Money Talks
Barbara Morton explains how to bring sustainable procurement to your organisation without delay
These are exciting times to be working in procurement and supply chain management. For too long, procurement has been treated as the poor relation amongst its counterparts – not least in local government. But the scene is changing. Procurement is beginning to be seen as lying at the heart of local government’s purpose – to deliver more sustainable communities. The local government scene is now dominated by Local Strategic Partnerships, Local Area Agreements and Sustainable Community Strategies, where the opportunities for excellence in both procurement and commissioning are just starting to be exploited.
At the same time, sustainable procurement has leapt up the agenda of many local authorities and their potential partners across the public sector. This should come as no real surprise since sustainable procurement is about delivering a wide range of corporate objectives. For local authorities, it’s about delivering on the sort of objectives that tend to keep chief executives awake at night – sustainable communities, local employment and regeneration, diversity and equality, waste and increasingly, climate change. For those who have woken up to the potential, sustainable procurement is already regarded as a route to delivery of these objectives. Others are beginning to see the opportunities.
Why now?
So,why now? Back in June 2006, a business-led Sustainable Procurement Task Force, chaired by Sir Neville Simms, chair of International Power, produced a set of recommendations to government in a report called ‘Procuring the Future’ (an interview with Sir Neville Simms is contained within this edition). This addressed the whole of the £150bn the UK public sector spends every year. Councils in England account for some £40bn of this figure. In March, UK central government responded to the Task Force recommendations by publishing a Sustainable Procurement Action Plan, putting an emphasis on climate change and natural resource protection.
Local government has been consulting on its own response. The Improvement and Development Agency has worked with the Regional Centres of Excellence (where the North East Centre leads on sustainable procurement) to develop the response.
Many commentators have been quick to point out that the draft response from local government maintains the balance of economic, environmental and social considerations which are fundamental to sustainable procurement.
Health/social care response
Intriguingly, the response from the health and social care sector shows a similar balance. Positively, many chief executives are recognising the benefits that can be delivered when sustainable procurement is taken seriously. In fact, most local authorities are doing something – although they may not badge their activities as sustainable procurement.
Some good examples were identified by the Task Force and others are mentioned in the local government response. For example, Newport’s southern distributor road improvement project used around 98% recycled and secondary aggregate. The use of recycled material resulted in direct cost savings in construction of £1,034,135, avoided landfill costs of £941,360 as well as reduced carbon emissions and particle emissions. Whilst Stockport Council has taken an innovative approach to combating social exclusion by setting up a Social Enterprise company.
Of course, some parts of the public sector are doing more than others – and the Sustainable Procurement Task Force wanted this practice to become the norm rather than the exception. So it developed its own set of building blocks on which public sector organisations can develop their own unique approaches (see box below for practical advice on this).
It’s clear that in local government at least, attention is shifting from the perceived barriers to sustainable procurement, including public procurement rules and budgetary constraints, to focus on what can be done and by whom.
This is where the procurers come in: those who really understand the agenda can influence the behaviour of others. They can and do change mindsets and help deliver solutions – for chief executives and finance directors as well as for their political masters. An often quoted example is that of Warwickshire, where procurement officers have shown that it is perfectly possible to meet the requirements of the efficiency agenda and deliver on sustainability targets at the same time.
Work on influencing behaviours is taking place under the banner of the Regional Centres of Excellence, led by David Wright and the North East Centre. A sub-group is developing tools and techniques to help local authorities move through the levels of the Flexible Framework (a maturity model with five levels developed by the Task Force as one of its building blocks).
The approach works on the basis that different audiences have to be engaged in the process. Each needs a consistent message about the benefits of sustainable procurement and the fact that good procurement is sustainable procurement, as stated in the UK Sustainable Procurement Action Plan.
Short sharp message
The sub-group recognises that it needs to deliver a short sharp message, making clear the connections between procurement and sustainable community strategies, wellbeing powers and third sector engagement, amongst other things. The key messages need to be about things the chief executive cares about, including budgets. The new performance assessment processes being developed by the Audit Commission are likely to include new ways of looking at the delivery of value, including sustainability. When future budgets depend on being able to demonstrate that procurement and use of resources are sustainable, minds will tend to be focused.
Elected members too are concerned, not unreasonably, with the needs and desires of local communities, so the approach focuses on how procurement can be used to stimulate markets for new products and services, providing employment opportunities for suppliers and contractors who are able to respond.
The sub-group is developing training and support packages for procurers and their colleagues, since procurement in local government is often a devolved activity, carried out by non-specialists all of whom have a role to play but may not yet recognise it. Those responsible for developing designs and specifications are equally important – often the sustainable option is locked out by the design process. The earlier in the decision-making process sustainability is considered, the more sustainable the solution is likely to be.
Procurers often miss the most obvious solution – not to buy at all. This asks people to re-think their reasons for buying – and so consuming resources.
BARBARA MORTON is director of Action Sustainability, a social enterprise set up to lead and inspire sustainable procurement. Visit: www.actionsustainability.com
ACTION PLAN
- Have a look at the Flexible Framework and decide who needs to be involved in assessing your status. Visit: www.sustainabledevelopment. gov.uk/publications /procurement-action-plan/
- Get the group together by identifying the key stakeholders, some of whom may be external.
- Carry out a self-assessment against the Flexible Framework. This will give you an idea of how well you are doing as well as the gaps that you need to address.
- Then decide where you want to be, and by when. Set a target for improvement and identify who else needs to be involved.
- You can turn your results into an action plan by following the example of Newcastle City Council who participated as one of the pilot sites in testing the Flexible Framework as it was being developed by the Task Force.
- You may want to define your own organisation’s priority spend areas or categories. These will be developed by your organisation, based on its own stakeholder needs and requirements and the opportunities you want to focus on. The Task Force identified a top 10 at national level across the whole of the public sector: 1 | Construction 2| Health and social work 3| Food 4| Uniforms, clothing and other textiles 5| Waste 6| Pulp, paper and printing 7 | Energy 8 | Consumables – office machinery and computers 9 | Furniture 10 | Transport (business travel, motor vehicles) However, the Task Force did not intend this to be a one size fits all. Indeed it stressed the benefits of being flexible in order to reflect local priorities and stakeholder needs.
- Running the Task Force’s prioritisation methodology for your organisation will give you a top 10 based on your situation.
- Build capacity. This can involve training the people in your organisation. But remember it’s also about building confidence that sustainable procurement is not only achievable within the rules, but actually delivers a wide range of benefits.
- Engage with your suppliers. Many suppliers and contractors are willing to get involved.
- Measure your results. This will enable you to demonstrate the benefits of your approach by showing sustainability and savings in the same package.
- Share your experiences. To maintain momentum you may want to do as Wakefield Council has done and set up a learning network on sustainable procurement. The benefits include learning from colleagues who are faced with the same challenges and exploring new ideas in a safe environment.
- Keep going and bear in mind that sustainable procurement is a journey. As standards increase and leaders continue to forge new paths, so expectations will go on increasing. But the benefits will have started to flow. There may be a time when we no longer need to use the term sustainable procurement: it will simply be part of good routine procurement practice.
