The Scottish Government Procurement Strategy April 2024 – March 2028

Appendix 1 – Policies

The below statements reflect the commitment that our regulated procurements will:

APP1.1 Use community benefits in our public contracts where possible

How: In line with the Sustainable Procurement Duty and specific obligations regarding community benefits in our legislation, we continue to mainstream the use of community benefit requirements in public contracts to deliver wider benefits for local communities and wider society. This complements our activities to facilitate access to procurement for SMEs, the third sector and supported businesses and helps us to deliver wider social and economic benefits as part of our public spending decisions. Community benefits are considered at development stage of the tender and, either added as a mandatory requirement from bidders or, where appropriate, provide bidders with the opportunity to suggest voluntary community benefits. Our contract notices for regulated procurements record whether contractors must deliver any community benefits. We also record any community benefits that have been delivered as part of our contract management arrangements and will report on these in our Annual Procurement Report.

APP1.2 Consult and involve those affected by our procurements

How: Where appropriate, we work with people who use services, potential suppliers and others to help us design procurements. This can vary from market research, Requests for Information (RFI) exercises, issue Prior Information Notices, to supplier engagement days or the design and piloting of services. For national contracts we may involve people who use services through ‘user intelligence groups’, and others where we require input to specific procurements, for example, trade unions.

We record and review any complaints relating to failure to consult fully on any of our procurements. Our Annual Procurement Report will include information about any conclusions we reach and any measures taken in response to complaints.

APP1.3 Consider fair work practices, including paying at least the real Living Wage to people involved in delivering our contracts

How: The strategic ambitions for fair work are set out in the Fair Work Convention’s Framework and we have set out actions in our Fair Work Action Plan. That Action Plan prioritises Fair Work First (FWF), which is our flagship policy for driving high quality and Fair Work across the labour market in Scotland by applying FWF principles to public funding. FWF asks organisations bidding for a public contract to commit to adopting the seven FWF criteria, which are:

• payment of at least the real Living Wage;
• provide appropriate channels for effective workers’ voice, such as trade union recognition;
• investment in workforce development;
• no inappropriate use of zero hours contracts;
• action to tackle the gender pay gap and create a more diverse and inclusive workplace;
• offer flexible and family friendly working practices for all workers from day one of employment; and
• oppose the use of fire and rehire practice.

We have updated our procurement processes to ensure that the FWF criteria are included in all relevant procurements. We will consider fair work practices as early as possible in all of our procurements and address this by including award criteria, where relevant and proportionate in our contracts. We also ask if bidders are accredited Living Wage employers.

Since October 2021, we have required payment of at least the real Living Wage in our new contracts and frameworks where it is relevant and proportionate. We will continue to record commitments made by suppliers to pay at least the real Living Wage. These will be included in the Annual Procurement Report of our performance against this strategy.

APP1.4 Be satisfied our contractors and subcontractors comply with the Health and Safety at Work etc. Act 1974 and any provision made under that Act

How: It is a standard condition of our contracts that the contractor must keep to all laws that apply, all requirements of regulatory organisations and industry good practice. This includes any relevant health and safety law. Also, whenever a contractor’s staff are on our premises, under the terms of our standard contracts, they must keep to our own health and safety requirements.

We revise our contract management arrangements to make sure that we include information about health and safety incidents related to delivering our contracts and any measures that we take to put things right. This information will be included in the Annual Procurement Report of our performance against this strategy.

APP1.5 Procure fairly and ethically traded goods and services which advance human rights and equality

How: Scottish Government is driving an ambitious and progressive agenda to ensure equality and human rights are embedded in all we do. We recognise that procurement is a lever in achieving this ambition.

Human rights

The Scottish Government is committed to ensuring that everyone in Scottish society can enjoy their human rights in full. That includes being able to live with dignity and being treated fairly and without discrimination. We should all be able to make properly informed choices. That includes participating in making decisions which affect our rights, whether services are delivered directly or are procured from third parties.

