 Good morning, and welcome to the eighth meeting of 2024 of the Economy and Fair Work Committee. Our first item of business is the third evidence session of the committee's post-legislative scrutiny on the procurement reform Scotland Act 2014. We will hear this morning from two panels. I welcome our first panel, which is Craig Ferguson, head of finance transactions at South Lanarkshire Council, Melanie Mackenzie, strategic commercial manager at Aberdeenshire and Aberdeenshire City Council, and Lynette Robertson, head of commercial and procurement services, City of Edinburgh Council. As always, if members and witnesses can keep their questions and answers as concise as possible, that's helpful. If you agree with another panel member, it's enough just to say that you agree with them and we can move on to the next question. I might come to the panel first of all with a fairly straightforward opening question. This is a post-legislative scrutiny piece of work that we're undertaking, so we're interested in what have been the key changes for your authority since 2014 and give us a brief outline of what challenges there are, and other members will pick up a bit more detail on that. I'll just come to Craig first and then Melanie and Lynette. Thank you for your invitation this morning. I see that the biggest change since the reform act has been in relation to the level of transparency that we see across council procurement teams, and certainly the publication of the annual report gives it real transparency. It gives level accountability as well in relation to how procurement functions are performing. Obviously, within that particular report, there's some discretion for council professional information in relation to local spend as well. Obviously, as time has progressed since the reform act was introduced, there's been a greater emphasis on that level of local spend, and that very much ties in, I think, with some of the community wealth-building objectives that many councils are now seeking to achieve. Thank you, convener. I would agree with what Craig has just said about the transparency. I think that I would also add to that about community benefits, certainly playing a much larger part in terms of procurement. Since 2014, certainly that's been an area that we've continued to build upon, so very much a key focus in terms of our procurement activity and also pulling into that the environmental considerations and also fair work. You talk about the reports. If you just remind me of the reports all the same, do they follow the same format? If an outside organisation is looking at local authorities, they could compare. Is it possible to do that? I think, certainly, the format is laid out by Scottish Government, so we're advised of the key elements that we must include within our reports. I think there'd probably be a little bit of difference in terms of the format and the layout. I think the key pieces of information would be the same in terms of the reports. You both so far mentioned community wealth-building. The first session we had was a discussion of the pilots that were being run in. I think there was one in Clackmannan and some other areas. There have been five pilots. I don't think that you've been involved in the pilots. Have you had any feedback on the pilots? They seem to be a way of trying to secure more local procurement. Certainly not being involved in the pilots and not being privy to any feedback around pilots, but at council level we are doing work across Aberdeen City and Aberdeen Shire around community wealth building, looking at development of action plans and working very closely with our colleagues in economic development. In one of the councils in particular, they've taken on a procurement development officer role and that person is a key contact between local businesses and buyers within the organisation. That's something that's been really helpful. Lynette, I'll come to you with a reflection of the 2014 act and what the big changes that have been positive and what has been the challenges. I think that I can probably mirror what both panel members have already said in terms of the transparency. There's certainly a lot more information in the public domain about what each of our organisations are delivering and also opportunities that are coming up for tender. So there's a lot more information available to suppliers than ever before. I think that's a positive thing. I think we engage with suppliers a lot more. Obviously there's the National Meet the Bired events and things like that, but we also hold local events and do what we can with local voluntary organisations, small businesses and hooking up and trying to see what additional supported businesses there are in the community that we can work with given the changes in the legislation around that as well. But there are some really positives there. The challenges for us have been the additional administration that comes with all of that extra transparency. We didn't have management information systems, et cetera, in place in order to capture the data and be able to report on it. Our reports, they do follow a path, as Melanie says, but we widen those because we capture what our own authority commitments and policies are as well, so we expand on that and extend into other areas. I don't think that anyone in the panel can say if there's been an increase in local procurement. I think that when we had discussions about community wealth building, Fife has increased quite a bit their share of local procurement as part of our strategy. Is that something that either you have seen within your own local authority an increase? We've got our own community wealth building strategy that's been placed now for over two years and there's five key pillars across that strategy. One of the central pillars is around local spend and very much using procurement to influence reliability to increase local spend levels. One thing that we've focused on quite early on in our community wealth building journey was the arrangements around Quick Coat. In prior to bringing in this strategy, when using Quick Coat two out of five quotes that had to be from families, we increased that to trying to achieve a target of four out of five. There's a very much of a way of bringing in more local companies into that mix to make sure that they could engage with that in Quick Coat. I would say that despite that change, there's still a lot of challenges in trying to secure that level of interest at times. No doubt we'll come on later in the session to render barriers and perceive barriers to public sector procurement. Having that focus through a stand alone community wealth building strategy gives a real impetus to councils to focus on what can be done locally, albeit there's some root causes there, underlying issues around the local structures of economies, etc, to a degree can inhibit what can be done there. The general procurement frameworks still require that that governance approach to be there so we can't award a company to perverture the fact that they are local. Melanie-Ann Lynette, do you have examples on your own local authority? Have you managed to increase