Sustainable Procurement in Scotland: The Duty is in the Detail
Read our latest article as we take a look at the findings and recommendations within the recently published Blake Stevenson Procurement Research Report.
Scotland has distinguished itself as a leading home for social enterprises in recent years. Representing a diverse business community, social enterprises are worth around £4.4bn in annual revenue to the national economy, providing exceptional products and services whilst supporting communities. Scotland’s success has been driven, in part, by innovative public procurement policy, including the Sustainable Procurement Duty (SPD).
The SPD requires public buyers to consider the social, economic and environmental wellbeing of the area in which they operate, with an emphasis on reducing inequality. It also stipulates that procurement decisions must demonstrate efforts to involve SMEs and third sector organisations, and to promote innovation. By embedding and prioritising social value in this way, the government has set the stage for Scotland’s continued leadership on social enterprise in the twenty-first century.
But despite the country’s well-deserved reputation, a closer look reveals that these policies have achieved mixed progress. In September, the Scottish Government published research, conducted by Blake Stevenson Ltd, on the impact of the SPD and the experiences of SMEs and social enterprises in their dealings with public buyers.
On the one hand, the report found that third sector organisations and new businesses view contracting with the public sector to be mutually beneficial. The majority of the participants in the study (social enterprises, third sector organisations, and new SMEs) also believe that ‘significant progress’ and ‘continuous improvement’ is being made by the government, and by the wider public sector, on social procurement. However, they also cited numerous barriers to entry, describing major bureaucratic obstacles and a tendering landscape that remains skewed in favour of large corporations.
The bureaucratic barriers include complex and long-winded procurement processes, (which are often not justified by the value of the contract); difficult and outdated procurement systems; and ‘onerous’ terms and conditions. These issues disproportionately affect SMEs and social enterprises, as they often lack the surplus capacity needed for convoluted administration. In this way, the report serves as a stark reminder that policy alone is not enough: systems and structures must adapt in order for policy to translate into meaningful change.
Beyond this, leaders of SMEs and social enterprises still felt that the odds were stacked against them, despite acknowledging that the willingness to change exists. In particular, they pointed to the fact that many of the measures introduced to facilitate social procurement—framework agreements, lotted contracts, assessment processes—did not provide the intended benefits, and often just added to the admin load. Moreover, more must be done to acknowledge the limited capacity and financial precarity of smaller organisations which are aiming to deliver ‘more than profit’: currently, many of the contracts offered are of low value, but are equally taxing in terms of procurement bureaucracy, and supplier shortlists are often kept hidden, depriving businesses’ of the opportunity to scrutinise public sector decision making. Participants also highlighted insufficient early market outreach for new contracts, meaning that smaller, community based organisations are left without the time and resources needed to compete. And, unfortunately, participants also voiced their suspicions about the persistence of conflicts of interest and preconceptions within public procurement teams.
This research offers a fundamental insight. The message, which was consistent across the answers of nearly 100 of those who took part in the interviews and survey, is that policy is not translating into sufficient action. The SPD, while a landmark in procurement legislation, lacks practical force and preemptive detail on how to integrate SMEs and social enterprises into public supply chains. The report, on the other hand, offers clear recommendations: simple and consistent tendering processes; effective training for suppliers; streamlined and user-friendly procurement solutions; practical support around capacity building and resources; and better and more direct relationships between buyers and suppliers.
These initial measures, if implemented in a spirit of practical determination, could prove transformative for Scotland’s local businesses and social enterprises, and for the communities they serve. Naturally, many are now concerned that the unfolding economic crisis will mean that suppliers are even shorter on capacity, while public bodies have less time and fewer resources. However, the current economic climate means that the need to honour the SPD and act on this report has never been more urgent. If effective steps are taken now, social enterprises could play an even greater role in fending off the depravations of inflation and recession, whilst making profound contributions to communities across Scotland.