Community benefits in public procurement

APPENDIX 4: DUNDEE CITY COUNCIL CASE STUDY

A4.1 Construction Pilots

The City Council was keen to support construction training and employment initiatives and selected the £3 million+ refurbishment and extension of Forthill Primary School as a pilot project. The council was able to draw on the experience of Hillcrest Housing Association which had included training and employment requirements in its house-building contracts. With access to a well-established construction training provider based in Dundee, Hillcrest Agency Services, the Council sought to create opportunities for a 'Hillcrest model' scheme in the Forthill contract. This involved consultation with the Hillcrest Agency Services manager but there was no input from the CBIP Procurement Group.

The contract notice in the Official Journal of the European Union used the 'model clause' from the CBIP Toolkit. However, there was no requirement for the contractors to submit a method statement with their tenders detailing how the TR&T requirements would be fulfilled.

The training and employment element of the specification for the Forthill School partnering contract was based on that used successfully by Hillcrest Housing Association for their house-building contracts. It required the contractor to deliver the following outcomes:

• 26 weeks of unwaged site experience opportunities for 12-15 general construction operative trainees that would be supervised on site by a trainer provided by Hillcrest;
• a further 12 weeks initial paid employment for 12-15 trainees with the contractor or their sub-contractors (either on the Forthill site or elsewhere);
• the provision of materials for the trainees;
• supply of a trainees' site hut with an office for the trainer.

In addition, the Invitation to Tender referred to the support of the Council for the Tayside Local Labour Initiative ( TLLI), and a requirement that the contractor submit a training and employment statement to the TLLI manager if requested to do so. It appears that there was no request for this since the TLLI were unaware of the contract.

Discussion with the contractor indicates that they are aware of the training and employment requirements of the contract and had discussions with Hillcrest Agency Services about how they could fulfil the requirement in the context of the contract works and timetable. The contract started on site in August 2004 but by December there had been no opportunities to take the team of trainees onto the site. Thebarriers to this were:

• the type of work was not conducive to a 12-15 strong team of trainees on site: there would be insufficient suitable work (at any time) for this team given the nature of the works being carried out;
• the work progressed more slowly than anticipated which has meant a somewhat stop-start progression with the early sub-contractors.

Despite the existence of the contract condition and the willingness of Hillcrest Agency Services to work with the contractor, no trainee opportunities were ever offered by the contractor. The targeted recruitment and training ( TR&T) contract obligations were not met.

There appears to have been a mismatch between the opportunities that could be provided by the contractor given the nature of the building works, and the opportunities required in the approach being offered by the Hillcrest. The latter's approach had been developed on housing contracts where there were essentially repetitive functions delivered by a team of sub-contractors carrying out traditional trades. The Forthill School contract had some refurbishment work, which required trades and trade trainees rather than General Construction Operative ( GCOs) and then numbers of specialist sub-contractors that were on site for short periods. This problem would probably have been identified if the procurement officers had undertaken an analysis of the labour content of the contract or if the bidders had been required to produce a method statement with their tender setting out how they would meet the requirements.

The contract clauses from the Forthill contract were used on a £12 million refurbishment contract of St John's High School. This was more successful with Hillcrest Agency Services recruiting and training 4 long-term unemployed people who were subsequently retained by the contractor. However, this pilot encountered a number of problems that limited its achievements:

• the funding for the training elements (provided by Scottish Enterprise Tayside) limited recruitment to people aged 25+ who were eligible for 'Training for Work' (TfW,a training programme run by Scottish Enterprise);
• eligibility for TfW required applicants to be put forward by Job Centre Plus. In the training manager's view insufficient people, and too many inappropriate people, were put forward; ⁹⁹
• the contractor was not pro-active and only approached Hillcrest at a late stage - so there was insufficient time to undertake proper promotion of and recruitment to the scheme.

The two pilot construction contracts have been successful in demonstrating that the Council has the legal and policy basis for including targeted recruitment and training matters in its contracts. It seems that in both contracts the contractor was not sufficiently engaged or committed to devise a method that would ensure that the Council's targeted recruitment and training requirements were met. This lack of pro-active engagement may also apply to some of the supply-side staff agencies that the Council relied on to help deliver successful pilots.

