Benefits of procurement reform in construction

A range of beneficial changes are afoot, says Graeme Ogilvy. Picture: Getty
A range of beneficial changes are afoot, says Graeme Ogilvy. Picture: Getty
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CITB Scotland takes a client-based approach to help embed employment and skills, one which is being used by local authorities through procurement processes and which has earned high praise from MSPs and stakeholders.

Politicians and local authority representatives gathered to hear about the work that this bespoke approach and its recommended guidance is undertaking, with eight local authorities and housing associations, to increase the effectiveness of procurement processes. The client-based approach guidance has been commissioned by CITB Scotland to provide the working documentation for local authorities and other bodies procuring construction projects to embed employment and skills, right through from policy and strategies to procurement and operational implementation. It also explains how progress towards the outcomes can be monitored.

Bill

The event coincided with the introduction of the Procurement Reform Bill to the Scottish Parliament. The Bill will establish a national legislative framework for sustainable public procurement. It places a small number of duties on contracting authorities regarding their procurement activities and some measures aimed at promoting good, transparent and consistent practice in procurement.

A critical element of the Bill will be the introduction of community benefit clauses, which will require a contracting authority to include training and recruitment criteria into public contracts. So far, the Scottish Government has stopped short of making guidance such as the client-based approach mandatory, but it remains an example of best practice to public sector procurement practitioners.

Procurement by government, as the largest client of construction, will be a vital tool in bringing the 2,800 people a year needed into the construction industry in Scotland by 2017.

In Scotland there have been significant savings in the first phase of procurement reform. Audit Scotland estimated that by the end of 2007-08 the reform programme had directly delivered £327 million-worth of savings and benefits. The Scottish Government’s annual efficiency outturns show that by 2009-10 that figure has risen to almost £800m.

The Procurement Reform Bill marks a really exciting second phase to procurement reform – focusing on driving social and environmental benefits, innovation and a fairer procurement system for contractors to deliver these opportunities. But in order for these reforms to be successful new legislation will need to be supported by innovative solutions from industry – working with local government to drive training, employment and ultimately economic growth through procurement.

Making ambition a reality

Client-based approach guidance and advice, such as that we are providing in Scotland, does just this, and will make this ambition a reality. The guidance addresses procurement, legal and contractual issues and provides a simple framework for procuring public bodies, their contractors and the supply chains to drive skills outcomes through government procurement.

Importantly it will also drive apprenticeship numbers across construction. Giving young people the chance to channel their talent, enthusiasm and energy into sustainable and rewarding employment is critical to Scotland’s future economic success.

The Scottish Government has committed to delivering 125,000 Modern Apprenticeships over the course of the current parliament – and we want construction to play its part. At our event, both South Lanarkshire Council and Fife Council provided audience members with presentations about how the CBA has helped to strengthen community benefits within their own public procurement contracts.

As well as the eight local authorities and housing associations already using the guidance, seven are about to and ten others are pending. To date, 50 apprentices have gone through client-based approach participating colleges – with an 80 per cent completion rate, above industry standard.

This approach ensures growth and sustainable jobs through better skills provision in procurement for local and national government, in a way that construction can deliver.

CITB is successfully rolling out the approach with local and national government across Scotland which will help deliver the ambitions of the Procurement Reform Bill by generating new training and employment opportunities through public procurement.

We want to give public bodies the opportunity, as “clients” procuring works and services, to leverage training and employment opportunities from construction.

• Graeme Ogilvy is Scotland Director, CITB Scotland, www.citb.co.uk

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