Last Thursday we took the impressively on-time train service from East Midlands Trains up to Leicester for a one-day seminar on Socially Sustainable Public Procurement organised by the Leicester University Law School. There were around 30 delegates, a mix of academics, procurement lawyers and procurement practitioners, that group coming largely from local government and universities.
We did a quick summary of the event here on our Spend Matters UK/Europe website. But today let’s look in more detail at the keynote session from Professor Sue Arrowsmith of Nottingham University , the most highly regarded academic lawyer on public sector matters in Europe, we would say.
Her topic was sustainable public procurement, both the current landscape and the implications of Brexit. Historically, the attitude to ”sustainability” as a priority in public procurement has been a pendulum. The 1970s saw it getting popular in local government in the UK; for example, sanctions against South Africa. But it was largely ignored in EU law.
In the 1980s, under PM Thatcher, we in the UK saw more focus on value, and indeed central government clamped down on local authorities using procurement in this way. But it was still ignored by EU law. By the 1990s, it was still unpopular in the UK, and now the EU Commission started considering it – but agreed with the UK and continued to focus more on priorities such as value, transparency and openness.
But the 2000s saw a change. That was under “New Labour” in the UK, who wanted procurement to address all sorts of wider issues. Having been involved personally at this time, it got to the point of overload, but Peter Mandleson for Labour and then Francis Maude for the coalition government in 2010 got it back to a manageable state. But now the Commission was getting interested in the agenda too, and specialists in environmental, labour and social policy issues got involved.
Arrowsmith argued that we really need to look at specific cases to assess the sustainability issues. What are the costs, what are the benefits? There are real costs to contracting authorities and the supply side; our sustainability demands may deter participation or increase prices. We might see less competition, more complexity for buyers, and higher prices. There is a fundamental question here; is public procurement the right way to achieve the desired benefits? There are other routes (legislation, taxation, persuasion …)
We should also realise that greater discretion opens up the possibilities for corruption – the opportunity to set sustainability requirements to favour some suppliers, or abuse of power in decision making e.g. in the potentially subjective assessment of the ability to deliver social benefits. (this is a big personal worry; anyone who reads Private Eye will understand that local government in the UK has its fair share of bad apples, for instance).
But Arrowsmith accepts there are concrete benefits from effective sustainability focus, such as creation of jobs for disadvantaged groups. There is also the benefit via government bodies “setting an example and changing public attitudes”, and of course removing unfair competition. Firms who don’t comply with basic rights should not be able to undercut decent businesses and win public contracts.
There can also be tensions between different policies e.g. promoting SMEs (smaller firms) versus social and environmental benefits. So we could see costs to SMEs without resulting benefits, particularly if the policies are in reality simply “tick-box” in nature. .
So how do you design effective sustainability policies? Procurement is a soft target in effect for politicians. It looks good, plays well with voters but the costs are invisible – we just don’t know the cost of these policies. If you said “we’re giving a grant of £5 million” to support a policy then people would ask questions, but the equivalent cost in procurement spend is hidden. So we do need to think about whether other policy tools are more effective in achieving policy goals. And few organisations really evaluate the costs and benefits – the limited amount of academic research in different countries has come up with little tangible evidence of success.
So, a bracing view from the professor; we will be back with part 2 when we will look at her thoughts on how to make sustainable procurement more effective, and also what she thinks Brexit will mean to this agenda and indeed public procurement more generally.