Public Procurement Note

[Mariela Coxon]

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3. Social impact is often understood as the effects on people and communities that happen as a result of an action, activity, project, programme or policy. A common way to think about social impact is to consider it as the change that happens for or to people as a result of an action or activity.

4. The sustainable procurement duty in the Procurement Reform (Scotland) Act 2014 requires public bodies to consider and act on opportunities to achieve a positive social impact in their procurement activity. More information on procurement legislation is available at Annex C.

6. Early action around social impact in Scotland was achieved through the use of community benefits. The introduction of the Procurement Reform (Scotland) Act 2014 and the sustainable procurement duty has formalised broader routes through which procurement can be used as a mechanism for delivering social impact.

7. In order to create meaningful social impact from a contract, it is important to consider the social or national outcome that is to be delivered at the outset of the procurement. Using the sustainable procurement tools and supporting guidance helps procuring organisations to identify and achieve opportunities to increase social impact.

8. Meaningful social impact is realised when communities are involved in the process. As part of early engagement, the Place Principle is an enabler that helps partners and local communities unlock the National Performance Framework and make it applicable to where and how they live and work. The Place Principle is not prescriptive; rather, it actively encourages and enables local flexibility in responding to issues and circumstances in different places.

9. There are a range of drivers to encourage public bodies to be attuned to their communities and the people they serve. Engaging with communities to understand local priorities should allow public bodies to achieve targeted social outcomes through their procurement. Examples of how public procurement has been used to deliver social impact in communities are available at Annex B.

10. Fair Work focuses on the positive working practices that can be delivered through the contract, and can be used as a vehicle to provide meaningful social impact beyond the workplace, in communities and the wider economy. Statutory Guidance requires public bodies to consider how to address fair work practices in public contracts, and to support the practical application of this Fair work procurement guidance was published.

18. The Scottish Government is in favour of ensuring that there are no barriers created which may prevent the delivery of the social, economic, and environmental goals that the public body is seeking to achieve. Application of relevant and proportionate measures are central to this aim. Costs of accessing proprietary impact measurement methodologies may create a barrier to businesses.

19. The policy intention of the Procurement Reform (Scotland) Act 2014 and, more specifically, the sustainable procurement duty is to ensure social impact from public procurement is demand led and responsive to the needs of local communities across Scotland.

20. The prioritisation tool and sustainability test are designed to embed relevant and proportionate socio-economic and environmental requirements in the development of procurement frameworks and contracts. Public bodies can assess their progress in embedding sustainable procurement using the Flexible Framework self-assessment tool. These tools are freely available.

To help achieve its purpose, the framework sets out National Outcomes. The outcomes describe what Scotland wants to achieve and the kind of Scotland we want to create as a consequence of our collective actions.

Scotland was one of the first counties in the world to sign up to the Sustainable Development Goals, which have been developed to achieve a better, and more sustainable future for all. They address the global challenges we face, including those related to poverty, inequality, climate, environmental degradation, prosperity, and peace and justice. The Goals interconnect, and many of them align with the National Performance Framework and its national outcomes.

The sustainable procurement duty of the Procurement Reform (Scotland) Act 2014 requires public bodies to consider how their procurement activity can be used to contribute to social, economic and environmental well-being, with a particular focus on reducing inequality, and to act in a way to secure this. The sustainable procurement duty aligns with the National Performance Framework.

Scotland measures its performance in relation to social impact through a developed outcomes-based approach. This includes, for example, providing a summary of any community benefits that were delivered that year through procurement activity in annual procurement reports. This approach aligns with the National Performance Framework and the UN Sustainable Development Goals.

There is an expectation that there will be a positive social impact from procurement activity in Scotland. Sustainable public procurement is a key enabler of positive social, economic and environmental impact, with an emphasis on equality and reducing inequality. It contributes to the delivery of multiple National Outcomes and many of the Sustainable Development Goals. For example, identifying specific interventions, and acting on these in procurement activity, like the inclusion of community benefits, or Fair Work practices, etc. in relevant contracts.

This includes: Greenhouse gas emissions; Carbon footprint; Natural capital; Productivity; Economic growth; Income inequalities. Also links to the Environment National Outcome in the form of Energy from renewable sources; Waste generated; Marine environment & Biodiversity, and to the Communities National Outcome in the form of Perceptions of local area.

In addition to traditional considerations including spend with SMEs, the third sector and supported businesses, this includes providing local employment and training opportunities; driving local economic wellbeing through the procurement element of community wealth building and supply chain development programmes; enabling innovation; and addressing and tackling the climate emergency which is integral to an inclusive and sustainable economy.

Public procurement can contribute to this national outcome through the inclusion of fair work practices and delivering community initiatives aimed at regeneration of disadvantaged communities. For example, transferrable qualifications, work experience and community engagement.

Public procurement can frequently contribute to this national outcome through the use of community benefits to achieve transferrable qualifications; work experience and related interventions such as mock interviews etc.

This includes: Employees on the living wage; Pay gap; Contractually secure work; Employee voice & Gender balance in organisations. Also links to the Education National Outcome in the form of Skills under-utilisation, and the Health National Outcome in the form of Work related ill health.

This means a contractor demonstrating, in performing a public contract: appropriate channels for an effective voice for staff, such as trade union recognition; investment in workforce development; no inappropriate use of zero hours contracts; action to tackle the gender pay gap and create a more diverse and inclusive workplace; and, fair pay, for example payment of the real Living Wage.

For example, the NHS has a general duty to improve the health of the population of Scotland, requirements that seek to improve employment opportunities for the population at risk of ill health (including: young people; those with a disability; and long-term unemployed) are likely to be relevant to them.

Through their work on this project, Transport Scotland have already exceeded the target of creating 30 new jobs over the project duration, and are working to ensure that the majority of the opportunities created by this project are filled by workers from the local area. At the end of March 2020, 99% of project spend has been on subcontracts within Scotland and 64% of this figure has been with SMEs.

This project is being delivered with an unprecedented focus on community benefits and a commitment to bring meaningful and measurable change to the surrounding communities, including: 4,000 pupils and students engaged; seven work placements for secondary school pupils; two foundation apprentices; 44 new jobs created and four jobs created through Fairstart and six placements for people with a conviction. .

Wheatley actively promote the inclusion of community benefits for all regulated procurements with the estimated annual threshold values of > 2 million for works contracts (predominantly new build/development), and > 500k for goods / services contracts (ranging from provision of fleet and uniforms to legal and electrical services). Where appropriate and feasible, they consider their inclusion for all relevant procurements.

Wheatley is supported by their Charitable Trust, the Wheatley Foundation which supports a range of community and economic programmes and increases access to opportunities across Wheatley neighbourhoods, many of which experience multiple disadvantage and deprivation. A dedicated Community Benefit Officer role sits within the Foundation Team, liaising with stakeholders and monitoring deliverables and performance.

Community Support: Support for financial inclusion programmes and recreation, community, environmental, arts and sports events and activities; work with local schools, nurseries and voluntary / tenants groups.

Capacity Building/Supply Chain Development: Provision/donation of contractor time, skills or services, mentoring or training support; input to events; materials, equipment, goods or expertise which supports Wheatley customers, SME or third sector supply chain, relevant community groups or organisations.

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