The UK social procurement policy environment – how does Aotearoa stack up?

The UK social procurement policy environment – how does Aotearoa stack up?

An enabling policy environment certainly helps to get both momentum and continuous improvement in social procurement.

Here's a summary of just some of the social procurement policy instruments in the UK.

A 2011 study found that half of all contracting authorities (i.e. all bodies governed by public law such as councils, central government departments etc.) across Europe included socio-economic clauses in their procurements. It was most widespread in the United Kingdom (more than 80% of contracting authorities included these clauses), followed by the Netherlands and Norway (70%). Poland and Slovenia were least likely to include socio-economic clauses; only 30% of their contracting authorities did so. (Maybe Poland and Slovenia have upped their game in the last seven years but even at 30% they're still much further ahead than New Zealand). Many European countries have national policies and plans that enable and promote social procurement, including Austria, France, Denmark, Germany and Belgium, reflecting the “growing policy interest in re-orienting public expenditure towards solutions that are more compatible with environmental sustainability, promote social policy considerations, or support innovation”.

The UK has several public policy instruments requiring a social procurement approach, with Scotland, Northern Ireland and Wales having particularly robust policies.

UK country specific instruments are:

> Public Sector Social Value Act 2012

Places a duty on the public sector in England and Wales to consider social outcomes in the procurement of services (but not goods or works).

> Procurement Reform (Scotland) Act 2014

Places a duty on the public sector in Scotland to secure social, economic and environmental well-being, and opportunities for small- and medium-sized enterprises (defined as having fewerthan 250 staff), when procuring goods, services or works.

> Wales Procurement Policy Statement

Expects the community benefits principle (including social, economic and small- and medium-sized enterprise outcomes) to be applied to all Welsh public sector procurements of goods, services and works where these benefits can be realised. Outcomes for all contracts greater than £2 million must be reported to the Welsh Assembly.

> Procurement Guidance Note (PGN) 01/13 Integrating Social Considerations into Contracts (Northern Ireland)

Requires social outcomes in all Northern Ireland public sector procurements greater than £2 million for construction and greater than £4 million for civil works. Northern Ireland's 'Buy Social' approach will be piloted in services contracts with a value exceeding £500,000. The PGN sets out how social and economic outcomes will be considered as either a non-price attribute (core requirement) or contract condition (non-core requirement). Departments can add their own social or economic goals and extend the inclusion of the Buy Social model to any contract irrespective of value.

At regional and local government level, research in 2016 by Social Enterprise UK found that 1 in 3 English councilsroutinely considered social value in their procurement and commissioning, and 1 in 4 had a social value policy (the report also makes very good points about the importance of legislation compared to guidance). High rates of councils in London and North East England were 'embracers' or 'adopters' (some examples are the Greater London Authority, Manchester City Council and Croydon Council.)

Policy or strategy in itself does not deliver impact or change, after all, a tool is only as good as its user. But it can help tackle lethargy, especially when coupled with targets. Most importantly, it provides mandate for those who want to pioneer a new way of doing things.

The United Kingdom has an enabling policy environment. European countries do too. So do Canada, the United States and Australia. It all begs the question as to why we are so far behind in New Zealand.

But all hope is not lost. At the end of 2020, the Ministers for Māori Development and Economic and Regional Development announced a new target to encourage public service agencies to cast the net wider when awarding contracts. A target of 5% for public service contracts for Māori businesses. Amotai was appointed as the intermediary that will support agencies to connect with Māori businesses.

So, despite being late to the party, we are finally joining the global supplier diversity movement and starting to create an enabling policy environment to create a more inclusive economy here in Aotearoa.