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SCHOOL CONTRACTS – A


Over the last few months since lockdown started, we have worked tirelessly behind the scenes, sending out mail shots to local authorities nationwide looking for updates, their approaches to the future with regard to social distancing, to payments and contract provisions, and to how they intend to cater for “the new normal” and any other information they could provide us with in order for us to be able to keep you up to date.


THIS MONTH HAS BEEN NO DIFFERENT --- OR HAS IT? Yes, very much so, and it must be said --- not for the better!! We have seen reports from around the UK of the drastic changes that have beenmade by local authorities across the board, not to protect our industry, but to make sure that steps are put in place to protect themselves from having to pay out for contract runs if anything like this should ever come about again!!


WHERE DO WE BEGIN? Aberdeenshire City Council sent out an amended contract at 4:05pm on the 10th of June, expecting……no……demanding that the amended contractmust be signed by 12:00 noon on the 15th of June at the risk of the contracts being terminated if the response was not received on time. Before we go into any kind of detail on the contract itself, let’s look at the date: end of business on Wednesday the 10th, demand contract signing by noon on the following Monday….just two working days to assess a huge new con- tract and assess its impact! Talk about trying to rush people into signing without reading!!! Sowhatwas in this variation to contract?Whatwere the risks?


Reasons for the variation


The object is allegedly to future proof the contract in case a “similar event” occurs. Yet the variation itself says that the variation is “due to Covid-19 Pandemic” but then makes no further mention of it. The view is that the council will immediately suspend the contract due to the Covid-19 pandemic despite under the guise of “similar events”.


Variation Timescales


If the service is suspended, the council can require you to re-start work by giving you five days’ advance notice. If after 12 weeks of suspension you want to terminate the contract, you need to give the council 14 days’ advance notice. But even if you serve a notice of termination, the council seems to be able to serve a counter-notice giving you five days to restart the service. We can and you can’t stop us, we will allow you to “think you can stop us” but then we can pull you back in anyway.


Notice of Suspension


The Council can suspend the services by serving a notice. No justi- fication or reason required, nor any advance notice of the suspension. This is completely contrary to the covering email which explains that the Council need this power to deal with “similar events” to the Covid-19 pandemic.


Commercial Terms


The commercial terms are disgraceful. Amere 20% payment for the first two weeks, followed by a total loss for the next 12 weeks.


38


Council’s powers to terminate the contract


Clause 27.4: “the Council has the power to terminate the con- tract “for convenience”. Sign the variation or the council will issue a notice of termination.


Good faith


There is generally an obligation for parties to act in good faith in a contract, particularly long-term contracts such as five years. How are the councils fulfilling that obligation here?


Overall


Suppliers are clearly being bullied into signing the variation, which is misrepresentation in its clearest form. At the very least, the council’s powers to suspend should be based on a pandemic rather than “no reason” and there should be a minimum notice period before the suspension takes place. All of this transpired (or should it be concocted) whilst they laid up their own in-house drivers, on full pay, all 80 of them. We are really happy to be able to announce that this was picked up on and checked out thoroughly before any signatures or agreements were made. Solicitors were consulted, councillors lobbied, and some changes were made, thanks to the efforts and awareness of the operators within the region, although to quote directly : “ It’s a wearing process when you have to double check everything that comes over your desk from them.”


What about the others then?


We have heard from drivers all around the UK, in varying degrees of concern, worry, outright fear for their futures. One driver reported that “With schools opening on Monday, our local authority has cancelled all school contract work. Cannot conform to Government guidance on social distancing. They have told the parents to take their children to school.” Immediately our ears pricked up (ok, maybe eyes --- how do they prick up?? ---don’t know but seriously.... WHAT?) Of course we needed more information, as did everyone else who saw this comment, this cannot be true? Right?


Which council, which district?


Wrexham in North Wales have apparently cancelled the minibus contracts.


How? With immediate effect, simply notified by email.


Why? First knee jerk response would be “because they can”; in reality, probably based on the sheer increase in costs to provide the additional vehicles required!


What happened to the government guidance PPN 02/20 which was supposed to look after and protect contract providers to ensure they were able to return to providing the service once schools started to reopen? Click link below:


shorturl.at/bchzR hich states clearly…


“This Procurement Policy Note (PPN) sets out information and guidance for public bodies on payment of their suppliers to ensure service continuity during and after the current coron- avirus (COVID-19) outbreak.”


JULY 2020


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