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May 21, 2014

Procurement power

A whopping £9bn of taxpayer’s money is spent each year on procuring goods and services in order to deliver our current system of public services. That gives Scotland’s public purse the potential to be a powerful force for good in terms of how that money is spent and where. The extent to which this potential is anywhere near being realised has been the subject of great debate for many years and last week the Scottish Government’s new Procurement Bill came before Parliament. Looks like those who were pushing for radical changes in the system might end up disappointed.



Robert Armour, TFN

The Scottish Government has missed an opportunity to ensure more Scots are paid a living wage and that the £9 billion it has to buy goods and services each year is spent ethically.

Charities and civil society bodies that united to campaign for new laws to ensure more ethical use of government budgets have said they are disappointed in the final Procurement Reform Act, passed this week.

A coalition of organisations including the Scottish Catholic International Aid Agency (SCIAF), Stop Climate Chaos Scotland, the Scottish Trades Union Council (STUC) and the Scottish Council for Voluntary Organisations had called for the act to ensure all companies that provide services to local or national government pay the living wage.

They also called for penalties on companies for tax evasion and aggressive tax avoidance, and urged for suppliers to publish annual assessment of their carbon emissions.

How billions of pounds of public funds are spent in Scotland has a huge impact on the public sector’s carbon footprint – Gail Wilson, Stop Climate Chaos Scotland

“SCIAF, and others in the third sector, view the final act as a lost opportunity to make a huge difference to poor communities around the world,” said Philippa Bonella, head of communications and education at SCIAF.

“It could have sent a clear signal to public bodies and business that they must consider the global impact of their purchasing decisions and actions. That opportunity has been missed.”

A last minute Scottish Labour Party amendment to make paying the living wage a compulsory part of all public sector contracts was rejected during the final debate on the act, with the Scottish Government claiming it would breach EU law.

Instead, the act calls for the creation of guidance from public agencies on their policy towards the living wage, such as whether they will give preference to companies that pay staff the salary. The living wage is currently £7.65 an hour, while the national minimum wage for over 21-year-olds is just £6.31.

STUC said it welcomed the progress made on the living wage but had hoped for more.

Dave Moxham, deputy general secretary of the STUC, said he was: “disappointed at the Scottish Government’s interpretation of the advice it received from the European Commission which has led it to miss an opportunity to take the strongest possible action to protect low paid public service workers, the majority of whom are women.”

Green groups also said the Scottish Government has failed to ensure the new laws help Scotland reach its climate change targets of reducing greenhouse gas emissions by 42% by 2020 and 80% by 2050.

Gail Wilson, coordinator of Stop Climate Chaos Scotland (SCCS) said: “SCCS is disappointed that MSPs did not grasp the opportunity to embed ethical and sustainable procurement practices in the legislation.” 

“How billions of pounds of public funds are spent in Scotland has a huge impact on the public sector’s carbon footprint so this does need to be addressed.”

The charities are now urging the government to create strong guidance following the publication of the act to ensure that contractors are as ethically accountable as possible.

Some important amendments did make the final act following the stage three debate on Tuesday, including measures to reduce inequality.

Public bodies granting contracts will be allowed to show preference to companies who who reduce inequality in their area. This could be through, for example, offering apprenticeships or improving pay.

Bids for contracts such as school meals will also have to show how their services will improve the health and wellbeing of the local area.