Select Committee on Environmental Audit Second Report


Memorandum from the Business Services Association


  The Business Services Association is a policy group for major companies providing outsourced services to companies, public bodies, local authorities and government departments and agencies. The combined annual turnover in the United Kingdom of its 20 member companies is around £15 billion. Member companies employ directly and indirectly more than 500,000 people.

  BSA member companies are among the leaders in providing services across the public sector. They are actively involved in the majority of PFI and PPP projects across the whole range of Government Departments and Agencies, NHS Trusts, Local Authorities and Local Education Authorities. As such they are engaged in implementing Government's agenda for modernising public services.

  The Association itself is closely involved in working with Government to develop and deliver the principles for modernising public services. As well as representing the providers of relevant services, all employees of BSA member companies are users of these services. This gives them and member companies a clear perspective on quality and end-user requirements. Those views are reflected in those of the Association in its submissions to Government across a whole range of issues.

  In reference to this particular inquiry, BSA welcomes the opportunity to focus on the required balance regarding fiscal, regulatory and voluntary environmental initiatives and the co-operation between business, government and interested parties to ensure sustainable development.


  BSA recognises the increasing importance of environmentally responsible procedures in private companies and public authorities. However, in the context of procurement, it seems that existing market forces of competition and legal requirements of bidding already form a powerful framework where environmental and social considerations can be taken into account.

  "Green purchasing" as suggested on the EU level offers undoubtedly some possibilities for performance improvement and sustainable development.

  Nonetheless, it is crucial to see these suggestions in relation to the fundamental need of businesses to survive in a highly competitive environment and the necessity of individual, voluntary business development. Therefore, the inclusion of environmental requirements in procurement procedures will not only increase the cost of contracts considerably, especially regarding technical specifications, but will also restrict the scope of innovation, development and investment opportunities for many private companies into the public sector.

  Regarding long term advantages of environmentally friendly policies and the inclusion of social considerations into business decision making and private public partnerships have to be based on a voluntary scheme in order to show more than lip service paid to them. To be effectively applied in practice, private sector companies have to realise for themselves the potential value of competitive advantage, that stems from notions of responsible investment, customer pressure and business reputation. Bureaucratic and complex systems of legal enforcement via environmental taxation or financial penalties will not achieve a business commitment to environmental sustainability.


  BSA members are actively involved in creating strong frameworks for responsible business behaviour as far as obligations to shareholders and business needs allow. A general trend towards increased emphasis on corporate social (and environmental) responsibility also brings to light its advantages for partnership projects as well as individual business objectives. These range from competitive advantage to image improvement to market opportunities and express themselves in the nature of relations between different actors in the supply chain.

  Thus, the role of the Government lies not so much in putting further legislative restrictions on private companies, but in offering incentives for voluntary schemes and creating an overall framework for best practice. It is equally important to evaluate the public authorities in their performance and procedures so as not to create unequal terms of competition between the sectors. A more systematic approach would be welcomed, which addresses current confusions of eligibility for financial support and contradictions in policy aims within government departments.


  Practical application of environmental responsible policies usually originate from business initiatives that aim at combining the need for profit with a wider sense of community awareness. Here it is vital to create the scope for voluntary standard setting, as market forces and attitude changes are often more powerful and direct factors of influence than government regulations and taxation.

  Business awareness of social and environmental issues does exist and in this context, corporate social responsibility is a good example of slow but steady progress. Regarding contract management, private companies are able and willing to incorporate any specifications of environmental issues into the contract, but seem to be more aware than their public partner of the impact on overall cost and nature of the project.


  It has to be acknowledged that the level of business commitment to these issues is as diverse as the business community itself. Therefore, standardisation does not present itself as the way forward and BSA recommends a focus on voluntary standards, set by the business community with the aim of delivering high quality services, fulfilling stakeholders expectations and realising their commitments to the environment and society they operate in.

November 2001

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