On 1 March CLES and Manchester City Council launched ‘The Power of Procurement II: the policy and practice of Manchester City Council 10 years on’.
Some of the key achievements include:
- Direct spend through procurement into the Manchester economy has increased from 51.5% in 2008/09 to 73.6% in 2015/16; with spending across wards diversifying;
- Spend in areas of deprivation has decreased from 47.6% to 39.6% suggesting improvements in those neighbourhoods;
- Direct spend with SMEs has increased from 46.6% to 53.3%;
- Supplier re-spend back in the Manchester economy has increased from 25p in every £1 in 2008/09 to 43p in every £1 in 2015/16;
- Suppliers are delivering a wide array of economic, social and environmental impact through procurement;
Read more on the CLES website.
An update on Manchester City Council’s creation of social value through procurement activity:
Over the course of the last ten years, Manchester City Council has been at the forefront of progressive policy and practice around procurement. With an annual spend of over £600million, Manchester City Council has sought to ensure that every procurement decision it makes brings maximum benefit for the economy of Manchester and its residents. This means working with and utilising Manchester businesses to provide goods and services and ensuring that organisations providing goods and services (regardless of where they are based) bring social value including through creating jobs and apprenticeships, creating volunteering opportunities and reducing carbon footprint.
The work of Manchester City Council around procurement has involved a number of activities. First, they have developed a procurement policy statement which not only considers traditional factors such as cost and quality, but also ensure bidders for contracts consider social value. Second they have embedded the city’s corporate priorities into the procurement process, so that suppliers are actively encouraged to contribute towards achieving them.
Third, through work with the Centre for Local Economic Strategies (CLES), they have actively measured where their procurement spend goes in geographical terms, and what wider impact it has on Manchester in economic and resident terms. As part of this work there has been a focus on monitoring and increasing spend with SME’s which reached £246m in 2015/16 and equates to 56.5% of spend with the Council’s top 300 suppliers. This compares with the government’s most up to date figures of 27% in 2014/15. And fourth, they have undertaken an array of work with Manchester based business to increase their skills and capability to bid for opportunities and also ensure their provision of goods and services brings maximum benefit. This has included: simplifying documents, hosting meet the buyer events, developing supplier networks, and visiting suppliers in areas of deprivation to promote the importance of social value.
The work described above and much more has impacted on the behaviour of procurement officers, the relationship of the City Council with business in Manchester, and has ultimately increased levels of investment with Manchester based business. The work around progressive procurement by Manchester City Council is far from done – procurement decisions are made with a minimum of 20% of the contract award score allocated to social value and Manchester City Council has recently launched an Ethical Procurement Policy.
Relevant documents can be downloaded from the Greater Manchester Chamber of Commerce website
Matthew Jackson is the Chair of GMSVN and the Deputy Chief Executive of the Centre for Local Economic Strategies (CLES)
At the Greater Manchester Social Value Network (GMSVN) we are seeking to ensure that social value is embedded in everything that Greater Manchester as a place does. That means social value being at the heart of Greater Manchester strategy and embedded in the DNA of the public sector, businesses and the voluntary and community sector.
Just one component of that whole place approach to social value is the process of commissioning and procurement. If public authorities design goods and services with social value as a central plank, then the delivery of those goods and services are much more likely to bring a dividend in terms of social value outcomes.
Greater Manchester has a great framework for embedding social value into commissioning and procurement processes in the form of the Greater Manchester Social Value Policy, which has been in place since October 2014. This sets out six key outcomes which the process of commissioning and procurement can and should be contributing towards beyond the delivery of the good or service.
To date, the Policy has been successful in changing the behaviour of predominantly procurement teams in Greater Manchester’s ten local authorities. The challenge, however, with the Policy has been ensuring that its principles are embedded not only in the pre-contract considerations and behaviour of all public sector commissioners and procurers; but also in the subsequent behaviour of the supply chain. There are a number of ways in which commissioners and procurers can use the principles and outcomes of the Policy (these broadly follow the cycle of design and delivery of services of goods and services):
- Commissioners should consider the outcomes of the Policy right at the outset of the design of the good or service. In this they should be asking themselves which of the outcomes are appropriate to that particular good or service, and how the delivery of that good or service can potentially contribute to the achievement of those outcomes;
- Procurement teams should generally detail the outcomes of the Policy in their tender documentation, so that potential suppliers are aware of them;
- Where specific outcomes have been identified through the commissioning process for a particular good or service, questions should be asked of potential suppliers in their tender responses as to how they will deliver against them;
- Procurement teams when evaluating tender documents when evaluating tenders should score against the social value questions, much in the same way as they do for cost and quality;
- In the delivery of goods and services, suppliers should then ensure that they are delivering against social value outcomes and seeking support from voluntary and community sector organisations to do so, where appropriate;
- Suppliers should also be asked to come up with any proposals of their own that draw upon their ingenuity and ability to innovate to deliver better social value outcomes recognising that commissioners don’t know what they don’t know.
- Contract managers should monitor on a regular basis the achievement of social value commitments by suppliers, much in the same was as they would do for progress against budget and timeframes;
Embedding social value into commissioning and procurement does not need a re-invention of the process; it simply requires a shift in behaviour in the relevant elements of commissioning, tendering, delivery, and monitoring. Short term change will lead to longer term benefits and outcomes for the Greater Manchester economy and its residents.