Scotland's journey of achieving sustainable procurement outcomes 2002-2022: independent review

Executive Summary

Introduction and methodology

This independent research examined Scotland's journey of achieving sustainable procurement outcomes and reflected on comparable models in other parts of the UK. The research was commissioned by the Scottish Government and was undertaken by the independent research company, Harkins Research & Consultancy Ltd, from December 2021 to June 2022. The project involved a literature review and qualitative research with key stakeholders (n = 43) working in procurement across the UK. Sustainable procurement outcomes in Scotland are defined as encompassing improvements to the economic, social and environmental wellbeing of a community.

Literature review key findings

From the early 2000s, Scotland has demonstrated a real commitment and desire throughout local and national government to encompass community benefits and sustainable outcomes through public procurement activity. This is evidenced by its policy, practice, culture, and through a substantial programme of activity across the public sector. The literature review across the UK indicates that Scotland appears to be leading the way in many areas. These include:

• The strength of commitment to the sustainable procurement agenda and the consistent focus which has driven innovation and improvement, most notably via the Procurement Reform (Scotland) Act 2014 (the Act) and the Sustainable Procurement Duty.
• The support and tools available within the Procurement Journey website and Sustainable Procurement Tools platform accompanied by ongoing training and engagement.
• The sharing of best practice, innovation and outcomes through the ongoing publication of case studies, commissioned research, and annual reports which provide a clear and transparent picture of what is being achieved, and the priorities for development and improvement.

The UK Government's Procurement Bill is proposing many elements already embedded within Scottish practice and enabled through the reform of Scottish procurement policy and legislative framework. This indicates the strength of Scotland's position and progress in relation to sustainable procurement.

Qualitative research key findings

Benchmarking practice across the UK

Most respondents were in agreement that Scotland leads and has always led the way in driving improvement and outcomes in sustainable procurement due to:

• A top-down commitment
• Supporting policy and legislation
• An integrated approach enabled by high-level transparency and commitment to a continuous improvement process; and
• The tools, support and training provided by the Scottish Government to aid Scotland's journey of achieving sustainable procurement outcomes (including the Sustainable Procurement Tools platform and the Procurement Journey website).

A common challenge reported across the UK is monitoring and measuring impact of sustainable procurement policies, with a mixture of hybrid approaches being applied, although Scotland prioritises social impact rather than monetary benefit.

The concept of 'Community Wealth Building' was discussed, with the Preston Model, which focuses on building collaboration to support the local economy having gained significant traction. The model was said to encompass a range of valuable approaches that facilitated community benefits, although many highlighted that these approaches appear to have long existed in Scotland.

There appears to exist positive, collaborative relationships among some procurement professionals across the UK, within an ethos of sharing best practice and generating mutual benefit. Respondents did not generally have high levels of knowledge of different procurement practices across the UK, suggesting a need for the current research.

Sustainable procurement in Scotland

The Review of Public Procurement in Scotland – Report and Recommendations (the McClelland report^[1]) – was viewed by many respondents as a landmark report which heralded the launch of a transparent commitment by the Scottish Government to elevate the impact and importance of sustainable procurement. This included the Procurement Reform Programme which some respondents felt had spearheaded the creation of networks and forums across Scotland. The perceived strength of the Procurement Reform (Scotland) Act 2014 and the Sustainable Procurement Duty among some respondents was that it placed obligations on public bodies to address the key factors encompassing sustainable procurement, highlighted the need to link tenders to local priorities, introduced the requirement for procurement strategies and annual reports, and drove a change in supplier capability and readiness to deliver social impact.

What does good look like?

Current practice across the UK varies in terms of how public bodies outline their requirements for community benefits/social impact within a tender, although enabling benefits that are relevant and proportionate is a common thread. Procurement teams are involved mainly in the 'middle third' of contract development, delivery and management which involves supporting the tendering process, although earlier initiation of this involvement was said to generate better outcomes. Some respondents working in Scotland had made effective use of the Scottish Government's Sustainable Procurement Tools for some time, although there were ongoing recognised challenges with achieving effective use of the tools and ensuring tangible outcomes.

