Scotland the brave or the bureaucratic when it comes to public procurement?

When I met Alastair Merrill (public procurement supremo for Scotland) at the recent Supply Management Awards dinner, he gave me a hard time about an overly London and England focus here when we write about the public sector. And of course he’s right , although the accusation hurts to someone who was born (in Sunderland) precisely 150 miles closer to Edinburgh than London.  So let’s start to remedy that.

The big news of course is that the Public Procurement Reform bill was published in Scotland recently.  It allows more factors around social value and policy goals to be incorporated into the procurement process. As the BBC said:

“Guidance under the bill would allow public sector bosses to consider the inappropriateness of awarding contracts to companies using controversial zero-hours contracts, which allow employers to hire staff with no guarantee of work.  Public sector bosses could also consider, when deciding on a contract award, whether firms use blacklisting. The issue of blacklisting has angered unions and politicians, following disclosures about a UK-wide database of names used by major construction firms to vet workers”.

However, some legal experts have warned that this will put yet more pressure on stressed out procurement staff. Jamie McRorie of Pinsent Mason said that the proposals would create new challenges for procuring authorities.

"One of the key challenges faced by those engaged in public sector purchasing is procuring in a way which also delivers social, community or environmental benefits," he said.

"The Bill proposes that contracting authorities will now have a 'sustainable procurement duty'; meaning that they must consider how their procurement can benefit the social, economic or environmental wellbeing of that area, or how that procurement would benefit SMEs or support innovation. This is a potentially far-reaching duty and, given that it is enforceable in the courts, will have to be one that all procurement practitioners need to be aware of".

So is this a sensible way of using public procurement spend to drive worthwhile policy objectives, through use of “community benefit” evaluation factors and a focus on the wider gains from that expenditure? Or is it just a bureaucratic box-ticking burden for public bodies and bidders, that will end up with suppliers paying lip-service to the principles?  It’s a tough one, and I can see both sides of the argument.

But what is clear and fascinating is how different this approach is to that being taken in England by the Cabinet Office and Francis Maude, their Minister. Maude is actually becoming more open in terms of his views that cost savings are pretty much everything in terms of public procurement goals.  At the recent Public Administration Select Committee, he was pretty overt about that – he doesn’t believe in these extraneous “policy through procurement” initiatives.

But in Scotland, there is clearly a view that these things do matter and that public spend can have positive effects on the economy and society beyond the obvious value of money issue. So in part 2, we’ll feature our recent chat with Merrill, to get his views on this apparent philosophical clash between England and Scotland.

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Voices (5)

  1. Gill Joy:

    I’ve recently completed a tender with a client for a Scottish contracting authority where the successful tenderer is required to pay a “Trainee Deposit” of £65 per new entrant trainee week committed in the tender. The authority holds the money and pays it back with interest at the end of the contract IF you have successfully delivered the promised number of trainee weeks. Interesting approach to making sure tenderers deliver on their community benefit commitments.

  2. Trevor Black:

    As I work across the whole UK I can say with authority that Scotland is light years ahead in supporting the public sector than the muddle we have in England. Just take a look at their website – full of practical guidance and supporting information. What does the Cabinet Office offer? It used to provide a good service when it was Buying Solutions but that appears to have been lost in the perpetual re-structuring and hand wringing. As for cost savings I’m afraid Frances Maude needs to get a reality check; having worked in the public sector I don’t believe any figures put out into the public domain. They are politically driven, contrived and without substance. If we could hear more about cost avoidance then perhaps I would be a little more convinced.

  3. Phoenix:

    Nevertheless, the fact remains that Scottish public procurement is better organised, better resouirced, has a stronger mandate and enjoys a more committed and positive political backing than ours in England does. Scotland is in a far better position to wield public procurement as a tool to help achieve policy goals. Personally, I salute them.

  4. Dan:

    Using social benefit clauses has always been possible, but the execution has always been more problematic. Whatever regulations Scotland (or for that matter the UK) passes, it cannot conflict with the EU principles of non-discrimination, proportionality and relevance

    (EU law always ‘trumps’ domestic law).

    For example, recruitment of local unemployed people is a no-no, as it potentially discriminates in favour of local companies.

    Another example, asking your stationary provider to do all it can to benefit the local community. Its disproportionately large, and is arguably irrelevant to the subject matter of the contract.

    None of these are insurmountable, but they’re being left up to procurement staff who are already overburdened and who don’t have a clue what the local community wants because that consultation isn’t part of their job. The people who could do it don’t because its part of the procurement process. It always just becomes a box-ticking exercise.

  5. Dave Sheldon:

    I believe that the monitoring of these “community benefits” is going to become a big issue. If a tender wins because it has better “community benefits” than another bid then the Contracting Authority had better make sure that the supplier delivers those benefits otherwise they could be open to challenge for a significant change during the contract from the unsuccessful bidders.

    While this may be relatively easy, but still a pain, to monitor if the benefit is specific, “taking on X apprentices” it will be significantly more difficult to prove successful delivery if the benefit is more outcome based, “improve the lives of those in the community”.

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