the amount of local procurement? Certainly within Aberdeen City and Aberdeen Shire Council, we've had a focus across certain areas in terms of establishing dynamic purchasing systems. We've had some real successes there, particularly for Aberdeenshire Council around getting small local businesses on to, for example, a minor works, DPS, for Aberdeen City established a training DPS and a DPS around employability. Lots of small local companies on those arrangements with the lead services then able to call off fairly simply and that seems to be working quite well. Generally, where we have larger contracts, we're also trying to build in subcontracting, so whilst we're maybe not contracting directly with the local suppliers, there are opportunities for them throughout the supply chain. One of the challenges for us around that is that we do that but we have difficulty in capturing that information at the moment because obviously how we calculate our local spend is based on where we pay the invoices to, so at the moment we don't have a mechanism to capture how much subcontracting is done locally without actually going out to all our main contractors, taking that information in manually and doing some work around that, which we have done pieces of, but again that comes down to resource and timing and ability to manage that, but those are some examples of some of the work that we've done. I think we'll have other members who'll come to ask more questions about local procurement, but I don't just to finish. Lynette, do you know what I've done but I've managed to increase, without going into detail what works I've done, have you managed to increase the amount of local work? I think it's probably remained constant. I think it was quite good to begin with, I think, because we're in the city and the types of services that we're buying, there's quite a good capacity for a lot of the services that we buy, for example professional services and things are based in the city, but we've done more to ensure that that continues and strengthens like Mellon. It doesn't show in the data because of where the invoice payment is going out to suppliers, but I think that having to justify why you wouldn't lot a large framework, for example, has certainly pushed the boundaries there and we've gone to the stage of even looking at smaller sublots so that very small micro businesses can take part in some of the very large frameworks that we're involved with. OK, thank you. I'm going to bring in Evelyn Tweed to be followed by Maggie Chapman. Thanks, convener. Good morning, panel. Thanks for your answers so far. To what extent is there an inconsistency in the way that the sustainable procurement duty is applied to contracts across public bodies? Do you think there is an inconsistency and how could it be made? There's a range of tools available to councils in implementation of that duty. There's a prioritisation tool, there's a framework tool and essentially it's for councils to progress that way through the use of those various support mechanisms. So I dare say that councils are at different stages in their journey in fully adopting all the principles and all the benefits of that duty. See them within South Lanarkshire, we have moved to essentially pulling together an overall waiting within contracts, the encompasses fair work, community benefits and also climate sustainability. So that essentially we've now said that we want to target 30% of overall evaluation within the technical envelope towards sustainability overall. Essentially that ensures that across the various tendering contracts to put out there is that consistency of approach. In essence that 30% provides that kind of minimum. Obviously accepting as well that there can be some variation. For example, if we're going out with a waste management contract, then arguably at its heart is sustainability. It is about minimising waste, about maximising recycling etc. But essentially within procurement it's providing that kind of guidance and that kind of framework so that procuring departments can obviously then follow through to making sure that the contracts are delivering our meeting of the aims and objectives of the duty. I think I would probably add to that round. I think yes absolutely there's the framework there of how we should be applying that duty. But I think we very much target that round about the needs of the local authority and what their perhaps local outcome improvement plans look like and how can we use some of the outcomes that we're seeing through procurement activity to support some of the outcomes in those improvement plans. So I think yes using the framework but each local authority will have their own individual needs around where they might want to target outcomes. I think I would mirror that. The duties are consistently applied from what I can see within local authority. But you look at each individual requirement and what the council levers they want to apply as well. So for some sectors where there's a problem around maybe gender pay or some other lever you might want to increase the waiting that you apply as part of the tender process. But I think generally the duties are applied across the board. And do you feel that needs to be strengthened in any way to help you achieve your goals? The written submission from Aberdeenshire Council, although this was about sustainable procurement duty, you did make a point around the low level of spend, the due regard obligation on the low level of spend. So I don't know if you want to tell me about that. It's £50,000 for goods and £2 million for works or? I think what we have said within our response is actually that at the moment the mandatory threshold is quite high at £4 million. So we would maybe see that there'd be scope to maybe reduce that. And we do give due regard to everything above £50, just to make sure that we are and that's built into our standard tender documents and processes. But I think just having that maybe threshold in terms of the mandatory application, being lower, would be really helpful. Can you make a shout-out before by calling to me? Thanks very much. Good morning to the panel. Thank you for joining us this morning and for your contribution so far. I suppose I want to extend this conversation just around how we can use procurement better to deliver the social and economic and other policy outcomes that we might wish to. I've already touched on and mentioned fair work, mentioned gender pay, those kinds of things. Melanie, in your response to Claire's first question, you talked about the considerations that you would give to things like environmental and fair work issues. Can you just say a little bit more about that and how you balance the regulatory and legislative requirements of procurement with those policy objectives? Certainly, so we would very much look at that on an individual contract by contract basis. So we do have obviously our kind of direction set out within our joint procurement strategy that's shared between the councils and also community benefits and sustainability policy. So we have that that sets out our general direction. But in terms of our process, we