Board shall meet quarterly to conduct its business. Dates for meetings shall be set one year in advance. If there is insufficient business to be conducted, the Chairman at his /her discretion, and in consultation with colleagues, may cancel or postpone the meeting.

The Board may appoint sub-groups to undertake specific work.



8.    FUNDING


The Board shall receive any funding through the RIEPs to cover its operational work. It may apply directly to any public sector organisations for the payment of appropriate grants to support any additional studies or ‘common good’ initiatives.



9.    ALTERATIONS/AMENDMENTS TO THE TERMS OF REFERENCE


Alterations/amendments to the Terms of Reference can only be made with the agreement of the Board.



10.    STAKEHOLDER COMMUNICATIONS


The Board shall work closely with the RCE Communications Director (Seth Brook or successor)
 



Appendix A


Operational Issues


Classification and Coding – Separate Issues


The term “coding” means a reference that unambiguously identifies a specific thing.  “Classification” means a reference that groups related things together for analysis.
The LGPCG is about procurement classification, not coding.

Councils should continue to use their chosen procurement coding hierarchy (such as UNSPSC and NSV) should they feel this necessary as this supports a totally different purpose. Both these hierarchies will be mapped onto the ProClass.


Importance of Classification to Local Authorities

A standard procurement classification is essential to the delivery of the efficiency and service improvement agenda as it:

  • Supports the standardisation of management reporting, performance measurement and benchmarking
  • Facilitates the exchange and comparison of meaningful information between councils and other public sector bodies to identify new areas for collaborative working
  • Allows business managers to seek opportunities for cost reduction, supplier rationalisation and streamlined contractual arrangements
  • Underpins closer cooperation with trading partners and critical suppliers
  • Supports the planning process including the identification of areas where scarce procurement and commercial resources should be focussed for maximum benefit to the organisation
  • Provides the foundation for the successful deployment of any procurement or e-Procurement system

This message was underlined in the Efficiency in Civil Government Procurement (1998) Report (ISBN 0947819592) that said, “to be effective, collaboration and joint procurement needs full and reliable information about who is buying what, from whom, and through what means. This will entail using a common classification system”.


Classification Attributes

People do not like codes and typically regard having to code anything, particularly when they derive no benefit from the activity, as an overhead. Against this background ProClass has been designed with the following qualities to smooth its successful introduction:

  • Appropriate hierarchy – tiered or single level to suit the complexity or value of the purchase and reflect the composition of third party expenditure
  • Balance – no more than three levels
  • Extendable and easily maintainable by local government
  • Easily mapped and cross- referenced to existing coding structures, including the GL Chart of Accounts
  • User friendly – with an unambiguous reference and definition which can be used by non procurement specialists e.g. window cleaners
  • Descriptions not numbers recognising that many IT systems operate using alpha-numeric values
  • Limited Size for high level analysis only – with no more that 300 classifications to pick from including sub sets

Criterion for adding to / amending ProClass

We recognise that with experience the procurement classification will need to evolve. Changes will only be considered which meet the following pre-defined attributes:

  • Remedy a serious omission or ambiguity
  • Reflect the local government expenditure profile with most commodities being defined to one or two levels and high cost services and works being defined to two or three levels
  • Use plain language in the description with no use of codes or proprietary / supplier specific names
  • Enhance the capability of local councils to undertake comparative analysis at a macro level

Change requests that display any of the following attributes will be rejected:

  • Introduce too much detail, particularly for low value commodity items
  • Support either stock control or local organisational ICT systems only
  • Attempt to make the classification into a coding structure or make it support business and/or policy areas it was not designed to support.
  • Increase the overall number of choices to over 300
 

Adding to / amending ProClass


Any proposed changes to the procurement classification must be sent in the first instance to the nominated person in the appropriate Regional Centre of Excellence. These must be tabled to the Board at least two weeks before the meeting using the standard change request form. Any changes made to the procurement classification by the Board will result in an amended version being published within two weeks of the meeting.


Adding to / amending ProClass headings process

The wording of all agreed additions/changes will be decided by CIL using QA standardized spelling, grammar and punctuation rules that will have been agreed in advance.

The new version of ProClass will be given an identifying number.

The new version of ProClass will be circulated to each subscribing RCE representative for onward distribution within the region. It will also be put onto the ProClass web site. Appropriate changes being made to the cross-reference spreadsheets also on the web site.