The Joseph Rowntree Foundation have joined forces with Anthony Collins Solicitors LLP to make the case for using public procurement to address poverty and social mobility; and more importantly to demonstrate how public procurement for services and indeed goods can include wider social objectives in selection criteria.
At a time of increasing poverty, especially in work poverty, long-term youth unemployment and the need to make every pound spent by the public sector maximise its contribution, I suggest that this is a timely and worthy report.
The report which is available at http://www.jrf.org.uk/publications/tackling-poverty-procurement uses case studies to show how contracted public service providers including construction companies can be required and incentivised to target their recruitment, adopt apprenticeship schemes and offer staff training and development opportunities. All this is possible and indeed, it could be argued is encouraged, by the EU procurement and social regulations.
The report author, Richard MacFarlane argues that tackling poverty through employment is an essential element of the UK’s sustainable development framework and that every public contracting authority needs to consider this as a part of their contract conditions; and that this needs to be core to sustainable procurement.
The case studies (which include Glasgow Housing Association, Birmingham City Council, Knowsley Borough Council, NHS Greater Glasgow and Clyde, United Welsh Housing Association and Derry City Council) show that contracted companies have found this approach beneficial and attractive too.
All too often, public sector procurement officials and their legal colleagues argue that it is not wise or even lawful to include social objectives in their public procurement programmes. The report states that such advice is wrong provided that the procurement does not discriminate against any bidder based anywhere in the EU and that any requirements are applied to all bidders.
The Best Value Social Value Act should have raised the awareness of these opportunities and possibilities across the UK public sector but sadly, in my experience, this is still rare and in practice, too many public agencies base too much of their selection on price over all other factors. There is too little consideration of wider concerns and opportunities, and indeed overall costs to the public purse- if costs are born by another budget holder they are still costs even if they are on some other department’s or agency’s account.
Value for the public sector and public services has to be about more than price and monetary cost.
If I have concerns with a report that I still suggest should be widely read and adopted across the public sector, these are that it ‘may’ be interpreted as encouraging placements of staff and potential staff where there is no or very low remuneration. I have always argued that all staff, including those who have been long term unemployed and those with special needs or who require significant training, should be appropriately paid.
Many public bodies of all political persuasions are requiring their suppliers to pay the Living Wage. This is to be encouraged and should be extended to all public sector contracts. Not only is employment important well rewarded employment is to be encouraged.
When reading this report I was reminded of an earlier JRF / CLES report which made the case for using public procurement to support local growth objectives. These two reports complement each other.
For local government they both provide some practical actions to enable local authorities to deliver on their wider leadership of place responsibilities to secure sustainable community well-being, as well as actions which they can press their local public sector partners and local businesses to adopt also.
Unsurprisingly the report identifies the need for bold and focused leadership at the highest levels in those organisations that are going to maximise social and wider benefits from their procurement expenditure.
Leaders and procurement specialists across the public sector should read the report and act accordingly.