kind of look at each contract on an individual basis and then we look at where we could deliver the most outcomes in terms of, you know, do we want to focus more on community benefits and the circumstances? If it's a works contract, are we actually building in the environmental considerations into the specification? So they're there and actually we're then able to focus maybe the evaluation criteria more around the community benefits outcomes and fair work. So how would you make the decision about how you are waiting those different considerations or how you are saying, right, in this works contract we really need these social or environmental outcomes and therefore you said you might write it into the contract, but how else might you determine exactly what it is? The sort of fluffy outcomes that you're looking for. So I guess the project team would do that working with, if I take an example in Aberdeenshire, working with perhaps our area managers. So wherever that project is based, looking at what that area actually really needs and trying to drive the outcomes through that. So the project team would have those discussions and that would be agreed with some support from our community benefits and sustainability manager. And we then, for the larger projects, we draft up what we call a community benefits plan for inclusion within the tender pack and that kind of sets out an approach in terms of those outcomes. And you'd be pulling in data on demographic data, socio-economic data into that sort of decision making process at that local level? Yeah. Yeah. Okay, thank you, that's helpful. Lynette, you talked about, you raised gender inequality issues. How is it that you see procurement being a vehicle for tackling social inequalities? And what are the barriers? What do we need to do better, I suppose? I think in terms of driving these issues through procurement, actually what you're doing is trying to engage with the contractors to understand that these are the things that are important to you and they're important to retain a sustainable workforce. And if you're including that and highlighting those issues as part of the fair work practices that you expect from your employers, you know, if they want to do business with you, then they'll take it seriously. And Bill, you would hope they'll take it seriously and that they'll be able to demonstrate that. I mean, the difficulty we have is data and collecting data. We have obviously publications at a national level, first very large organisations. But when you're actually trying to target and support small to medium enterprises to bid for your work, then you need to consider the proportionality of what you're asking as well and their capacity to be able to meet any obligations, to monitor, to manage and to change their work practices. So you might refer them to where they can get support and where they can get guidance on how to improve them. The issue around availability of a collection of data or something, I think there'll be a thread through this inquiry. Would it be possible, would it be helpful if there was a standardised approach to understanding, well, to all of that data collection? So you didn't have to have that conversation individually at each moment when you're having those initial discussions with potential contractors and suppliers. If there was something to say, you know, this is the data we've got. This is how we want it recorded for this contract. Would that make things easier or would that just be to cumbersome a machine? I mean, I think obviously there's different organisations that are set up to register employer information about the standards that they hold, the quality standards they hold, their staffing information, their prompt payment statistics, et cetera. So I think, again, it comes to back to that proportionality issue. I think some large organisations will easily meet any obligation that you ask of them. But the difficulty is if you're trying to encourage new business to grow, to build capacity, you actually don't want to put too many asks and barriers of them in the way that they will find it difficult to meet. So it depends on the maturity of the market that you're working with and they're all different and you have to take that into account. Thank you, Lynette. Craig, if I can come to you. A similar sort of question, do you find within that focus and the community wealth building framework that you were talking about and the pillars, do you find it challenging to track the social environment until and other outcomes of your procurement spend and what are the other barriers around the barriers that prevent us from getting the social outcomes or environmental outcomes up? We might wish to, given the current procurement setup. Certainly it's worth acknowledging just the overhead that can come with that. There's no doubt that maintaining, obtaining that information and then monitoring that information is particularly resource intensive, particularly as you go down the supply chain. Using the power of procurement to bring about the changes that we're referencing is the way to go. There's no doubt about that. Procurement is a very powerful tool to do that. But I think that there's also just that point around essentially balancing the wider social benefits we can get from procurement and also with the core deliverables from a contract which may well be, for example, building a bridge where the contract specification is critical to the roads department but equally, perhaps more from a corporate perspective, a national perspective, there's much wider objectives there that should be delivered through procurement, particularly larger scale procurement exercises where I think that the asks around community benefits can become much more meaningful, much more tangible. I do think in terms of your point on monitoring that. I think that that is a challenging area in terms of getting the data from contractors and essentially monitoring that. We're looking to implement a dedicated community benefits reporting system within South Lanarkshire. That will definitely help. But it's acknowledged within procurement and across our contract managers that that too comes with an overhead. It's about making sure that the community benefits that are essentially promised at the outset of the contract award are then followed through over the lifetime of that contract. So it's only recognised that that is an area where we can make contained improvements on. I suppose just on that monitoring system that you talk about that obviously comes with a not insignificant overhead. Are there economies of scale that we maybe could be looking at if not across the whole of Scotland, at least regionally, to understand what kind of monitoring, what kind of data collection and evaluation is required or does it have to be on a sort of authority by authority basis given local variation and specificities? I would suggest perhaps at a national level that organisations like Scotland Excel could have a role but they have that visibility over the awards on a country-wide basis. Obviously that depends upon councils using Scotland Excel's own frameworks. They're