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Director's letter - January 2015

6 February 2015

"How do you sum up five years and seven months?  It was July 2009 that I took up the post of the Scottish Government’s Procurement and Commercial Director.  And at the beginning of February this year, after fourteen years as a civil servant in Scotland, I depart to take up a post at the University of St Andrews.  So this is my last procurement newsletter, and as well as wishing all our readers a very happy New Year, indulge me whilst I reflect back on what has been one of the most interesting, stimulating and rewarding periods of my career.

"Back in 2009, we were digesting the Audit Scotland report, Improving Public Sector Purchasing, which examined the achievements of the first three years of the McClelland reforms.   Lots done, but lots more to do was the overall message – and the same, arguably, could be said today as we embark on the third phase of the procurement reform journey.  Public Contracts Scotland was in its infancy – we celebrated its first birthday with a cake at the October Procurement Conference – and the first round of Procurement Capability Assessments were about to be undertaken.  The 2009 conference saw the launch of the Sustainable Procurement Action Plan and the first articulation of the strategic priorities for the second phase of procurement reform.  Those strategic priorities – improving access, delivering savings and benefits, enhancing efficiency and collaboration, and placing sustainability at the heart of all we do – became the key ingredients of what we now know as the Scottish Model of Procurement.

"Combining those different strands of activity into a single, simple and coherent model has been fundamental to maintaining the profile and momentum of procurement reform.  The concept of using public spend on goods and services as a lever to delivery economic and social benefit has positioned procurement firmly as a strategic enabler of both policy development and service delivery.

"By 2009 the concept of procurement reform being Government led but owned by the Public Sector was already well established, with the Reform Board driving progress and the sectoral Centres of Expertise championing collaboration and capability improvements.  That year also saw the establishment of a project level partnership with business and third sector organisations with the creation of the Supplier Engagement Working Group.  The Group was charged not only with identifying the principal barriers that small businesses and the third sector faced in accessing public contracts but coming up with practical, affordable and legal solutions.  From their work developed ground-breaking initiatives such as the standardised prequalification questionnaire (now embedded in PCS-Tender) and the Supplier Journey toolkit.

"Fast forward five years, and the basic tenets of procurement reform still hold good.  The public sector ambition to deliver a world class service is as keen as ever, and the profile of Scotland’s achievements has never been higher. From our use of community benefit clauses in public contracts through to our leading-edge use of e-commerce, the Scottish Model is inspiring governments and administrations across the world.  Over the last three months alone we have shared our experience with the World Bank, the Australian Federal Government and the Governments of Queensland and Victoria.

"The Procurement Reform (Scotland) Act 2014, passed unanimously by the Scottish Parliament, places a statutory framework around the Scottish Model, and the introduction of the Sustainable Procurement Duty places an unambiguous incentive on all public bodies to look for value beyond savings in how public money is spent.  It establishes across the political spectrum a clear understanding of the basic tenets of how public procurement should be conducted in Scotland.

"The social benefits from public procurement have come increasingly to the fore, and the use of the Living Wage has been the subject of much public commentary, not all of it accurate.  So let me be absolutely clear.  It is not legally possible to make the Living Wage a contractual requirement in a tender (essentially because the Living Wage does not have a basis in statute), so we cannot run a tender competition that guarantees that the successful tenderer will pay their staff a living wage.  But we have devised an approach which can reward tenderers that choose to pay a living wage as part of a package of broader workforce-related matters, but which does not treat it as a pre-condition of contract award.

"Earlier this week we issued policy guidance for how workforce welfare – including the Living Wage - can be considered in the course of a public procurement exercise as key driver of service quality and contract delivery Scottish Procurement Policy Note.  These guidelines go further than any other published in the UK in using procurement to promote fair employment practices.  They will form the basis for the Statutory Guidance under the Procurement Reform (Scotland) Act that will come into force at the end of this year.  We’ll shortly be going out to consultation on the broader provisions of the Act, and on the European Directives.

"Of course, any job has its frustrations, but having once been described in the papers as “relentlessly optimistic” I prefer to dwell on the positives.  I believe that public procurement in Scotland at its best is genuinely world class, and through the Scottish Model we have set clear standards that all public bodies should aspire to.  We have shown how innovation and social good can be delivered through public contracts, and how capability can be underpinned by the systematic use of e-Commerce.  In this context, I was delighted to learn earlier this week that that Scottish Water has been awarded CIPS Corporate Certification Advanced Standard Platinum Award - the first organisation in Scotland, first public sector & first water utility to achieve this standard.  Congratulations to Joe Rowan and his team on this achievement.

"Regular readers of this newsletter will be well aware of my interest the Supported Business sector in Scotland as an example of everything the Scottish Model stands for.  Using public contracts to enable the restructuring and growth of an economic sector, delivering value and providing hope and dignity to some of society’s most vulnerable.  Visiting the new factory site at Larbert, where four supported businesses are collocated in one modern industrial unit, has to be one of the highlights of my time in this job. Another is of course the Procurement People of Tomorrow initiative, laying the foundations for the future of the profession - memories of attending last summer’s launch of the Procurement Academy at the City of Glasgow College still bring a lump to the throat.

"Only last week I had the pleasure of discussing with one of the leaders of the City of Boston how both these experiences could be translated across the Atlantic to help tackle the social and economic challenges in deprived urban communities.  This could open a whole new chapter…

"So in closing, it has been a privilege and a pleasure to serve in this post, and to have seen the changes in the public procurement landscape during my tenure.  I have had the good fortune to work with some truly exceptional people – and in particular to build on the foundations laid by my predecessor, Nick Bowd, and, of course John McClelland, who is an invaluable champion of procurement reform in Scotland as well as helping our colleagues in Wales to follow on the road.  I would like to pay especial tribute to my colleagues in the Scottish Procurement and Commercial Directorate, the Sectoral Centres of Expertise, and the broader public procurement community in Scotland and across the “Celtic Fringe”. Without their commitment, dedication and partnership, the Scottish Model would have been nothing more than a collection of words. I have been immensely fortunate to have shared the journey of reform over the past five years with such capable and inspirational colleagues; through them, the story of the Scottish Model goes on."

Alastair Merrill
Director, Procurement and Commercial
The Scottish Government