Fairness through progressive public sector spending

Progressive procurement can lead to greater fairness as well as provide a boost to local economies, says Neil McInroy, chief executive of CLES.

In these austere financial times the public sector is tending to look inward, hunkering down and focussing on direct financial efficiencies and cost savings.  As a result, in local government the cuts have resulted in some loss of focus on effectiveness, especially in relation the aims of equality and fairness.

However, we must also consider the greater prize, where we innovate and make inroads into reducing or eliminating demand on public services in the first place, whilst advancing even greater levels of equality and fairness.  We believe there is a key role for considering the indirect fairness and equality benefits afforded by the buying of goods and services (procurement).

Local government delivers things directly, like social services, schools and parks.  However, they also buy things like social service contracts, schools desks and grass machinery. This buying of goods and services can contribute to fairness.  It can virtuous.  Indeed, we believe, if done right, it can be used to encourage progressive inclusive practices in wider supplier behaviour which in turn support local economies, deprived communities and equality groups.

The Centre for Local Economic Strategies (CLES) (see here and here) has been working over the last six years on how public goods and services are commissioned and bought.  For us, the key to advancing fairness is through a ‘whole place’, local authority ‘corporate’ perspective.  A single department should not make a procurement decision in isolation, especially not when solely based on efficiencies.  The buying of public goods and services cannot, and never should be, just about money saving, it must also be about a corporate focus on questions of fairness and equality.

Procurement and tender briefs for goods and services must encourage and stipulate the requirement for contractors to add value beyond the immediate utility of the goods or service delivery.  Whilst the much vaunted social value act and economic and social clauses are useful means of delivering upon these wider benefit aspirations, informal relationships and voluntary arrangements between local authorities and suppliers throughout the supply chain are of equal, if not more importance.  This can change supplier behaviour by linking suppliers to wider fairness and equality aspirations for places, beyond the narrow confines of merely proving the good or service.

It is clear from our work that progressive procurement policies which are receptive to and considerate of local fairness can have a number of advantages as regards creating and safeguarding local jobs, creating new businesses, enhancing local spend, boosting local economies and advancing equality and fairness in service provision and in principles of equality within the supply chain.

We have found that it is often harder to address questions of ensuring equality groups are supported.  Nevertheless in a CLES publication, we made a plea as to how procurement activity and commissioners should start addressing questions towards the needs to specific groups. We highlighted the need for greater choice, where procurement identifies gaps in service provision and contracts with representatives from equality groups. We also pinpointed how questions of diversity need to be embedded in procurement, to ensure equality groups and communities are involved in the design and delivery of services.

There is no mystery here, only the will.  It is about advancing fairness, developing a process, an understanding and working in different ways, within the context of existing procurement legislation and practice.  Of course there are legal procurement and commissioning rules.  However, this work demonstrates that what may seem inflexible and a barrier to innovation and progressive thinking in public service delivery can be overcome by better practice.  So the challenge is not necessarily legal, the challenge is centred around changing the culture of local authorities to become less risk adverse, and to embrace progressive procurement for greater fairness and local benefit.  This is a key part of reducing demand on public services.

• This article is based on a think piece commissioned by the British Council, the UK’s Cultural Relations organisation for Equality Exchange, a new forum for exchanging ideas, skills and know-how for adaptive public services that contribute to fairer, more inclusive and more equal societies in the Nordics and the United Kingdom. The full think piece is available at http://www.britishcouncil.org/denmark-projects-equality-exchange.htm