the only provider of frameworks that councils tend to typically access. I think it would be a bit of both in terms of taking what is potentially available nationally and all the information that the councils have but just acknowledging that would then be a further layer essentially of that kind of information flow between contractors and local authorities. But ultimately I think it's an important stage to see through to make sure that we are pulling together information to assess really are these policies working and have they got the intended consequences that we hope they do. It might be a role for tech innovation in this somewhere but I'm not quite sure what it is but I'll leave it there for now. Thank you. Colin Smyth to be followed by Colin Beattie. Can I just follow up that point Craig around monitoring fair work? It is fair to say therefore that you assess I suppose the fair work commitments from the main contractor but you don't monitor anything beyond that when they subcontract. Have you awarded a contract? Is that entirely a resource issue? It certainly is a resource issue in terms of a typical tender for a regulated procurement and obviously fair work requirements that is built into that and essentially through the scoring mechanism we very much incentivise bidders to deliver as much as they can around the principles of fair work and some of that may be in relation to what a contractor is doing now in relation to fair work with its family friendly policies recognising the role of trade unions for example there may well be that over a period of time a contractor has a plan in place to meet more of those principles around fair work but certainly in relation to what we can do at the point of contract award we will ensure that we have in place the prompt payment certificate that is signed off by the main contractor and that has an impact in terms of ensuring that subcontractors in that supply chain are paid within the 30 days so it is maximising what we can do at that point of award but certainly there is a recognition that any kind of continual monitoring of that in relation to compliance with fair work principles that carries with it a significant overhead particularly given the sheer number of contracts that councils typically award I presume that that is the case for others there was nods there I am sure for the official record that everybody agreed with that particular point just on another area I suppose of procurement is around the issue of fair trade we had evidence last week from the Scottish Fair Trade Forum in Scotland's fair trade nation South Lanarkshire and Aberdeenshire are fair trade zones Aberdeen and Edinburgh City are fair trade cities and the procurement strategy you have to include a statement of general policy on fairly and ethically traded goods and services Scottish Fair Trade Forum did a report a couple of years ago based on FOIs to local authorities of your spend on fair trade products Aberdeen City was about 2644 for the financial year 2021-22 Aberdeenshire was 7268 Edinburgh 3756 South Lanarkshire 28668 South Lanarkshire top of the table there but I suspect the level of spend in each of your authorities is higher than that on fair trade so what is the reason as to why those figures I suppose are not are not higher than that do you want to come in a minute so I am certainly in terms of responding to FOIs of that nature it's very difficult because what generally we would do to respond to such an FOI is look at the data within our finance system which doesn't necessarily hold the level of detail to be able to identify items as fair trade so we don't necessarily hold a register of those fairly traded goods that we may buy so how do you monitor your general policy commitment to what you're doing around fairly traded goods so how do you monitor that if you don't really publish that information or hold that information in a usable way it's very difficult in terms of our strategy in direction and how we approach the specification of goods that strategy is clear and that flows through but we don't have the systems or indeed the capacity to really monitor and publish information on that it can be quite challenging particularly given all the other reporting requirements we have within procurement and there's no requirement to publish those figures on specifically on fair trade so we do focus on where we are required to publish the data I don't know if Lynette or Craig want to add anything to that at all I think I would just add that we do most certainly support fair trade within this city but we do have the monitoring issues around identifying the spend items but what we do is we promote fair trade fortnight and we hold buyer events so we've had sessions where we've brought fair trade companies into our offices at Waverley Court for other suppliers and wider council buyers service users to come in test see the products in person get to know about the history behind them and why the goods are the way they are those types of events do boost the sales activity from those suppliers we have seen that happen and we continue to support the fair trade I think we're on the board as well within the city when I must have said on that If there was specific guidance from the Scottish Government that said there's a definition of fair trade within procurement and each year if your annual report had to publish the level of fair trade spend based on that definition would that be something that you could do with a change in the way in which you monitor that is that something that you could do I think it would take a bit of change in how catalogs and things like that were set up particularly when it comes to goods we get a wholesale catalogue of goods from the framework that we buy through Scotland Excel for example the collaborative frameworks some of the goods the description perhaps doesn't feel explain or we can try to put some kind of indicator on it but when the catalogue gets refreshed you're back to square one and you're having to seek out the items and redo it so it's quite difficult to drill into the information One final question is just around the resources Craig, you've already touched on this the resource challenge you'd have going beyond primary contractors has there been a drive in your local authorities to use procurement a time you're having to make millions of pounds of savings every year has there been a drive to use procurement as part of those savings a local authority is absolutely pushing procurement as a way to save money and presumably that's a tension potentially extending that at that conflict to buying locally too at times buying locally can be more expensive so I think there is a tension there on procurement teams where there's obviously a drive to make sure that procurement can bring about efficiencies at times that can point to a use of frameworks over perhaps other procurement arrangements but certainly within South Lanarkshire procurement has been a key area where we have made savings over a prolonged period of time and some of these savings come around just from essentially renewing a contractual arrangement and getting the benefit from a