Memorandum submitted by the Sustainable
Development Commission
1. The Sustainable Development Commission
(SDC) is the Government's independent advisory body on sustainable
development reporting directly to the Prime Minister and the First
Ministers of the Devolved Administrations. The SDC's mission is
to inspire government, the economy and society to embrace sustainable
development as the central organising principle.
2. We continue to have significant engagement
with driving forward the sustainable procurement agenda. Our perspective
is informed by a wide of experience working with both public and
private sector partners, from the NHS through to the National
Consumer Council.
3. In December 2004, the SDC held a workshop
on sustainable public procurement at HM Treasury, with participants
from a wide range of backgrounds. Key barriers to progress on
sustainable procurement included:
— A lack of clarity on the potential
benefits of sustainable procurement.
— The devolution of procurement decisions.
— The omission of sustainable development
principles from public audit mechanisms.
— The need for more systematic adoption
of "invest to save" principles.
— A lack of technical knowledge around
how to "do" sustainable procurement.
— The need of a centralised advice
service for public sector procurement professionals.
— The value of a central source of
good practice.
— The need for a clearer role for Regional
Centres of Excellence.
— A wide misinterpretation of the Gershon
agenda as being solely about cost. We highlighted how concern
on this ran to Ministerial level.
— That targets in the National Procurement
Strategy for Local Authorities are not being met and that there
is a need for the audit process to pick up on this.
— A need for procurement specification
to systematically consider long-term SD impacts.
4. These barriers and challenges are outlined
in more detail in our submission to the EAC's previous inquiry
(dated 11 February 2005). This also stands as the basis for our
current position on this subject, outlining our key concerns and
recommendations for improvement. The key elements of this position
are re-iterated below, along with some new developments, and additional
areas of opportunity and challenge.
PUBLIC SPENDING
FOR PUBLIC
BENEFIT
5. We stand by our previous submission that
public spending—at over £125 billion per year—should
be spent for public benefit and sustainable outcomes. Whilst there
are isolated, good examples where individual public agencies are
taking a lead on this, time and again opportunities for achieving
wider objectives—poverty reduction, environmental improvements,
and public health, for example—are being missed in the race
for low prices and efficiency.
6. The SDC is concerned that the commonly
used phrase "value for money" is being interpreted across
the public sector in narrow terms, most likely due to the psychological
and organisational impacts of the Gershon efficiency agenda.
7. Taking local government as an example,
the value for money concept is often associated with achieving
"best value". This is defined by the OGC as "the
optimum combination of whole-life cost and quality (or fitness
for purpose) to meet the user's requirement"[6].
The SDC believes that, under pressure from the efficiency agenda,
neither whole-life costing nor quality are systematically being
taken into account in procurement decisions.
8. Current discussion is around an alleged
"conflict of interest" between efficiency and sustainability.
The SDC views this as a myth. Sustainable procurement is about
true, long-term value and requires the assessment of full whole-life
costs of purchasing decisions. Mounting evidence proves that smart
spending—choosing products that support the local economy
of have minimal environmental impact—creates real value
for money and, in the long run, saves money.
9. On this note, the SDC looks forward to
the forthcoming guidance from OGC on achieving social benefits
through procurement, due later this year. We also note a useful
new report from the New Economics Foundation on how the public
sector can use its purchasing power to deliver local economic
development
(http://www.neweconomics.org/gen/z_sys_publicationdetail.aspx?pid=210).
PROGRESS IN
CENTRAL GOVERNMENT
10. We believe that the Government has a
leading role to play in communicating clear and consistent messages
on the benefits, rationale, and necessary mechanisms for achieving
sustainable procurement at all levels across the public sector.
The SDC notes a range of commitments in the UK's Sustainable Development
Strategy (SDS) relating to sustainable procurement, including
a target to, "examine ways to encourage other organisations
to commit to [sustainable procurement targets]" (page 54).
We would expect the outcomes of these commitments to lead to a
measurable step-change in public sector sustainable procurement.
11. Lack of leadership was one of the main
barriers highlighted in our previous submission, and we are therefore
encouraged by a number of recent signals from Government:
— Sustainable Procurement Taskforce.
The appointment of the Sustainable Procurement Task Force—in
which we are actively participating—represents in itself
an important step forward in addressing the leadership deficit
on this issue. We look forward to the publication of their Action
Plan in early 2006, which will need to present a set of very stretching
targets if the UK Government wishes to achieve its stated aim
of becoming an EU leader on sustainable procurement by 2009 (SDS,
page 54).
— Sustainable Operations Board.
This Board was created in June 2005 to oversee the Government's
review of the Framework for Sustainable Development on the Government
Estate—which includes targets relating to procurement. The
Board is tasked with implementing commitments in the UK Government's
SDS relating to the way departments manage their land and buildings.
This represents a further cross-departmental commitment to improving
sustainable development in Government. The SDC believes this review
is therefore a key opportunity for Government to ensure that the
Framework targets are fit for purpose against the aims of the
SDS.
SUSTAINABLE DEVELOPMENT
IN GOVERNMENT
REPORT
12. Securing the Future also contains
a commitment that future SDiG reports will be produced wholly
independent of Government. As part of its new SD Watchdog role,
the SDC now has responsibility for the SDiG reporting process.
Of interest to the EAC's current inquiry, the report will include
analysis of the UK Government's performance on the sustainable
procurement targets for its Estate in 2004-05. We aim to publish
this report at the end of November.
13. Together, the SPTF, the Framework review,
and the new independent SDiG reporting process are welcomed by
the SDC and represent a significant step towards reaching the
Government's stated aims on sustainable procurement.
14. The SDC believes that positive steps
are being taken to incorporate the principles of sustainable development
into the public procurement framework. A very significant cultural,
behavioural, and systems shift will be required, however, before
this objective becomes a reality. We look forward to hearing the
results of your inquiry.
31 October 2005
6 Government Accounting 2000, Office of Government
Commerce.
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