Procurement is often seen as a technical issue concerned with process rather than policy. Put bluntly it's boring - only worthy of attention when public money is poorly managed.
But £300 billion of public money is spent annually on commissioned services. This money often goes directly to paying the wages of thousands of workers. For those of us pushing for a more equal society, procurement is definitely worthy of our attention.
Why should we care about procurement?
Public procurement is the process by which public authorities, including local authorities, purchase work, goods or services from companies. Given the huge sums of money spent on commissioned services, and the number of people employed by procured organisations, procurement provides an opportunity to address inequalities – by promoting good work and a Real Living Wage not just as nice-to-haves, but a condition of contract.
Labour shortages within the everyday economy, increasing ill health within our local communities and the adverse effects of "bad" work within our wider communities all suggest that the economy is not working as a whole, underlining the importance of this issue.
The new Procurement Act – an opportunity for change
In October this year, a new Procurement Act 2023 will be implemented. Maximising public benefit is a core principle of the new act – but critics argue that it’s sufficiently vague to be meaningless. In contrast, others would say that the definition has been kept deliberately vague to take account of local democratic policy objectives in decision-making and taking within the procurement process.
If the sector doesn't engage, there's a danger that the Procurement Act's positive potential will get lost in a world dominated by larger private sector companies
Being optimistic, we consider that maximising public benefit is vital. Its inclusion places procurement policy within the wider policy objectives of local councils, housing associations, health authorities and others providing public services at a time of rising inequality and poverty. Setting procurement into this broader context helps make it market-shaping - taking a traditional service to deliver wider policy social, economic and/or environmental objectives.
In addition, the act provides authorities with wide powers to reserve contracts organisations addressing disability and/or disadvantage in the labour market. For example, a commissioning authority has recently published a grounds maintenance contract with the aim of ensuring that this service is provided by an organisation that will provide training, employment opportunities, and a supportive work environment for people with mental health issues. This is market shaping. The authority described this as unique. We need to make such contracts commonplace.
What can we do?
If procurement is to build public good, more imagination and greater engagement from the Voluntary, Community and Social Enterprise (VCSE) sector. The latest Government consultation on new regulations saw only one organisation from the VCSE sector responding. True, the regulations were technical. And true, the new act itself is long and technical. But if the sector does not engage, there is a danger that the act's positive potential will get lost in a world dominated by larger private sector companies, lawyers, and procurement processes rather than delivering public value.
If we are serious about tackling rising inequalities, let’s ask ourselves: how can we contribute to procurement practices that benefit our communities?
Research that #BetterforUs is conducting within London authorities reveals that no authorities currently have a published policy on reserving contracts under current legislation. This opens the door for more authorities to establish policies on this crucial issue before the Act comes into force.
So if we are serious about tackling rising inequalities, let’s ask ourselves: how can we contribute to procurement practices that benefit our communities? At a minimum, we believe that public purchasing should be carried out for public good and that all employees involved in delivering services should at the minimum have Real Living Wages, good work and that traditional services can be used to build more diverse workforces. Let’s get engaged with procurement for public good.