Posted in: General News
Colin Cram, The Guardian.
With red lights flashing on the global economy, England must look to Scotland’s sustainable way of buying goods and services.
At £178bn a year UK public procurement – what the government spends on goods and services – represents the greatest opportunity there is for investment in UK economic development. David Cameron’s article in the Guardian about global threats to the UK economy should be a wake-up call to take advantage of this opportunity.
Scotland gets it. At a recent conference for Scottish procurement specialists, John Swinney, cabinet secretary for finance, employment and sustainable growth in the Scottish government, said public procurement “can support and encourage social, economic and environmental priorities of government”. The importance the Scottish government attaches to public procurement was illustrated by a turnout of more than 500 procurement personnel. No UK government and English public procurement events attract that level of interest, despite a combined procurement spend 17 times greater.
The current UK government has made more progress than any of its predecessors on the effective management of its £178bn procurement spend. Cabinet Office minister Francis Maude should take much of the credit for this. The creation of the Crown Commercial Service and the Major Projects Authority were big steps forward. There have been more initiatives than ever to support social and economic growth through, for example, increasing the amount of central government business with small and medium sized businesses. The Ministry of Justice is putting much emphasis on social objectives such as rehabilitation into some of its new contracts.
And local government is playing its part. The Social Value Act requires social considerations to be taken into account in local government contracting. There is a postcode lottery: some councils just pay lip service, but others such as Halton borough council successfully focus on creating local employment through their contracts.
But all this does not amount to a strategy for delivering the UK government’s economic, social and environmental priorities.
The approach of the Scottish government is much more akin to a strategy and includes some interesting initiatives. The new Scotrail franchise and the government catering contract expect suppliers to pay their employees a living wage. Suppliers are given to understand that a well motivated workforce is likely to deliver better contracts. Some 99% of the public sector is signed up to the national electricity contract – 100% renewable energy. NHS Scotland has been persuaded to buy some of its uniforms from sheltered workshops. Yes, prices are 7% higher than from factories in south China, but the overall benefits make it worthwhile. By comparison, the closure of the Remploy workshops in England has left many disabled people unemployed.
Public procurement in Scotland is just £10bn, but it has created 3,500 apprenticeships and training positions, testament to the capability and drive of Alastair Merrill, the procurement and commercial director. Also, because 60% of procurement spend goes through a national purchasing system, there is a better understanding of where the money goes. This is essential for good economic planning.
So, what needs to happen? First, the UK government needs to articulate clearly its economic, social and environmental priorities. Next, it needs to align procurement priorities with them. Thirdly, it needs to work with the various parts of the UK public sector to develop a meaningful procurement strategy to deliver those priorities. Such a strategy would include initiatives already underway, but much more needs to be done. The chancellor’s autumn statement at the end of November provides an opportunity to announce such a strategy.