new competitive process undertaken or it can be looking at your specification looking at your volumes looking at the man management arrangements that are in place too across the council across certain category types and I think that that is an area that will continue to be in focus within South Lanarkshire giving it the financial pressures that they have The procurement is very much seen as an enabler to support authorities to to find savings effectively to try and save money on existing third party spend so to do that we will look at the best competitive rates that we can get and I think particularly when it's when you're buying goods there's probably more of an emphasis on your outcome being mostly about the price rather than the quality of the goods there will be a percentage weighted towards the goods but over it ultimately budgets are tight and schools will tell us why we're buying from that I can get that cheaper off Amazon and it's trying to get a balance of the best outcome for everyone That line has been used in my own local authority I don't know why you're ordering it from there but yeah absolutely Just before I bring in Colin Beattie the committee has an interest in the work being done to close the disability employment gap and I think quite recently the Scottish Government have launched I think that I'm just referring to the dynamic purchasing system but there's also guidance on a new system that puts a certain emphasis on supported businesses when this is quite I think September it was published so I realise that it's quite recent but is that to any of the authorities do you give consideration to supported businesses or are you looking at ways to try and increase spend with supported businesses in any way? Yeah we've awarded one contract to supported businesses in the last 12 months I'm taking a general feedback from that exercise was extremely positive in terms of engagement a general observation would be that the number of sectors that are represented on that supported business framework is fairly limited so certainly we would welcome any further expansion of that to ensure that we can maximise the opportunities that are there Anybody else? Similarly I think we've actually made comment in the consultation response about the limitations around the supported business framework at the time we have taken some steps to try and direct some quotes towards some other supported businesses we've become aware of through Meet the Byer events for example so we are trying to stimulate relationships and target some opportunities for supported businesses just not necessarily through that supported business frameworks but we continue to look at that as a route where it's appropriate Lynette, have you got anything to add? They're quite niche businesses as well in the past so I think there is room for development there we do use supported businesses in Edinburgh but the demand for use will depend on what we're buying on any given we use our nearest supported business on the framework but it's not obviously there's a laundry within Edinburgh and if we can use them to fill capacity we do what we can to promote them through supplier newsletters and things to raise awareness to other supply chains but it's just You're choosing a supported product because Colin Smyth asked about cost so are they competitively priced or does it involve the authority around costs? I think there's a balance there as well I mean one of the supported businesses we use is a reupholstri of furniture for example we're probably doing it on quite a small scale and so we're able to directly award that contract through that reserved framework but there's been other instances where we've used courier services and then the business actually closed they had to make an alternative arrangement so it doesn't always work in your favour and again the wider selection because ultimately to get the best outcome what you want is several supported businesses who are in similar businesses who are competing together but there's always a witness from the sector to be quite flexible in what you need and what you want as well, they're good businesses to work with Colin Beattie is before by Prime Minister Thank you, convener We've heard that it can be quite difficult to understand in relation to product or service which might have a higher upfront cost whether it might deliver medium or long term value now obviously procurement to some extent is used to manage costs and there's a bit of conflict there between maybe paying more upfront now in the belief that in a few years time you're going to receive better value for that particular service or item to what extent do you make decisions to capture this so that the life of the product or service is properly assessed in terms of value for money and are there barriers to that maybe Lynette I can ask you to I think maybe what you're talking about is whole life costing so when we're looking at particularly if you're buying products you want to consider the product the lifespan of the product whether it's going to require maintenance over the life whether at the end of it's life cycle it can be reconditioned or recycled or you need to look at disposal costs so where you're buying complex products then or basic products cars, vans etc you need to look at the whole cost of life of the product not just the purchase price at the beginning I think you can purchase something that looks like a really good deal but further down the line you have problems with faults or issues with the system which the maintenance itself can be really costly at the end of the day so quality of product is important as well so you may pay a wee bit extra for the quality of the product for the life of the product you're going to have less repairs less maintenance and you're not going to have that huge cost at the end so do you have a process in place to we would capture that within individual procurement strategies for the quantities that we're purchasing are there any barriers to this? it would depend if it's new technology for example we've been looking at some new technology where the disposal of that at the end of life cycle is unknown at the moment so sometimes there are barriers that we just can't get the answer for so we need to do more engagement with the market to try and understand what we can do I think when the changes and the regulations come into force obviously at that point we could no longer just look at price which I think was welcomed by all procurement teams building on that element of quality price comparison across all types of contracts I think is really valuable certainly something that we do in terms of looking at products particularly it is about not just buying the cheapest but actually looking at that balance around the whole life costing and what will last and ultimately if we were to specify something that's kind of a basic item but actually we may buy 10 of them instead of 2 of something that's specified correctly so that's a key consideration in terms of our procurement processes as well I think where that can fall down a little sometimes is in terms of some of the national frameworks where