The Scotland Act 1998 and the Human Rights Act 1998 ensure that Scottish legislation and the actions of public bodies have to comply with human rights derived from the European Convention on Human Rights. The Scottish Government also has devolved responsibility for observing and implementing international human rights treaties ratified by the UK, such as the International Covenant on Economic, Social and Cultural Rights and the European Social Charter.

The Scottish Government has a responsibility to respect, protect and fulfil the rights of every individual in Scotland, which includes the duty to protect individuals and communities against human rights abuse by third parties, including where the State either contracts with, or legislates for, business enterprises to provide services.

The Scottish Government’s annual Programme for Government highlights further commitments to enhance and develop human rights protections in Scotland, including a commitment to introduce a Human Rights Bill for Scotland. This Bill will incorporate internationally recognised human rights standards into Scots law.

We expect companies that are awarded our contracts to adopt clear corporate policies on human rights and to take action which prevents, mitigates and, where appropriate, remediates actual or potential human rights abuses. Our approach is described in Scottish Procurement Policy Note SPPN 3/2020: Reducing the risk of human trafficking and exploitation in the performance of public contracts, which encourages all public bodies to consider a similar approach.

We will consider the risks and opportunities at an early stage in a procurement process, enabling us to take account of ethical issues when assessing a bidder’s overall suitability and reliability to be awarded a contract. This includes considering whether the bidder has been convicted of certain criminal offences or has committed any acts of professional misconduct while running their business.

Our Annual Procurement Report will include a statement about the effectiveness of our selection procedures.

In December 2023, the Scottish Government published its Slavery and Human Trafficking Statement. This statement outlines the strategies and actions we have taken to identify, prevent and mitigate slavery and human trafficking in our own operations and supply chains. Our approach to human rights, including preventing human trafficking and exploitation in our supply chains across the wide range of goods, services and works that we procure, is to consider actions on a case by case basis. This approach ensures relevance and proportionality and takes into account the subject matter of the contract and associated market analysis, along with value and risk. Any actions being taken to manage human rights procurement risks are recorded centrally on our internal contract register.

Policy coherence for sustainable development

Global Citizenship: Scotland’s International Development Strategy sets out Scotland’s contribution to the international community. The Scottish Government is committed to a Policy Coherence for Sustainable Development (PCSD) approach (‘the Beyond Aid’ agenda) which recognises the impact of Global North government policies that affect Global South countries, and that some of the greater benefits to the world’s poorest and most vulnerable can be brought about not through development assistance but through policy changes.

Taking a PCSD approach means ensuring that across government, there is greater coherence in the approach to trade, human rights, procurement, exporting and importing. We have already recognised this in our 2021 policy - Vision for Trade. The use of public procurement to support ethical and fair trade producers and suppliers is also a good example of applying a PCSD approach.

The achievement of Fair Trade Nation status for Scotland, first in February 2013 and once more in March 2017, signals to the world that Scotland takes an active leadership role in challenging global poverty and recognising the dignity and rights of producers, through a commitment to fairness in international trading. Scotland has positioned itself as a Fair Trade Nation, with the aim to embed fair and ethical trade across all functions of government and business as a transformative response to creating a fairer society.

We use contract criteria to encourage transparency in the supply chain which in turn, supports positive practices and is in line with our Fair Trade Nation status to promote the use of fairly traded goods and services, where they are available. Our policy, guidance and tools encourage others to take a similar approach.

Equality

We take a holistic approach to ensuring we support and enable equality through procurement spend, whether that is driving Fair Work First and the real Living Wage in contracts and supply chains, embedding equality outcomes in community benefits through procurement, or reserving contracts for supported businesses, ensuring fair and ethical procurement and protecting human rights. We routinely consider equality alongside other economic, social and environmental risks and opportunities in our procurements.

The Sustainable Procurement Duty provides a procurement mechanism for the Scottish Government and other public bodies to comply with the general Equality Duty set out (section 149) in the Equality Act 2010 and with the specific duties in the Equality Act 2010 (Specific Duties) (Scotland) Regulations 2012. In essence, the specific legislation requires the Scottish Government, when delivering policy, to have due regard to the need to:

• eliminate discrimination;
• advance equality of opportunity; and
• foster good relations between people who share protected characteristics and people who do not.