The result was that one of the pilot contracts, which was worth of £3 million, achieved no outcomes and the other, which was worth £12 million, achieved 4 outcomes.

A4.2 The Social Care Pilot

The following text is an extract from a Council report setting up the pilot project:

"4.6 Dundee City Council Social Work Department proposes that new contracts should incorporate community benefit requirements, but existing contract holders are encouraged to comply on a voluntary basis until contract renewal. The pilot will be managed via the Social Work Department Contracts Section, together with Service Development Managers. A selection of existing contracted providers will be involved in the pilot stage. In the event the pilot phase proves successful the principle of including Community Benefit clauses in all local Social Work Department/Dundee City Council contracts, would be pursued.

4.7 The pilot will commence on 1st September 2004 for one year. Outcomes will be evaluated and reported to the Social Work Committee by December 2005. Outcomes will determine the level of activity/expectation that should be included in any contractual clauses, post pilot. Attention will be paid to any financial disincentives, particularly inthe area of employment of people with disabilities, experienced by social care providers involved in the pilot. Issues will be highlighted in the evaluation report and will inform recommendations.

4.8 The pilot will engage with a selected range of providers in the city who deliver support and care to people with learning disabilities, in their own accommodation. The majority of individuals receive support over 24 hours. All providers are on the DCC SWD ¹⁰⁰ Approved Provider List and are undergoing registration with the Care Commission as Housing Support providers/Support providers/Care at Home providers.

4.9 The pilot will focus on two areas of Community Benefit:

• The employment of people with disabilities, including those with learning disabilities;
• The provision of in-service training: establishing a minimum requirement for all providers.

4.10 Within the social care sector a key target group for anti-poverty action is people with disabilities, including those with learning disabilities. These citizens face particular disadvantage in achieving both the income and the self-esteem that comes from engagement in the labour market. These barriers mean that social investment in education and training is not leading to employment and improved quality of life. Recent Scottish Government publications: 'Same as You' and 'Working for a Change' highlight these issues for people with learning disabilities.

4.11 To achieve these providers will be required to:

• Advertise all vacancies in the local Job Centre Plus;
• Advertise all vacancies in the local Employment Disability Unit;
• Adopt the Dundee City Council guaranteed job interview scheme;
• Provide placements to students with disabilities undertaking training;
• Offer job tasters to people with disabilities.

Placements are be defined as - a placement in the workplace of up to 12 weeks, which includes job coaching, support and weekly site visits via the Supported Employment Team/E.D.U. A placement may lead to permanent employment.

Job tasters are defined as - a period which can be 1 day or up to 2 weeks, which purely enables an individual to experience the concept of work, in the specific setting. Thismay or may not lead to permanent employment.

Providers will demonstrate how they achieve the inclusion of people with disabilities in their workforce (voluntary, temporary & permanent) by submitting a Disability Monitoring Schedule (Appendix A).

4.12 Dundee City Council, under its duty of 'best value' is required to take steps to ensure that the quality of its care services whether provided or purchased, can be continuously improved. To achieve this, will require service providers to provide training to agreed standards for their staff, including those aspiring to more senior positions. These requirements will enhance and contribute to requirements of registration from the Care Commission.

4.13 To achieve this providers will be required to submit a Staff Training Schedule which will demonstrate how they will ensure that a minimum of 33% of their workforce are engaged in training (appendix B). The term workforce is to include roles covered by sub-contractor's staff and/or agency staff. It is anticipated that at least 50% of the training will lead towards recognised qualifications in the care sector. Other training can include basic skills, catering, health & safety, administration and management. (in-house & external training).

5.1 Individuals in Dundee with disabilities will benefit from initiatives, which facilitate social inclusion and anti-poverty action.

5.2 The proposed Community Benefit & Procurement social care pilot will ensure increased opportunities for individuals with disabilities including those with learning disabilities, to consider and experience work in the social care sector. The pilot will seek to use existing systems to support people with disabilities into the workplace and as a result will increase choice and opportunity.