there's a drive to show that value for money and I think sometimes the suppliers who are bidding for those arrangements sometimes feel like they need to put forward quite low price products to be able to get the businesses of local authority through those arrangements and in reality the local authorities then don't necessarily buy those core items but then be using those arrangements but buying non-core items but this process would rely on some kind of knowledge base that would be applied to that product or service is that systemic, is it relying on the people in the procurement area to have that knowledge do they keep files how do they do it so certainly for our own councils we work very closely with the service areas who are actually buying the products and have the technical expertise so we work very closely with the lead service in terms of any procurement and where you have any commodities, where you have cross council purchases you then take in relevant people into that process from across the council Craig I'm certainly from memory that there's one practical example that I can give around this whole life costing concept in this relation to the perks of wheelie bins we're essentially through working with the waste service that they could demonstrate actually by buying a version that's slightly more expensive made with thicker, more durable plastics that actually was a longer lasting product I think in terms of barriers to that I think it was back to the earlier point around the need to drive efficiencies through procurement and I think that is definitely a risk to applying the concept of whole life costing whereas around this is the budget we have in here it is about making sure we can keep spending within that budget and looking to then drive efficiencies anticipation of budgets in the future having a level of reduction applied I think that it is the old adage of it can be a false economy to buy a cheap thing now I think that ultimately there is a wider financial pressure coming to bear that may as I say put pressure on the whole life costing concept which I think is absolutely sound but I think it is one that will find increasing pressure Just to cover something a bit different we've been hearing about the experiences of framework contracts and lotting and I wondered for yourselves how much of a challenge is it to make these opportunities accessible to smaller regionally focused firms and but at the same time sharing the risk and ensuring good value Lynette, maybe I'll come back to you on that We've had a few experiences recently of setting up some frameworks for some very small businesses sole traders both within the building sector and also within the education sector as well locally so what happens there is where you're breaking down the component parts to quite small areas so that those with a lower turnover lower capacity can take part in the competition what you need to do is upskill those organisations to enable them to go through the bidding process because I think it's noted through some of the evidence that's been submitted so far is that it's quite complex and it's quite difficult for organisations there's language that we use that they're not familiar with to be filled out they've never filled out before so we make use of things like the supplier development programme we engage with them to run some training sessions for organisations that haven't gone through the process before our staff join up with the supplier development team and we do that we've done a mix of YouTube videos to help people understand what the process is about evaluation processes and how the decisions will be made to support their businesses what feedback they'll get through the process so it adds a lot of additional work for us to be able to do that but we consider that to be worthwhile work if the aim and objective is to support smaller businesses to gain contracts to the local authority we've heard a great deal about accessibility being an issue particularly for smaller businesses who don't have the same resources to be able to fill in your forms and comply with all the requirements now are you satisfied that what you're doing is sufficient to open up that process I think we're doing the best we can within the resources that we have would be probably the answer I would give to that I think all of us could always do more with more resources I think as well Craig spoke earlier about the quick quote process which is a much more streamlined process because it's designed to be for low value purchases which can help one off purchases and small businesses at that level I think the ability to the threshold was mentioned earlier 50,000 thresholds for services and goods is actually quite small particularly on a 3, 4 year term of provision you're only talking about just over £12,000 a year which is really not that much and should attract very small businesses but actually we're asking them to jump through quite a lot of barriers and hoops to understand a process and their technical ability on something they've never bid for before when we could be staring them towards a quick quote process and making it so much easier for them so I think there is something about the threshold and the flexibility that would be available to us to support some of these smaller businesses the larger businesses they're used to it they bid for many contracts they've got teams that do it or the employee teams to do it for them I think there's some improved results from those organisations that do take up the offer of help the help that's provided there's new guidance being made available on the supplier journey as well it's all really good information I guess the crux is you're a small business or a one man band you're time available to read all those guidance so it will be limited as well so I can understand why it's difficult for them to do so I totally agree with what Lynette has said there around about I think also in our organisations we are doing as much as we can within the resources we have certainly I mentioned the close working that we've been had with our economic development colleagues over the last period of time so that one person in a dedicated role supporting businesses has been working with local businesses to help them navigate things like the single procurement document which is something we get quite a lot of feedback on it's quite a complex document and they find that quite difficult to complete so that one person is supported around 100 businesses in the course of a year whether that's through sign posting them to specific training provided by the supplier development programme or just sitting with that person on a one to one basis and going through tender documents so a range of support we've been able to provide through that particular role but I think in terms of picking up on what Lynette said about the thresholds I also think an increase to the threshold for goods and services would be incredibly valuable you know if we were able to direct more through quick quotes we could do that locally it is a streamlined process it does make it much simpler so I think that would be a key point certainly