The Fairer Scotland Duty, Part 1 of the Equality Act 2010 (also known as the Socio-economic Duty), requires public bodies including the Scottish Government to have due regard to how they can reduce inequalities caused by socio- economic disadvantage when making strategic decisions.

The Scottish Government undertook a consultation in 2021/2022 on the effectiveness of the Public Sector Equality Duty (PSED) regime in Scotland. The consultation sought views on whether listed public bodies should be required to set out a strategic plan on how they plan to meet their equality duties under the Scottish Specific Duties (SSDs), and report on how they have implemented them. It would also include reporting on the procurement duty (regulation 9). The intention is that any regulatory changes to SSDs will come into force in 2025.

In addition to our Annual Procurement Report, we currently report bi-annually on how our procurement policy and activity complies with the public sector equality duties.

APP1.6 Ensure contracts involving food improve the health, wellbeing and education of communities in Scotland and promote the highest standards of animal welfare

How: As a public body, we seldom buy food directly but we do use our catering framework to achieve a range of benefits. Our approach is to make sure that this keeps to government policies on healthy eating and nutrition, promoting fresh, seasonal, fairly-traded and local produce and to UK buying standards. These standards take account of factors including production, traceability, authenticity, origin, ethical trading, animal welfare, environmental standards and health and waste.

We are keeping a central record of the value of fairly-traded products bought or sold under our catering contract.

APP1.7 Pay invoices in 30 days or less to our contractors and subcontractors

How: Our late payment legislation requires all public bodies to pay invoices within 30 days. There is also specific guidance on late payment legislation and appropriate use of project bank accounts.

We are committed to prompt payment of invoices both to and by our contractors and their subcontractors. We commit to pay valid invoices within 30 days of receipt and, as a condition of contract, we require this commitment to apply throughout the supply chain relating to the contract. This condition, when applied throughout the supply chain, must also make clear that if a subcontractor believes that invoices are not being paid within 30 days they can raise the issue directly with us.

We work towards a ten day target for paying bills to businesses. This is a key objective and an important expression of our commitment to support businesses which goes beyond our contractual obligation to pay suppliers within 30 days. In the financial year 2022-2023, we paid 98% of valid invoices in ten days or less and 99% within 30 days.

Through our contract management arrangements, we monitor the percentage of our valid Scottish Government invoices paid on time, our average payment performance and any complaints from contractors and subcontractors about late payment and we take action if appropriate.

Prompt payment in the supply chain is a condition of contract at award stage of a procurement, and includes a contractual clause for payment terms to be passed throughout the supply chain relating to the contract.

APP1.8 Climate and circular economy

Existing procurement duties under the 2014 Act already require public bodies to consider and act on opportunities to improve the economic, social and environmental wellbeing of their areas through their procurements. The Scottish Government’s Sustainable Procurement Tools, available to all public bodies, include indicators and guidance to support Scottish public sector buyers to consider and act on a number of climate change and circular economy considerations.

We are committed to taking action on climate change and to develop the circular economy by buying goods and services which reduce emissions, minimise waste and allow for repair, re- use, refurbishment or recycling wherever appropriate. We are looking for ways to reduce how much we buy as that will impact directly on the emissions and waste involved in manufacturing, logistics, distribution and servicing. Given we routinely buy on behalf of others, many of these decisions are influenced by our stakeholders and budget holders. We are exploring a range of ways to influence, support and track progress.

As per SPPN 3/2022: Public procurement - taking account of climate and circular economy considerations, we will prioritise and take account of climate change and circular economy in our procurement activity and report ongoing progress against these commitments in our public sector reporting on climate change and in our Annual Procurement Report. This is demonstrative of how we are using procurement to support Scotland’s response to the global climate emergency and drive a fairer and greener future.