The Scottish Government's approach of not monetising impact was generally supported. The far-reaching complexity and nuance of social impact was thought by many to be impossible to capture by means of a calculated figure, although working towards a solution of how such benefits could be conceptualised or monitored in the longer term to demonstrate clearly articulated outcomes was suggested.

In the view of many respondents, a key element of practice is the Supplier Development Programme which is a collaborative, proactive programme involving procurement and economic development. The programme aligns with Community Wealth Building given its aim of providing local suppliers with the knowledge, skills and preparation required to maximise contracting opportunities in their communities.

A list of the key factors contributing to what good looks like were said to be as follows:

• Embedding and integrating sustainable procurement in the contract management process – embedding sustainable outcomes within the procurement process and the core of the contract; making it a "golden thread" from strategy to contract to delivery.
• Collaboration and networking –the forums that exist across and within the public, private and third sectors, with the Centres of Expertise being key in facilitating such networks, and the community engagement that takes place tailoring outcomes to local need. Engagement (and early engagement) among procurement stakeholders including having established networks and full stakeholder engagement in the planning/strategy stage to facilitate the most integrated approach and maximum impact is also valued.
• Developing the supply chain – a long history and demonstrated commitment to developing the supply chain and the local economy including the joined up, collaborative nature of the Supplier Journey and the Supplier Development Programme.
• Well-resourced, skilled, and integrated teams – investment and resource in an experienced, highly-skilled, integrated team with the capacity and capability to influence all stages of the journey of achieving sustainable procurement outcomes.
• Provision of support and training enabling consistency –the Scottish Government procurement team prioritising and enabling cross fertilisation of ideas, concepts and methods through ongoing training to continue to translate, interpret and simplify the procurement tools and the requirements of the Act.
• Not monetising social impact – the Scottish Government's approach of not attaching a monetary value to impact was generally supported and viewed as best practice.
• High-level commitment to continuous improvement – a demonstrated commitment and buy-in from ministers to investment in the sustainable procurement agenda, and the ongoing development of sustainable procurement in response to stakeholder need.
• Defining the scope of sustainable procurement requirements within a contract –current practice varies although enabling benefits that are relevant and proportionate is a common thread and considered best practice.
• Assessment and reporting processes and requirements –the annual reports drive improvement and behaviour change and increase transparency and sharing of best practice.
• Alignment with National Outcomes –outcomes in the National Performance Framework enable consideration of what is good for businesses and employees, places and communities, and individuals.

Barriers and Challenges

There were a range of barriers and challenges to achieving sustainable procurement outcomes as indicated below:

• Consistency – the balance between enabling flexibility and tailoring of approaches across public bodies; and including integrated, consistent approaches that reduce duplication of effort.
• Monitoring, management and evaluation of tenders– while recognising the nuance and the need to tailor approaches to local need, respondents recommended some level of consistency and guidance on the evaluation of benefits.
• Lack of resource and capability – exacerbated by austerity, the resourcing of procurement departments and in particular, the lack of resource for Community Benefit Officers.
• Recruitment –despite the Scottish Government strategy for addressing this issue through their Procurement People of Tomorrow programme, significant challenges exist in this area.

Recommendations

The research generated a range of recommendations for the Scottish Government, public bodies and stakeholders. These focus on further embedding sustainable procurement, better resourcing of teams, continuing with support and training for procurement professionals, and a continued focus on the most effective ways of conceptualising social impact within the contract and the outcomes.

Conclusion

To conclude, both the literature and the interview data appear to indicate that Scotland is regarded as a leader in the field of sustainable procurement, which is due to the ongoing dedication and commitment amongst the Scottish Government and key stakeholders to continue raising standards and maximising outcomes. Given the success of Scotland's journey of achieving sustainable procurement outcomes, and the benefits to be gained by raising the profile of the Scottish Model of Procurement in the UK, it is strongly recommended that the model is subject to a strategic marketing and communications plan to raise its profile. The model could be considered as a case study in itself, which has never been given the prominence it deserves.