Select Committee on Environmental Audit Written Evidence


APPENDIX SIX

Memorandum submitted by Metropolitan Borough of Wirral

1.  INTRODUCTION

  1.1  Wirral is a peninsula of 60.35 square miles on the North West coast of England, bounded by the Cheshire Plain, the Dee Estuary, the River Mersey and the Irish Sea. The Metropolitan Borough of Wirral was formed in 1974, following the reorganisation of local government by the amalgamation of the County Boroughs of Birkenhead and Wallasey, the Borough of Bebington and the Urban Districts of Hoylake and Wirral.

  1.2  It is a very large, complex organisation with some 13,000 employees (including teachers) to provide a comprehensive range of services to Wirral residents. It is by far the largest single employer in the area.

  1.3  Wirral is the ninth largest metropolitan district in the country, the third largest in the north west of England. It comprises 25% of the Merseyside area. The other four local authorities which make up Merseyside are Liverpool City Council, St Helens Metropolitan Borough Council, Knowsley Metropolitan Borough Council and Sefton Metropolitan Borough Council.

  1.4  The Authority has an annual budget of £336 million and is responsible for the management of the Merseyside Pension Fund presently totalling some £3 billion.

  1.5  The Corporate Procurement Support Unit (CPSU) was created in October 2003 to manage the Council's £160 million spend on its products and services. The Procurement Strategy was approved by Cabinet in December 2003. To achieve the objective that "all major procurement will recognise the impact on the social, economic and environmental wellbeing within the Borough" and in concert with the National Procurement Strategy, the CPSU have produced a Sustainable Procurement Policy which was approved in December 2004. This policy provides guidance for staff to "green" their purchases to support our Environmental Management System and national environmental objectives.

2.  THE METROPOLITAN BOROUGH OF WIRRAL RESPONSE TO THE INQUIRY

  2.1  The Inquiry outlines a number of key issues to which it requests evidence. Each point is stated below separately giving the original question and the response.

2.2  Is there a clear overall strategy within Government for implementing a sustainable procurement policy?

  2.2.1  The National Procurement Strategy suggests "Every Council should build sustainability into its procurement strategy, processes and contracts". It does not prescribe how this should be incorporated or to what extent.

2.3  How coherent and effective is the guidance made available to departments, non-departmental bodies and local authorities on this issue?

  2.3.1  Guidance in this area comes from a variety of sources.

  2.3.2  The Local Government Task Force (LGTF) gives advice about incorporating sustainability into construction.

  2.3.3  The Improvement and Development Agency (IDeA) have produced a comprehensive document on "Sustainability and Local Government Procurement". This outlines how local authorities can implement a sustainable procurement policy. It suggests a risk-based approach, focusing on specific categories of spend.

  2.3.4  The Department for the Environment and Rural Affairs (DEFRA) and the Office of Government Commerce (OGC) have produced guidance in response to the requirement in November 2003 for all central government departments to set "minimum environmental standards". This guidance outlines a number of "quick wins" based on products common to government departments and gives the specification for the minimum environmental target.

  2.3.5  The National e-Procurement Project has also produced guidance on a Legal Framework for sustainability of the local economy. This does provide useful guidance and real examples where sustainability has been incorporated into contracts.

2.4  Are the roles and responsibilities for dealing with sustainable procurement clear?

  2.4.1  IDeA suggest leadership by members and senior managers and implementation of the policy led by the Head of Procurement. Chief Officers who undertake procurement activity, particularly in the area of construction also have a significant role to play in developing specification. Chief Finance Officers also have a responsibility to encourage the consideration of whole life costs when allocating budgets.

  2.4.2  I would also suggest that the Environmental Manager and/or LA21 officer have a role to play in ensuring that procurement activity compliments environmental policy and the community plan.

2.5  What scope do EU Regulations allow for environmental considerations to be included in public purchasing policy?

  2.5.1  IDeA guidance advises procurement staff to incorporate environmental issues at the specification stage. This allows the tender to be evaluated according to compliance with specification (amongst other criteria). This satisfies EC public procurement rules. Environmental criteria can be used as award criteria but the Procurement Officer must ensure it is relevant to the contract and objective or they could leave themselves open to challenge. There is still uncertainty regarding the extent or weighting that can be given to environmental criteria and also surrounding the use of ecolables (for example in specifying Forest Stewardship Council (FSC) timber, we must state "or equivalent" and consider all responses claiming "sustainable forest source" equally, even though some sources cannot be substantiated as "fully sustainable").

