“Sexing up” procurement to realise its potential as a change agent
12th May 2015
Sex and procurement are unfamiliar bedfellows. They come together though, in the realisation that if procurement (basically, ‘buying stuff’) is to realise its potential as a change agent, it needs some 'sexing up'.
That potential becomes apparent when you realise the scale of procurement ordinarily taking place. Bristol City Council, for example, spends around £4,000,000,000 each year. In doing so, it has to comply with regulations that originate in the EU. Recently, there has been a growing recognition that the impact of spending such sums reaches far beyond negotiating a keen price. Both the UK’s own Social Value Act and the Public Procurement Regulations 2015, which are the UK version of the latest EU rules, make explicit the ability for public authorities to take social and environmental considerations into account in choosing suppliers. Provided they relate to the subject matter of the contract, matters ranging from the impact of contract delivery on local employment prospects, to the environmental impact of the production, transportation, usage and disposal of goods, to the quality of the services being provided may all be taken into account.
The sexing up part comes because, as many local businesses have found, the possibility of procurement taking place on this basis does not mean it will happen. The legislation is permissive, meaning that whilst it allows this to happen, it does not require it. It demands fairly sophisticated processes to be adopted by public authorities to make it happen effectively. Ideally, the commissioners within an authority will actively engage with potential providers and service users to understand what the need is and the possible means of meeting it long before the formal procurement process commences (or the current contract expires). The commissioners then need to construct a procurement process and a contract, working with financial and legal colleagues to ensure they get what they want in a manner that fits within financial constraints and compliance requirements. The social and environmental aspects need to be identified early on and embedded in the process. They cannot be an after-thought if they are to be meaningful.
To do this really well involves strategic direction, collaboration among colleagues, effective market engagement and a degree of innovation and creativity. However, the context in which these are called for is one where staffing levels have been slashed, budgets are under strain and few have the luxury for such intensive activities – even if that investment may be rewarded over time.
This is where leadership becomes critical. There are examples around the country of local authorities (such as Croydon, Liverpool and Birmingham) who have seen the strategic benefit in looking at the overall impact of their spending decisions and considering whether a cheap contract here and now ends up costing it a lot more in the long run. These councils have adopted policies which make explicit their intention to take social and environmental impact into account wherever appropriate. The policies frame the procurements that those councils then embark on, with their suppliers able to anticipate and prepare for what will be asked of them. The councils too need to invest in their staff to convert the aspirations of the policy into valuable improvements in the overall impact of their contracting. Encouragingly, Bristol City Council has embarked on the first stage of this process, with a draft policy due for ratification in the coming months.
It is important not to regard procurement as something that is only relevant to local authorities, or even to the public sector. In addition to Bristol City Council and their budget, there are all the local NHS bodies, the Universities, housing associations and agencies of central government all spending money in the local economy and all able to consider social and environmental issues in determining who to contract with.
Nor does it stop there. Private businesses obviously buy stuff too. Whilst they are not constrained by the public procurement regulations, some who deal with public bodies are becoming mindful of these issues and see engagement with charities and social enterprises as part of their supply chains as one way of demonstrating social value. Others act similarly, sometimes through a corporate social responsibility lens, even if they are not dealing with the public sector.
There is also, of course, a sizeable number of charities and social enterprises themselves who you might think would be sensitive to using other organisations with a focus on social mission rather than profit maximisation. However, for similar reasons to those cited by the public authorities (i.e. that they are too stretched to engage with it seriously), often they too do not take social and environmental impact into consideration as much in their procurement decisions as one might expect. One attempt to address this has been the Buy Social campaign run by SEUK to publicise such organisations and make it easier for buyers to find them.
Then there are our own 'procurement decisions' as individuals. That may not be how we think of them, but when we buy stuff, that is our own 'personal procurement exercise' and we too may consider social and environmental impact. We are blessed to have a vibrant economy in Bristol with plenty of local and / or ethical independent businesses to source from. Even here though, the ingrained habits of thinking first about price and convenience mean a 'sexing up' exercise may be necessary. Here the Bristol Pound comes into its own: whether it is spending by text, or by using notes designed by fellow Bristolians depicting the city, it is a distinct experience dealing in this way with local businesses who get to know you by name and who share with you a commitment to supporting other local independent businesses.
Spending decisions have social, environmental and economic consequences. If you are a social business, this is an opportunity for you to grow your market. However, it will not happen by waiting for legislation to bring it about. You need to show the social and environmental benefits trading with you brings (whether that be rehabilitating offenders or reducing emissions) making your offer irresistible. Or, if you will, sexy.
David Hunter, a solicitor working for Bates Wells Braithwaite LLP and is a Director of Bristol Green Capital Partnership CIC, The Community Farm and Bristol Pound CIC. He is also sits on the Joseph Rowntree Charitable Trust Sustainable Future funding committee.