Sustainable procurement duty - impact and value analysis: main report

Chapter 4: Promoting innovation

In order to comply with the Duty, public bodies are required to consider how they can promote innovation through their procurement activity. The statutory guidance on the Procurement Reform (Scotland) Act 2014 states that innovation in public sector procurement gives public bodies “the opportunity to influence the market towards innovative solutions”.^[133]

The statutory guidance also provides examples of how public bodies can promote innovation through their procurement activity, such as:

• use of e-procurement, e.g. e-catalogues and e-invoicing
• procuring research and development
• driving demand for the creation of new technologies, standards and services.

Through this research, we examined the extent to which public bodies are currently complying with this part of the Duty. We analysed information on approaches taken to delivering innovation provided through procurement reports, responses to our survey and interviews conducted during this research. In this section, we discuss the extent to which public bodies in Scotland are promoting innovation through procurement.

Examples of promoting innovation

Two public bodies in particular provided detailed descriptions of how they promote innovation through procurement and described several examples of innovative procurement practice.

For example, one of Aberdeenshire Council’s dedicated strategic objectives is to:

“Deliver value and innovation by effective use of category and commercial management techniques and utilisation of spend analytic tools to enable smarter decision-making; identify collaborative opportunities and provide sector-specific market intelligence to inform decision making”^[134]

Examples of how Aberdeenshire Council meets this duty include:

• identification of new service delivery models
• maximising the benefits of digital technology such as through purchase to pay processes, electronic tendering, e-auctions and dynamic purchasing systems
• sharing of best practice and processes to identify standardisation, consistency, efficiency and effectiveness

The Scottish Government also provided examples of how it actively promotes innovation through procurement. For example, it included a detailed section on its CivTech Programme, a project that fosters innovation by funding SMEs to deliver creative solutions to challenges set by different public sector bodies. Some challenges in CivTech 3.0 included “How can tech help stop illicit trading?” and “How can we use data to drive up standards in social rented housing?” The CivTech programme is described further in the Scottish Government’s annual procurement report:

“Our CivTech® Programme addresses public service challenges in an innovative way, rather than relying on established methods. The project involves public organisations setting civic challenges which smaller businesses are encouraged to tackle using innovative solutions. It enables the rapid development of creative, cost-effective solutions delivered by those businesses. CivTech® is providing pathways for tech SMEs and start-up businesses to secure public sector contracts. It offers real opportunities to deliver even better services for people and even better value for service providers.

The CivTech® approach is valued in procurement because of the innovative way it finds solutions to challenges and helps solve the problem of “how do we procure technology that we don’t know exists?”.

Started in 2016 as a pilot, CivTech® was the first pan-public sector tech accelerator of its kind. It has already demonstrated its ability to build businesses and create jobs, while driving improvement in the delivery of public services as well as enhancing our international reputation for innovation. Following its successful pilot, the second phase of CivTech® was launched during the reporting period, with challenges ranging from a smarter booking system for outpatient appointments, to using data to improve global perceptions of Scotland, to combatting bird of prey persecution. CivTech® 3.0 launched in June with ten challenges ranging from tackling illicit trading; improving hospital waiting times; to driving up standards in social housing and protecting the digital footprint of young people”^[135]

Other public bodies provided examples of promoting innovation through their procurement activity. For example, Glasgow Kelvin College’s procurement report detailed the opening of Glasgow Kelvin Velocity, an innovative cycling hub based at its Springburn campus. This has contributed to the college’s sustainability objectives through the delivery of drop-in bike fix sessions, promotion of active travel and bike breakfasts events.^[136]

The Scottish Fire and Rescue Service has also promoted innovation through its procurement of new technology and vehicles:

“The SFRS continues to seek new ways of supporting service delivery through the introduction of new technology. One example of this was the Rapid Response Unit procurement exercise which involved the introduction of innovative firefighting vehicles and equipment, including new technologies, into our fleet which was successfully delivered working in partnership with the supplier, Emergency One. This approach will continue with future projects linked to Service Transformation, to enhance service delivery and increase firefighter safety”^[137]

Police Scotland introduced a new strategy, Policing 2026^[138], which has resulted in the procurement of new technology, new equipment and transformational support.

APUC has designed its own in-house procurement tool called Hunter, which has been adopted by other universities and colleges. It is a database solution which uses standard Microsoft packages allowing universities and colleges to effectively monitor and report on collaborative contracting activities.^[139]

The University of Edinburgh’s Service Excellence programme has delivered examples of innovative procurement. For example, ‘Core Systems’ is an award-winning programme which supports the design and delivery of a new finance system that will enable new services and process efficiencies.^[140]

Other public bodies provided more generic examples of promoting innovation, including:

• encouraging innovative approaches when advertising tenders
• working collaboratively and developing partnerships with other publicly funded bodies, professional bodies and supply markets
• implementing Dynamic Purchasing Systems
• use of category and commercial management techniques and utilisation of spend analytic tools
• implementation of new finance systems
• use of digital technology

The lack of detail provided in the procurement reports is not necessarily an indication of a lack of innovation in practice. Rather, it may be that innovation is more widespread but is not currently being reported in adequate detail.

However, our discussions with key informants and with deep dive case study organisations suggests that, while innovation may be more widespread that is currently being reported, this is an area where organisations require further support to better understand how innovation is defined and how to report on innovation more effectively.