5.3 The pilot will also contribute to the short and long-term skill development of the local social care workforce. This will ultimately contribute to the capacity of Dundee City Council and its partner organisations to recruit and retain staff in order to enable local people with support/ care needs to be maintained in their own homes."

It is understood that all of the suppliers to the Council agreed to take part in the pilot on a voluntary basis. Three months later, monitoring of the programme produced the following information:

• although five of the six participants had advertised for staff and some had notified the Job Centre of vacancies, none had notified the Employment Disability Unit as required;
• none of the providers had made contact with Dundee College or the Employment Disability Unit to offer work experience opportunities (as required);
• all providers had staff that were undertaking training, but several expressed scepticism that the target of one-third receiving training could be sustained either interms of staff availability or cost.

The above suggests that the agreement to participate in the pilot was made by the providers without working through the implications and there does not appear to have been a sufficient commitment to the pilot to change the way that the providers operated. Comments from the providers indicated doubts in three areas.

First, the potential of the Employment Disability Unit to provide people with suitable skills for the vacancies that are becoming available. This may be because the providers under-estimated the capacity of people available through the Unit. There was no evidence for this assumption.

The pilot was switched from residential care to home care to test a new hypothesis: that people with disability will have more empathy with, and provide a better service to, others with a disability. ¹⁰¹ Providers of residential care services to the Council may have been better placed to deliver the requirements because they could offer a wider range of opportunities.

Secondly, there was a view that the target of 33% of staff undertaking some form of training was excessive because it implied too many staff undertaking off-site training. This raises three questions:

• what would be an acceptable target?
• what forms of training were considered within the wide specification?
• why were these problems not raised by the contractors when first consulted?

The Final issue was the cost of training. The view from existing providers was that they could not afford to pay for training at the rate required. If the requirement was included in the specification then the questions about cost would change. This would shift the focus to how far the Council is willing and able to pay for the training outcomes. This is a best value issue for the Council.

It is understood that the pilot was not pursued and that the intention to introduce targeted recruitment and training requirements in social care contracts lapsed.

A4.3 Conclusions

Through the efforts of the Community Benefits in Procurement Group and the officers involved in each pilot Dundee City Council has established the principle, in terms of legal powers and Council policies, that targeted recruitment and training outcomes can be sought through the procurement of works and services. However, neither pilot delivered any significant additional Community Benefits.

The key reasons for the lack of outputs are essentially common to both pilots. Firstly, the requirements were not appropriate for the type of works/services that were to be delivered. This is most obvious in relation to Forthill School, but also applies to the social care provision where the requirements and targets would be much more relevant to a residential care provider than a home care provider.

Secondly, the processes used to obtain a commitment from the providers were not sufficient to ensure that they thought seriously and practically about how they would deliver the requirements. In the other CBIP pilots the contractor has been required to provide a method statement saying how they would deliver the requirements. This forces them to pay serious attention to what is being asked for and how they will build this into their operations and costs.

Thirdly, the Council did not make sufficient connections internally. For example, there appears to have been little connection between the Forthill School contractor and the Council-led Tayside Local Labour Initiative. In addition, the Council's recruitment team (that work with one of the social care providers) was not consulted about the deliverability of the recruitment requirements and was not made aware of the changes required by the pilot to its normal procedure. Finally, the main focus of the Social Work Department was the development of the Dundee Social Care Academy - a new entry-level training facility that required access to trainee jobs to achieve its goals. The potential of using contractual leverage to secure these trainee jobs from suppliers to the Council does not seem to have been recognised.

These are the key explanations for the relative failure of the Dundee pilots that could be considered. However, there are a number of other issues which contributed to the outcome. The first is the Council's reliance on the providers' goodwill rather than contractual relationships.

The second issue is that in each case the pilot was implemented by Procurement Officers in Architectural Services and Social Work. These Officers have a wide range of obligations and were taking this on as an additional responsibility. The commitment of these Officers should be commended but clearly they had wider issues and concerns to consider. Their efforts to progress the pilot do not appear to have been sufficiently embraced at a strategic level within the organisation. This is in contrast to other CBIP pilots whether there was stronger resource commitment and more clearly identified project champions.