for us Craig Thank you I would certainly concur with the colleagues I've said in the panel here I would also emphasise as well just the important role essentially they're in a key position where they can see and understand how councils operate but at the same time we've got those very close links with business and they are based within South Lanarkshire and we essentially work with them at a very frequent basis to deliver for example talking tender sessions we're inviting local companies to come in and essentially receive that kind of core training around how to actually put a bid what to look out for you know how to register for PCS how to use PCS for example so I think that their role is pivotal in this councils ourselves though we can still make sure we are using our own social media channels for example using our own websites to make sure that our contract registers are fully visible so businesses can see what is up and coming in the next two years we referenced Daniel Precument report there's an appendix in there that essentially sets out that delivery plan over the following two years essentially itemising individual contracts that we anticipate coming up for renewal so a lot of information is out there it does require businesses I think to go and seek to a degree as well but as a marketplace we have to make sure we're doing much as we can to make sure we are making these opportunities known within South Lanarkshire last year we looked to the potential for more local procurement of food and we sent it a questionnaire that we engaged with hundreds of companies and only 22 came back expressing an interest in actually providing food to two South Lanarkshire and when you whittle it down it actually became quite kind of niche products but we could see a match between what those company suppliers were prepared to offer to us and what we were looking to essentially procure as well I think that's a kind of live example of how proactive we have been in getting out and engaging with individual sectors I think what comes to training that that's a much wider approach we take we're trying to bring in as many businesses as possible but we do certainly recognise the sourcing constraints some businesses have in fulfilling the requirements and even just at the front end an understanding how the process works but there's ongoing work for us to do to make sure that we are breaking down these barriers taking away some of these perceptions around how difficult it can be to procure in the public sector making sure we get safeguards in place around insurances around financial standing given it's public money we're using Thank you I'll now take Brian Whittle to be followed by Gordon MacDonald Good morning panel I'm very glad Craig that he raised public food procurement this happens to be one of my really big interests and I really want to go back to this idea of the higher upfront costs balancing that out with long term long term objectives and if there was ever a product where that's very much an evident it would be procuring locally procured food mainly because when we talked earlier on you know we're transitioning to net zero so miles of travel obviously is a big issue there fair trade and ethical produce, we charge our farmers and food producers with the highest levels of standards and yet the last time I looked through the Excel contract the amount of food procured from Scotland was substantially less than we potentially would imagine so I suppose really the question is practically how easy is it to do that I'm sure we all want the high standards of food in our schools in our hospitals but the practicalities of delivering on that one contract through Excel or many contracts locally and the reality is when I looked at this the last time there's a huge variety to the next in terms of the amount of locally procured food so I wonder how difficult it is to be alluded to yourself but how difficult it is to practically deliver on what should be a high priority I think practically it is very challenging and obviously this against a backdrop of having nationwide nutritional standards that have to be met so perhaps that in itself points towards the use of single suppliers where they can guarantee those nutritional standards it's been a perhaps less risky approach to procurement I think inevitably with food procurement as with most areas there are economies there but I think there's an important point to me around the subcontracting opportunities throughout the supply chain and certainly we make sure that we do highlight to local businesses opportunities even through and excel also I think it's a plan area of spend that isn't particularly well captured but I think particularly in relation to food procurement I think that there are definitely challenges there the work that we've done in South Lawrence the past 12 months certainly pointed to on the face of it quite limited interest and local providers contracting directly with us but we do know for example there are a number of farms across Lanarkshire that supply directly to mullers so it may well be it's quite convenient as well for some local providers to be part of those kind of wider framework arrangements where they are in that subcontracting chain and don't have to actually procure directly with the local authority I think as well as soon as you broaden out your supply base for food there will be additional overhead from a facilities management perspective making sure that nutritional standards can still be met typically there will be a standard menu provided across most of the schools estate so buying in from more suppliers potentially makes that more challenging and there's also the various health accreditation the business needs to have and again that becomes potentially more complex the more suppliers you have within that chain and that's a piece of work that we're not finished with there were 22 suppliers indicated a willingness and interest to engage further and colleagues are taking that up as a separate stream of work and also looking at learning from other councils where perhaps they're further ahead in their journey in terms of local food procurement but I think really looking at the key takeaway from me in relation to what we've done so far is it learning to come back or is somewhat disappointing? I could just add to that come to you Emily when we just said there's a big variation across councils South Lanarkshire is one of the ones that I'll look at but I've also got East Ayrshire who are obviously the gold standard and I understand they're under real pressure here to try and maintain that just through balancing balancing the budget Craig mentioned this idea of maintaining a high standard of food and potential that's easier through a central contract I would suggest that the highest quality food that's kicking around is produced by our own food producers and it's how we get that onto the plate in terms of the risk in terms of the ability to have multiple contracts and managing multiple contracts and is that a real barrier to progressing on this? Thank you absolutely I think resource and capacity is a real issue around this obviously managing