Community Benefit in Public Procurement April 2010

… The first question that we should ask when developing any contract specification should be: ‘Can we include a Community Benefit clause?’ John Swinney, 19th March 2010

Community Benefits – Legal Position Require Compliance with EC Treaty Principles – Equal Treatment, Transparency, Proportionality, Mutual Recognition, Confidentiality – no local preference Public Contracts Regulations (Scotland) Regulations 2006, Regulation 39 (1) A contracting authority may stipulate conditions relating to the performance of a public contract, provided that those conditions are compatible with Community Law and are indicated in - (a) the contract notice and the contract documents; or (b) the contract documents (2) The conditions referred to in paragraph (1) may, in particular, include social and environmental considerations.

Social Considerations Issues that impact on society or parts of society including: Community Benefits Core Labour Standards Equality Fair Trade Small and Medium Enterprises (including Third Sector organisations), Workforce Skills (including Adult Basic Skills)

Community Benefits - Policy Overarching requirement of value for money“ the optimum combination of whole life cost and quality to meet the end user’s requirements.” Public Bodies may have powers and policies enabling them to address social exclusion, including “well-being” powers For example: Use of Community Benefit Clauses on relevant capital infrastructure projects to ‘Achieve a legacy for Glasgow from the 2014 Commonwealth Games’

Potential Stakeholders Internal Elected Representatives Corporate Management Strategy Development Procurement Economic development Housing and Regeneration Employability Education and Skills Justice Legal Equality External Industry Bodies Suppliers Employability Organisations Job Centres Training Providers Business and Third Sector Intermediaries Business Development organisations Peer groups that already use community benefit clauses

Glasgow City Council (GCC) Approach GCC developed their approach based on the work done by Raploch URC in the original Community Benefits in Procurement Programme. Three strands of community benefit: Targeted Recruitment and Training Supply Chain Development Developing Social Enterprises

GCC Community Benefit - Process Community Benefit ‘clauses’ within all major relevant tenders, initially focused on 2014 projects, now reviewing all Glasgow City Council procurement Community Benefit to account for 10% of overall tender evaluation Evaluation process from initial PQQ stage through to interview and final selection. Best case scenario - an ongoing partnership agreement in delivery. Similar process followed by original pilot participants- e.g. Glasgow Housing Association

Procurement Process Contract Notice (Advert): – Include Community Benefit as core to the subject matter of the contract PQQ requirement: –Demonstrate where you have delivered or been involved in the delivery of Community Benefit or a skill relating to community benefits using specific examples e.g. training of new staff, training of existing staff. ITT requirement: –Demonstrate the Community Benefit to be achieved through the delivery of this contract and the overall management process Contract Management –Implement and Monitor clauses

Achievements Scottish Government launched guidelines on Community Benefit Clauses in Public Procurement in February 2008; Guidelines were based on 5 pilot projects which are delivering high levels of new training and employment opportunities in Scotland; Approach is now being embedded in a range of projects in Scotland. For example: Glasgow City Council – commitment to new employment places through Commonwealth Games contracts, for example the Athletes Village, in excess of 120 employment opportunities. Greater Glasgow and Clyde - new Southern General Hospital project has a commitment to 250 new training and employment opportunities; Advertising sub-contracting opportunities is also achieving opportunities for a wide range of businesses including social enterprises.

Who’s Using Community Benefit Clauses Central Government - Scottish Government contracts for the national Energy Assistance Programme and the Scottish Crime Campus Health Boards: Greater Glasgow and Clyde contract for the new Southern General Hospital (target of 250 new entrants trainees and Social enterprise development in catering, recycling and transport sectors) Local Authorities - Glasgow City Council for Commonwealth Games contracts (current contractual commitment of over 160 new entrant trainees) Regeneration Organisations - Raploch Urban Regeneration Company, Stirling (contractual commitment of 225 new entrant trainees) Registered Social Landlords - Glasgow Housing Association (to date more than 1400 new opportunities created)

Lessons Learnt Community Benefit clauses can be legally included in public procurement projects Contract suitability and capacity needs to be assessed on a case-by-case basis Community Benefit clauses form a significant part of the procurement process TR&T clauses require knowledge and understanding of supply-side arrangements Projects benefit from a project champion with adequate resources and high-level backing Include Community Benefit considerations at all stages – strategy formulation, advert to implementation ‘Cut your teeth’ on a small contract Set firm and realistic expectations

Lessons Learnt continued … Develop and monitor precise requirements –PQQ – information on previous recruitment and training activity –Tender Process - Submit employment and training method statement as part of tender –Include employment and training targets in the KPIs Consider formation of working groups linking authorities, contractors and training sources Support and funding is often available for TR&T and supplier development A large amount of path-finding work has been carried out to assist organisations new to this field

The Challenge Identify the products and services that your authority procures that generate the greatest social risk and have the greatest capacity to enhance social outcomes.

Scottish Government Links Community Benefits in Public Procurement Report: Community Benefits in Public Procurement – Guidance Note for Buyers: Scottish Sustainable Procurement Action Plan: PNSSPANS/policy-notes/sppn0709

Possible Sources of Help The Scottish Government ‘Ready For Business’ Programme: Targeted Recruitment and Training : Regeneration Agencies Sector Skills Councils SME and Social Enterprises: Supplier Development Programme Ready for Business (see above) Business organisations