  2.5.2  The Commission of the European Communities has produced a Commission Interpretative Communication on the Community Law applicable to public procurement and the possibilities for integrating environmental considerations into public procurement. This provides guidance for procurement personnel on formulating specifications, the use of ecolables, specifying production process, prescribing primary materials and consideration of whole life costs.

  2.5.3  It is left to the contracting authority to find a balance between financial considerations and "greening" their purchases. The Commission recommends requesting variants (with perhaps a higher environmental performance) to allow consideration of "green" products where additional cost is outweighed by the environmental benefit. This can often prove difficult for procurement staff to implement without a set policy by either the Local Authority or the Government due to the delegated nature of budgetary control.

2.6  To what extent does the UK Government's public procurement policy fully exploit this scope?

  2.6.1  The National Procurement Strategy outlines strategic objectives for "Stimulating markets and achieving community benefits" advising councils to "use procurement to help deliver corporate objectives including the economic, social and environmental objectives set out in the community plan". This includes a target to "build sustainability into the procurement strategy, processes and contracts".

  2.6.2  The advice given on "how" to achieve these community benefits is limited to a few lines on whole life costing and risk based strategies to include environmental requirements in the specification. However, it does refer the procurement officer to the IDeA for further guidance in Annex D.

2.7  How are the public sector efficiency proposals in the Gershon Review likely to impact on the implementation of a sustainable procurement policy within both central and local Government?

  2.7.1  The Gershon Review defines efficiency in terms of reducing the number of inputs, creating additional outputs and enhancing the quality of service. The emphasis on "lower prices for resources" has concerning implications for procurement staff who recognise the need to account for whole life-cycle costs, not just the lowest purchase price. The Review sets out savings over a relatively short three years, putting pressure on procurement staff to realise savings over the short term, rather than looking at more long term, sustainable options.

  2.7.2  Gershon also suggests "aggregating Public Sector demand in a strategic way with the supply sector, thereby enabling the supply side better to anticipate and plan for shifts in the public sector demand". Concerns were raised during the initial consultation that encouraging aggregation and the use of consortia could be contradictory to the strategic objective of "using procurement to help deliver corporate objectives including the economic, social and environmental objectives set out in the community plan" as outlined by the National Procurement Strategy. Through aggregation of demand and the creation of large regional "super contracts", we could be excluding local SME's and the voluntary sector, although the Centres of Procurement Excellence have a Local Economies workstream whereby Local Authorities can meet, discuss and implement policies that balance objectives that on first sight can appear contradictory.

  2.7.3  Sustainability involves environmental, social and economic factors over the long term. It may be necessary for Local Authorities to put measures in place, where savings may not be fully realised in the short term, therefore not conducive to the drive for short term savings as emphasised by Gershon (the example of the energy efficient light bulb having a higher initial price but lower running costs over a longer life cycle illustrates this point).

2.8  How might the inclusion of environmental specification in the procurement process be affected?

  2.8.1  Inclusion of environmental specification (for the raw material, product performance or manufacturing method) in the procurement process can lead to a more costly initial purchase price. This cost can usually be outweighed by environmental, social or economic benefit, however, this is difficult to allocate a "cash" saving to. Often, an environmentally friendly product would have greatly reduced disposal costs if the product components can be recycled or, as in the example above, the running costs are reduced through energy efficiency.

2.9  Is the Office of Government Commerce's £3 billion cost-saving target likely to have a detrimental impact on environmental considerations?

  2.9.1  The pressure to realise significant savings in the short term could be detrimental to the aim of long term sustainability as the focus for the Procurement Officer is lowest initial or short term cost. The Government have indicated their commitment to sustainability and set targets in place to improve environmental performance of public sector purchases (for example, recycled copier paper and carbon emissions on vehicles). However, without mandatory levels of minimum environmental specifications (currently only "recommended" environmental specification in the quick wins list compiled by the OGC), Procurement Officers will be more concerned with lower cost, shorter term options to achieve Gershon's efficiencies.

7 February 2005


  


 
previous page contents next page

House of Commons home page Parliament home page House of Lords home page search page enquiries index

© Parliamentary copyright 2005
Prepared 13 April 2005