Twitter

Future City Game

CLES Newsletter

Use buying power to help your local area

8 Mar 2010

The MJ, 4th March 2010

Using the public sector's £175bn procurement power effectively can yield huge benefits for local economies, claims Mark Bramah

Gone are the days when spending local government cash was just about getting goods and services for the lowest-possible price.

A more sophisticated understanding that true cost-effectiveness and value is not the same as mere 'cheapness' has, hopefully, now been developed.

The Association of Public Service Excellence's lat­est research, in partnership with the Centre for Local Economic Strategies (CLES), looks at how councils can use their spending power to make local econo­mies more resilient, their communities more sus­tainable, and minimise environmental impacts.

More bang for the public buck: A guide for using pro­curement to achieve community benefits considers the barriers preventing councils getting the most from their procurement.

It draws on practical examples of measures au­thorities across the UK are using to overcome ob­stacles, and includes a checklist to help formulate a strategic approach to delivering better benefits from spending. A number of lessons emerge.

First, using sustainable procurement to achieve community benefits must not just be a concern for procurement officers or lawyers. The most senior managers, councillors and heads of department, as well as those responsible for procurement, all have to do their bit to embed consideration of wider eco­nomic, social and environmental value into all con­tracts which are being let.

Second, local authorities can no longer hide be­hind European Union regulations as an excuse or as a delay in delivering community benefits when they procure goods and services. Of course, it is necessary to stay within the confines of EU law, and no- one is suggesting otherwise.

Our guide summarises legal considerations which must be adhered to. But case studies show councils that are less risk-averse are able to boost economies, supply chains, employment, skills and training lo­cally, and still remain within the law.

And third, attitude is the most important factor in achieving community benefits. Our research found that deeply-ingrained culture was a more significant obstacle than national policy or European law.

It is not easy to change ingrained perceptions, but the good news is that this cultural shift is within the control of local government, rather than external agencies.

A flexible procurement process is essential.

The authorities which have had the most success achieving community benefits are those that have re­thought their entire approach.

Our guide, being launched at the Conservative Councillors' Association conference in London on 5 March, is full of examples from councils breaking new procurement ground.

Glasgow City Council, for one, has embraced the use of community benefit clauses within contracts to promote local employment and training opportuni­ties as part of its £4^bn investment in regeneration, prior to hosting the Commonwealth Games in 2014. Engagement with local suppliers, capacity-build­ing, advertising locally through a procurement por­tal, contract unbundling, staff training, reviewing procurement processes from tendering to contract management and use of community benefit clauses in contracts are all measures which can achieve the 'triple bottom line' of greater economic, social and environmental value.

But these need to be implemented within a holis­tic strategy that ties in with wider council objectives. As public sector resources are squeezed, there is a growing need to achieve ever-greater value for every pound.

Sustainable procurement does not have to cost more than standard delivery of contracts, yet it is far more meaningful to consider value in terms of whole-life costs and better social, economic and en­vironmental outcomes than simply initial outlay.

APSE's previous work with CLES, analysing the 'local economic footprint', shows a multiplier of £1 of public spending can generate £1.64 in the local economy through local employment and supply chains. If councils achieved community benefits through their procurement, that figure could rise to £2.

Using sustainable procurement can make local economies more resilient, but requires a mindset rather then just a set of procedures. It requires a creative innovative 'can do' culture.

This is not just about procurement. It involves strategic approaches to procurement that link in with broad-ranging local government policy. It needs buy-in at the most senior leadership level. But the results are worth it.

Mark Bramah is assistant chief executive at APSE. For copies of More bang for the public buck: A guide to using procurement to achieve community benefits, 120 for APSE member authorities and bio for non­members, e-mail: mbaines@apse.org.uk

Example of procurement savings:

• Staffordshire CC has made a raft of changes to its procurement process, including a tender toolkit for local suppliers; e-tendering for low- value contracts; pre-tender workshops; and lengthening and unbundling contracts. This restructure has generated an estimated from of savings since 2004, and a total of 36% of procurement spend is now within the local area.
• When its £3m food supply contract came up for renewal, Northumberland CC took several measures to ensure community benefits were yielded, and four of the seven lots were taken up by small businesses able to supply fresh, local produce.
• South Gloucestershire Council restructured the way in which it engages with its supply chain and tenders for contracts, which has enabled the authority to effectively consider cost, quality and also community benefits in tender criteria.

CLES Commendations 2010

Local Economic Assessment Network

Wellbeing Evaluation

Norwich LEGI

HCA Placemaking Practice Review Panel