Using public procurement for a fairer Scotland

30365772_sMore than £10bn of Scottish taxpayers cash goes on buying goods and services in the private sector. This procurement activity could do much more to deliver the Scottish Government and other public bodies policy aims.

Last year the Scottish Parliament passed the Procurement Reform Act and the EU passed a new Procurement Directive. These provide a framework for a new approach to procurement, but need to be transposed into regulations and guidance to make it work on the ground. Procurement is a devolved matter and it has has to be said that the Scottish Government is making a much better fist of implementation than their UK counterparts. However, progress is slow and the approach is still too cautious and risk adverse.

A key objective for trade unions has been extending the Scottish Living Wage through procurement. The Scottish Government has a good record on supporting the living wage, but procurement has always been the weak point. We had expected the Procurement Reform Act statutory guidance on the living wage to be in place by now. However, this has been delayed. As an interim measure a Scottish Procurement Policy Note, ‘Evaluating employment practices and workforce matters, including living wage, in public contracts‘ has been published. While this is not as good as statutory guidance and has some omissions, it does explain how public bodies can legally ensure the living wage and other employment matters are included in contracts.

In local authorities in particular, legal and procurement advice has persisted with the erroneous position that the living wage and other workforce matters cannot be included in contracts. This policy note is helpful in challenging that advice and includes a practical case study piloted by the Scottish Government and model specifications.

The Local Government in Scotland Act introduced provisions, known as s52 guidance, that is supposed to end the Two Tier workforce, ensuring that council contractors pay the same wages and offer similar terms and conditions to directly employed staff. New evidence that councils are ignoring the requirements of s52 comes in The Third Annual Report Scottish Local Government Benchmarking Framework. They report an 8% increase in privatised social care services and this, “has contributed to reduced costs through lower salary and pension costs”. There could not be a clearer admission of unlawful procurement in an official report. On many occasions the STUC and individual unions have raised with ministers the need to promote and enforce these provisions. Sadly, little has happened and again it is not even mentioned in the new advice note.

The Scottish Government has also published a consultation on the transposition of the latest EU Procurement Directive into Scottish procurement regulations. There are a number of options available to ministers and we will be pressing for a much more radical approach in line with the ‘Ten Asks‘ we promoted with a network of civil society partners during the Procurement Reform Act’s legislative journey.

A good example is tax dodging. As I explained in the Sunday Herald, the consultation paper is weak on this point and the Scottish Government could do much more. For example, by adopting the Fair Tax Mark. A Scottish company, SSE was the first company to sign up to this. Similar initiatives could make a real difference in promoting stronger environmental action, development goals and fair trade.

It isn’t possible to specify everything we would want explicitly in procurement regulations. However, it is possible to change contractor behaviour by spelling out the standards we expect from organisations who take the public pound. That can be a powerful force in promoting the fairer Scotland most of us want to achieve.

This article first appeared at Dave Watson’s blog

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  1. And again I ask, what about your Unison members who live south of the ‘border’ Dave? Mind you, the Scottish government can afford to make ‘good progress’ on a number of things compared to elsewhere given the good old Barnet subsidy from those of us in the south eh!