8 Ensure procurement supports environmental and social objectives

UK public spending through procurement is around £150bn a year. The government is rightly concerned that its spending supports its goals of diversity, environmental sustain-ability and innovation. In March 2007, the Office of Government Commerce published the UK Government Sustainable Procurement Action Plan, which outlined specific guidance to help procurers take forward social and environmental issues. This is a step forward in raising the standards of procurement practice.

The CBI supports this approach, but for it to work effectively suppliers need to know from an early stage what the sustain-ability criteria are, how they will be assessed, and the weighting of different factors. Contracts need to be well designed and focused on outcomes and not processes - too many still demand specific processes which have little impact on the overall outcome. Many providers from the private sector already go beyond legislative requirements in taking action on environmental and social issues. We believe:

Embracing diversity and inclusion helps personalise services. The private provider working in partnership to run the Docklands Light Railway (DLR) has taken measures to address equality and inclusion issues in the boroughs the DLR serves. Levels of crime and deprivation are high, with many low-in come families living in high-density housing. The areas have large black and minority ethnic communities - in one borough 102 different languages are spoken. The provider serves this diverse community in a number of innovative ways. It commissioned research to identify ways of improving access to the DLR - feedback from residents suggested lower fares, better security, better station environments and information about job opportunities. As a result, the provider installed live CCTV on trains, introduced patrol officers on the network, and introduced DLR-only travel tickets for local residents allowing short and flexible journeys. The provider also invested £1.5m to launch a Community Skills and Recruitment Centre in conjunction with a charity, which published a guide listing free courses reachable by DLR to help improve local residents' skills.

Well-managed procurement can deliver greener services. The Ministry of Defence's facilities management team worked with a private sector consortium to rebuild offices in a way that made environmental sustainability a design priority. A specialist on sustainability was employed to advise and audit the works. Measures adopted included: recycling the demolition material by incorporating it in the new building works; using natural materials from proven sustainable sources in construction deploying intelligent low energy light fittings; and on-site cycle and pedestrian routes linked to the local transport infrastructure.²³ Such improvements can be harnessed where environmental concerns are mainstreamed in procurement.

Good procurement can drive innovation. While the government has supported the importance of public procurement as a stimulus for innovation, the extent to which there has been any impact in practice remains a serious concern. Findings from the CBI/QinetiQ innovation survey showed that “Current procurement practices not only fail to foster business innovation, but also fail to allow government to maximise long-term value from its investments.”24 Sixty-nine percent of respondents said that government skills were a major problem. Developing better commissioning and procurement so that contracts can better encourage and reward innovation will be a key part of supporting the UK’s economic wellbeing over coming decades.