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John Tizard: Don’t avoid social outcomes in public procurement; these can be EU-compliant

Wednesday November 29th, 2017

Last week when attending the European Public Service Awards (EPSA) Final Event and Awards Ceremony in Maastricht, in addition to meeting, talking with and learning from the many award winners from across Europe it was very encouraging to hear a senior EU Commission official speak about the need to address social outcomes through public procurement.

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John Tizard

In an address to the prize winners and other attendees at the event Florian Hauser from DG Employment, Social Affairs and Inclusion spoke about the important and strategic role that public procurement can play. He emphasised the need to avoid ‘buying the cheapest’ and the desirability of taking wider social issues into account when awarding public contracts.

It was encouraging to hear this from a Commission official even though we knew that it was what the EU Commission and Council of Ministers themselves encourage. Far too often we are told that the EU public procurement regulations prevent such an approach.

Having heard Florian Hauser and applauded his words, I reminded myself of the EU Commission’s publication, ‘Buying Social: A Guide to Taking Account of Social Considerations in Public Procurement’. This was published a few years ago but still makes some very sound points including the following:

  • Socially responsible public procurement (SRPP) is about setting an example and influencing the market-place. By promoting SRPP, public authorities can give companies real incentives to develop socially responsible management. By purchasing wisely, public authorities can promote employment opportunities, decent work, social inclusion, accessibility, design for all, ethical trade, and seek to achieve wider compliance with social standards. For some products, works and services, the impact can be particularly significant, as public purchasers command a large share of the market (e.g. in construction, business services, IT and so on). In general, public authorities are major consumers in Europe, spending some 17% of the EU’s gross domestic product (a sum equivalent to half the GDP of Germany). Therefore, by using their purchasing power to opt for goods and services that also deliver good social outcomes, they can make a major contribution to sustainable development.

The Commission has been developing and refining its guidance on this very important aspect of public procurement and continues to promote a social focus in public procurement. And in October of this year the Commission stated that:

  • Member States are encouraged to develop a strategic approach to procurement policies, focusing on six priorities: greater uptake of innovative, green and social criteria in awarding public contracts; professionalisation of public buyers; improving access by SMEs to procurement markets in the EU and by EU companies in third countries; increasing transparency, integrity and quality of procurement data; digitisation of procurement processes; and more cooperation among public buyers across the EU.

I would interpret the reference to SMEs to include charities, voluntary and community organisations and social enterprises.

The message from the Commission could not be clearer so hiding behind some false claim that the pursuit of social outcomes is inconsistent with the EU regulations is mischievous. It is probably being used to justify lazy and/or price-driven procurement.

In England the Social Value Act places a legal duty on public bodies to take social impact and social value into account when procuring services. It is to be hoped that the Act will be strengthened in many ways including placing the same requirement when the public sector is purchasing goods and to ensure that the Act is applied throughout supply chains.

Such measures should not be designed nor implemented in ways that prevent competition where public competitive processes are required and applied. The fact is that seeking social outcomes is not inconsistent with competition.

Of course, when the public sector is seeking to partner with social and charity sector organisations the use of grant aid may avoid expensive and unhelpful competitive contracting processes.

So whether the UK does actually leave the EU or not it can and should still pursue socially focused public procurement. I wonder if some of those blaming the EU for their own failure to address social outcomes in public procurement do so because they wish post-Brexit to adopt less progressive regulations. Of course, it would be desirable to strengthen requirements to take social, economic, employment and environmental goals into account when spending public money through contracts. But in reality, much can be done now. The pertinent question should be ‘why isn’t it?’

I am grateful to Florian Hauser for reminding me and all of us of this important fact.

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