NEWS ANALYSIS: Councils' PR spending under scrutiny

The furore last week over Tower Hamlets' PR agency spend has thrown the media spotlight on the use of external consultancies by local authorities. Sarah Robertson seeks advice on procurement practice.

Local authorities are increasingly buying in support from PR agencies. This is perhaps not surprising, given councils’ increasing statutory responsibilities in informing and consulting the public.

But the London Borough of Tower Hamlets Council discovered the disadvantage of this strategy last week when the Conservative opposition to the council’s Labour leadership claimed that its PR department had allowed its spend with Verve Communications to quadruple from the original amount for which the agency had been commissioned (PRWeek, 20 April).

An internal investigation has concluded that, although correct procedures have been followed, the use of consultancies must be monitored more carefully in the future.

But the incident has raised the issue of the extent to which it is effective – or politically dangerous – for councils to bring in external agency support. Senior sources from council PR teams report that it is not unusual for a council to extend an agency’s contract.

Neither is it unusual to part with large sums of cash if the brief requires an ­interim team, according to senior industry sources. The key, though, is ­retaining control over the spending.

Industry pundits point to a disgruntled former PRO at Tower Hamlets as the source of last week’s furore. Yet the question remains how the council managed to spend £900,000, nearly four times the amount originally intended.

Gez Sagar, former head of interim at Geronimo Communications, says: ‘Lessons should be learned from the Tower Hamlets case in terms of council management having a clear timetabled strategy for the contents of the brief.’

Quarterly reviews of a contract are advisable to help monitor spending, adds Grant Riches Communications Consultants director Carol Grant. ‘The clearer the brief the more likely it is to be successful.’

Local authorities must obey two sets of rules when procuring services. One set is its own, which varies from council to council, and the other is the Euro­pean procurement directives set by the European Commission, according to the Improvement and Development Agency guidance.

However, council officers are not obliged to go through their central procurement departments when buying PR services, says a senior local autho­rity procurement specialist. This is the kind of loophole that could allow overspending to occur.

Tower Hamlets’ PR department would not comment. But PRWeek asked communication chiefs at three councils how they seek to avoid similar spending controversies (see below).

Glasgow City Council

Edgar

Colin Edgar, head of comms, Glasgow City Council: We assign responsibility for council departments to named PROs. The fact that they can spend months and years building a relationship with service directors and staff makes it easier for them to find stories in their department and deal with any issues that come up.

If we outsourced all the PR, I would be nervous that we would not be able to sustain that closeness of relationship.

However, if we have a short-term need for capacity, then a good knowledge of which agencies can step in and pick up the slack is invaluable.

We have a corporate procurement unit which manages the process for us. Essentially, if a contract is worth less than £20,000 we will seek three submissions and choose between them. For more than £20,000 but less than £60,000, we will seek tenders through press and online advertising, select a shortlist and then hold a competitive pitch.

This kind of centralised procurement works well as long as the process is able to accommodate selection based on a combination of quality and price where quality is a large part of the criteria.

You need to ensure that only a small number of people are able to instruct the agency to act in a way which will incur cost.

London Borough of Barking and Dagenham Council

Duncan Stroud, group manager, marketing and comms, London Borough of Barking and Dagenham Council: The first priority is to agree exactly the contribution the consultancy is going to make. Unless both sides agree this from the outset, there is a real danger that you won’t get the best from them. But be prepared to be flexible.

The main advantage of a consultancy is that you are getting highly professional advice based on a wide range of expe­rience and they are likely to bring new ideas as to how to solve your problem. You want to tap into this, so you should give careful consideration to alternative proposals as to how the work should be carried out, even though your final goal should remain clear. It is important to monitor their work closely, and if there is a problem to say so straight away. The other two issues apart from purpose are cost and length of contract. Unless all three elements are actively monitored there is a danger of the contract drifting on.

Hopefully, by working with the consultancy you will learn a lot of new ideas and approaches to handling an issue. So after the contract has ended, you can keep using the knowledge you have gained in other areas of your work.

Suffolk County Council

Francis Thomas, head of comms, Suffolk County Council: There are all sorts of reasons why people use PR consultancies. The typical one is capacity; the other reason is the need for specialist knowledge. For example, there is a lot going on in terms of how to solve the waste problem in the UK.

You don’t always have time to grow the expertise. Plus, consultancies tend to be used on subjects that require long-term planning and are highly emotive.

When you are managing the public purse, you first have to ask whether you can handle it in-house – or if you can develop the expertise. If not, then you look to the open market. Having dealt with the Suffolk murders and the bird flu outbreak, our in-house media team has grown its expertise in crisis management, but I would not rule out consultancies.

We always run any contract through our central procurement department.The use of such a department is an asset to the way councils manage the public purse.

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