Sustainable Procurement:The National, Regional & Local Context

SPOB Forum

Thursday 8 November 2007

London

David Wright

NE Centre of Excellence

0191 433 2230

davidwright@gateshead.gov.uk

Sustainable Procurement

“…is a process whereby organisations meet their needs for goods, services, works and utilities in a way that achieves value for money on a whole life basis in terms of generating benefits not only to the organisation, but also to society and the economy, whilst minimising damage to the environment.”

English LA Spend£42 bn

Sustainable Procurement Potential

• LAA’s, LSP’s and LEGI’s• Community Benefits & Enhancing Wellbeing• Collaboration, Partnership & ‘Use of Resources’• Health’s ‘Corporate Citizen’ agenda• Business Sector’s Corporate Social Responsibility• Economic, Regeneration & Sustainability strategies• Social Cohesion, Equality & Diversity• 3rd sector public service delivery• Environmental, Spatial and Rural strategies• Waste strategies• Health Improvement strategies• Public Sector Food Procurement Initiative

Integrating sustainable development into performance management processes will:

• Help the authority to deliver its duty to progress environmental, social and economic well-being

• Help the authority achieve an excellent CPA assessment. • Help the authority assess and manage risks more effectively. • Help the authority progress joined up service delivery • Help the authority deliver value for money and efficiency

improvements. • Help the authority improve partnership working.• Help the authority to deliver the Government’s SD strategy

‘Securing the future’ and the CLGs Sustainable Communities agenda.

Financing Local Futures - CIPFA, LGA, IDeA, SDC

Harnessing Participants

• Public Sector – policy, strategy, service, procurers & scrutiny

• Professional organisations• GO’s, Government departments and agencies• RDA’s• Environment Agency• Procurement Consortia• Business Sectors & 3rd Sector• Business Support Sector• IDeA• Audit Commission• Academia• RCE’s

Expectations

A corporate, strategic and partnership issue• Local Government White Paper

– Local Strategic Partnerships & LAAs

– Sustainable Community Strategies

• Health Sector Corporate Citizenship

• Business Sector - Corporate Social Responsibility

• UK Government Sustainable Procurement Action Plan – March 2007

• Local Government Sustainable Procurement Action Plan – 2007

• Health Sector Sustainable Procurement Action Plan - 2007

• National Procurement Strategy for Local Government - 2003

• National Audit Office – September 2005

• Audit Commission Sustainable Development Approach – July 2007

• Audit Commission Use of Resources 2008 – August 2007.

Top 30 spend categories for all council spend

The challenge for the public sector

Barriers

Perceived:• Too expensive / poor VFM• Against EU procurement

directives

Solutions• Whole life costing• Economies of scale reduce

prices & raise standards• Tools, training & awareness

Genuine:• Fragmented procurement

– Poor governance– Duplication of contracting

effort– Suppliers divide and conquer– Under-resourced supply

teams

• Lack of SP leadership

• Promote collaborative procurement & spend hierarchy– Reduces duplication

– Introduces best practice category management

– Frees up local resource

Source – Forum for the Future

Evidence from ‘early adopters’• Commitment from the top and to sustainability generally.• Corporate approach related to LA’s priorities and engaging range of services.• Lead by example• Use the SPTF Flexible Framework• Plan, prioritise and set targets• Be imaginative• Build interest, capacity and enthusiasm• Understand change management:

– Identify and remove barriers– Emphasise the positive– Promote champions

• Engage with suppliers• Provision of coordinator to unlock greater potential.• Utilise scrutiny• Whole life costing but evidence shows short term costs also competitive!• Kudos and improved reputation.

LG Sustainable Procurement Strategy (1)

• Councils, working with local partners, will pursue the achievement of social, economic and environmental benefits through the Sustainable Community Strategy, Local Strategic Partnership and Local Area Agreement -including leveraging the purchasing power of the partners.

• Award contracts on the basis of whole life costs and benefits. • Review and, where necessary, reset strategies, policies, priorities and

targets for sustainable procurement and asset management against the Flexible Framework and measure progress through the council’s performance management system.

• Encourage ownership of our commitment by the political and managerial leadership of the council and engage scrutiny in the search for more sustainable solutions.

• Secure appropriate training and development for councillors, senior managers, procurement and service managers.

• Mainstream sustainable procurement and asset management into all of our activities including those carried out at arm’s length and through strategic partnerships.

LG Sustainable Procurement Strategy (2)

Acting collectively, councils will take the following action -• Prioritise action on construction and facilities management - the

largest category of procurement expenditure in the sector – followed by waste management, energy, transport and food.

• Collaborate locally, regionally and nationally, using our purchasing power to transform these key markets including the stimulation of innovation.

• Work together to agree a clear set of standards for the sector linked to corresponding standards under development for the rest of the public sector.

• Identify exemplars of good practice (against the Flexible Framework) and challenge ourselves to raise our own performance.

• Expect our achievements to be measured and recognised through the new performance management framework including our use of resources.

• Take account of the recommendations of LGA’s Climate Change Commission in our local and regional strategies.

LG Sustainable Procurement Strategy (3)

• Expect Government to put enablers in place in a timely manner to help us achieve the shared goal.

• Look to the joint National Improvement & Efficiency Strategy to mobilise sector resources in support of this agenda including through the Regional Improvement & Efficiency Partnerships.

• Review guidance for local government, including budgeting, investment appraisal and tender evaluation, with regard to the consideration of whole life costs and benefits.

• Invite the LGTF to play a leading role on sustainability in the construction and facilities management priority area together with 4ps.

• Examine how the focus on sustainability within the local government gateway review process can be enhanced.

• Develop the national programme on third sector commissioning through a dialogue with councils, the wider public sector and third sector and as an integral part of the sustainable procurement agenda.

 

The Challenge

• Generating understanding and awareness of relevance to organisation’s main purpose

• Mainstreaming into primary strategies and key decisions

• Training and development – all levels• Establishing advocates and champions• Celebrating success – debunking myths• Establishing an accessible, credible and relevant

knowledge base• Developing credible metrics

National SP Activity

Governance of Improvement & EfficiencyDelivering Value for Money in Local Government: Meeting the challenge of CSR07 - CLG Oct 2007

Support for CouncilsDelivering Value for Money in Local Government: Meeting the challenge of CSR07 - CLG Oct 2007

Various Elements of Good PracticeDelivering Value for Money in Local Government: Meeting the challenge of CSR07 - CLG Oct 2007

Gap Analysis

Plan & Implement

Improvement Programme

Improvement & Efficiency Timetable

• RCE current horizon is 31 March 2008• RCEs and RIPs merging into RIEPs by March 2008• National Improvement & Efficiency Strategy funding

determined by CSR07• National Improvement & Efficiency Strategy Nov 2008• Regional I&E Strategies prepared by Jan 2008• CLG I&E prospectus by Feb/Mar 2008

– CSR07 priorities, resources, delivery plans, devolved resources

• Regional I&E Strategies approved by Mar 2008• RIEP delivery commences July 2008