Procurement Bill: Stage 1 Debate

Summary

• This Bill fails to address how procurement can be used to benefit people and communities across Scotland. This purpose should be in the Bill.
• Without changes, the opportunity of this Bill to truly imbed sustainable procurement into contracting culture will be lost.
• Guidance due to run alongside the Bill will not be sufficient, statutory or not.
• The Bill should seek to advance the four principles from the Christie Commission; the Bill falls someway short of this in its current state.
• The Bill should create a differentiated approach to procurement between “Classic” procurement (buying of things) and “Service” procurement (buying services for people), beyond that promised for health and social care contracts.
• The Bill should include a requirement that all contracting authorities stipulate payment of the Scottish Living Wage as a condition for the performance of the contract – this should not be left to guidance or to individual contracting authorities to decide whether to incorporate or not.
• Monitoring adherence to and reporting on sustainable procurement must now come under Audit Scotland’s remit to ensure that the duties are taken seriously by contracting authorities.
• We would urge that any statutory guidance accompanying the Bill is as strong and extensive as possible, and that the headline elements of this guidance are put on the face of the Bill.

Our comments

As we have said in previous evidence this Bill has a fundamental flaw:  it fails to address how procurement can be used to benefit people and communities across Scotland.  The purpose of procurement by public authorities should be to use their buying power to first of all promote positive social outcomes (such as reducing inequalities through the promotion of strong local economies and local job creation), which in turn will lead to a sustainable economy for Scotland. This purpose should be in the Bill. We support the ten asks submitted in evidence to the Committee at Stage 1 from a cross-section of civil society organisations.  In addition, we take this opportunity to make the following points: Maximising social impact:  To date, local authorities have been spending £9 billion in isolation. As many third sector organisations demonstrate, this £9 billion could be used as a powerful economic lever to promote social and environmental change in business practice and create sustainable change to tackle some of Scotland’s most deep rooted problems.  Unfortunately, we do not see real provision for this in the Bill. Moving to person-centred procurement:  The Bill would be strengthened if we create a differentiated approach to procurement practices between “Classic” procurement (buying of things) and “Service” procurement (buying services for people).  Whilst we welcome proposals for amendments at Stage 2 in relation to health and social care contracts, we would like to see a broader commitment to distinguishing between ‘Classic’ and ‘Service’ procurement. Advancing public service reform:  The Bill should seek to advance the four principles from the Christie Commission; the Bill falls someway short of this in its current state.  The user must be at the heart of public services, and this Bill should incorporate that aim. Promoting the Living Wage:  A Living Wage requirement would ensure that thousands more people every year would be paid a decent wage and work out of poverty.  The Bill should include a requirement that all contracting authorities stipulate payment of the Scottish Living Wage as a condition for the performance of the contract – this should not be left to guidance or to individual contracting authorities to decide whether to incorporate or not.  Whilst this will increase the cost of contracts, it will provide wider social and economic benefits to communities and employees. Practical concerns – the role of guidance and reporting:  The Committee’s report highlights many concerns relating to guidance and reporting, including that the success of increased sustainable procurement and community benefit will depend heavily upon the strategy of contracting authorities.  Without changes, the opportunity of this Bill to truly imbed sustainable procurement into contracting culture will be lost. Guidance may not be sufficient, statutory or not.  As is noted in paragraph 75 of the Committee’s report, the taking back of savings generated in the delivery of a contract contravenes current guidance, and yet this practice occurs regularly.  If there is nothing on the face of the Bill that properly defines and provides an obligation to take into account sustainable procurement, then the Bill could fail in its attempt to make procurement in Scotland truly sustainable.  Guidance must be as strong and extensive as possible, and the headline elements of this guidance should be put on the face of the Bill.  According to the considered opinion of the Committee, the success of sustainable procurement and community benefit within the Bill lies mainly with the contracting authority’s own procurement strategy and annual reporting.  Monitoring adherence to and reporting on sustainable procurement must now come under Audit Scotland’s remit to ensure that the duties are taken seriously by contracting authorities, as alluded to by the Accounts Commission and Auditor General in their evidence to the Committee.  Annual reports must include the provision to report on community benefit requirements used and detail the community benefits achieved.  As the Committee points out, “monitoring of this type of contract is of substantial importance that is unlikely to lessen and, as such, a provision requiring this to be undertaken should be included on the face of the Bill”.  

Conclusion

The Bill as it currently stands does not meet the vision originally intended. Without significant change, the Bill will not bring sustainable, people-centered procurement to Scotland, and will fail to bring the significant economic, social and environmental benefits to communities across Scotland that it could.