those contracts at the operational level is with generally our catering teams across councils they do have limited resources in terms of being able to manage that manage multiple contractors particularly given the level of information they're required to have around menus and allergens and as with everybody I think financial challenges I think has impacted the ability to maybe do things as we would like them but I think picking up on something that Craig had said there we also do quite a lot about looking at the subcontracting opportunities so working with a main provider of food but ensuring that actually through that route we're able to utilise produce from farms in Aberdeenshire for example so we've had some success there I think as well one thing we've certainly found over recent years for our councils is actually some of our local food companies are not interested in servicing the council's business directly so it's a huge logistical challenge for them given well certainly in Aberdeenshire we've got an excess of 250 schools so the actual establishment of the logistics to actually service a contract of that size I think would be a challenge and of course we could split that into areas but how small would we have to go and what would the resource impact be so I think that's why we've looked at focusing more towards using that subcontracting route because that's kind of a win-win they are receiving our business through this playchain we're able to support them at local level but again it's evidence I think it can be a challenge from time to time because again we're paying someone else a invoice address who we're not actually capturing that really anywhere I do agree it's very difficult to get the evidence I did it myself in 2016 in two weeks six months to gather all that together and the reality is that as I said through the Excel contract I was quite surprised at how Lookford was procured locally and I think what Craig said earlier Lynette was around that it's easier to contract from I don't want to pick on these guys because they could be brilliant but Muller because it's easier for the farmers when we're talking about fair trade I'm very much interested in the fair trade for our own food producers and they might not necessarily get the fair price that we want for farmers so there is this extended attention so from your perspective how can we make sure that there's a system in place that tracks where likes food I'm picking on food where food comes from how do you innovate how do you do that because obviously risk a verse how do you innovate within the budget that you have I mean a bit like Melanie our catering manager very much leads on all our food purchasing all the way we work with them to set up frameworks we use the Scotland Excel framework because it's a national framework but we also use a local framework we have our own framework for fruit and veg foods etc and getting back to your earlier point around carbon miles etc so a higher emphasis on food miles is something that we can use as a lever as well to ensure that the products are not travelling from huge distances we had a meeting with the food industry quite recently in Edinburgh just talking about this issue and how we can improve the local purchasing of food products I was quite impressed by the statistics that our catering manager actually had and if I knew her to speak about food today I would have brought some of them along but there was quite a high volume of locally produced purchase foods but I think again what he was reiterating was that in terms of local supply it's the shared demand the volume of product across the schools and care homes within the city that make it really difficult for smaller producers to come along independently supply so having them work with larger contractors who support the logistics of the deliveries rather than having multiple deliveries coming into school at any one time is key Did you think that the size of the story makes a difference then because Adam was quite a larger story the smaller ones it's easier for a smaller supplier to provide them but there's more bureaucracy in terms of the burden on the authority for being able to procure smaller producers I don't think it's much the burden on smaller authorities to be able to procure smaller obviously in terms of resources it's easier for them to link into the national frameworks but I think if they've got farmers etc within their locality again who have the capacity to meet their demand then I'm sure there's a way that they would be able to overcome some of the obstacles that are there I'll leave it in combat later if there's any more time Gordon MacDonald to be followed by Murdo Fraser Thank you very much convener and good morning panel I wanted to ask you specifically about your experience of using Public Contract Scotland website it has been on the go since 2008 and while there has been improvements in recent years just interested in your experience we heard last week from some of the suppliers that the website it was an improvement having the one portal in comparison to what went before that it was more transparent and it opened up opportunities to more suppliers but it had been a bit clonky although it was now had improved so what's your experience of using it Certainly from a practitioner's perspective our procurement team are obviously very afraid with it now it's certainly a significant improvement what we had previously I think that there is still a perception from bidders and prospective bidders that it's not that user friendly that some of the language could be simplified to some degree acknowledging that it's not always possible in every case and there is just an underlying point here that procurement can be a fairly complex world however much effort we've been to try to simplify that but I think just given that that time that it's passed since it obviously introduced I think there would be an opportunity there to look at how it could be made just that we have more user friendly I think it's important that we take on board the feedback from prospective bidders around that but I suspect as well that they'll be only so far away we can go to simplify it from that term but nonetheless even just things like graphics, how tables are presented how we use bidder guidance in the various forms I think there would be an opportunity there to look to see what could we tweak to perhaps take away some of those barriers but as a buyer and actually using it to put contracts up for suppliers how easy do you find it using it our team are very well experienced with it now I don't get any feedback that suggests we find it that difficult the one area that springs to me would be around how we actually include bidder guidance within the various forms the presentation of that is always great and while we can tweak certain areas there isn't a great deal of flexibility within some of the fields within PCS I think that's got to be balanced again making sure there is still that standardised approach across the public sector but I would say there's an opportunity there to look at what improvements can be made I would certainly echo what Craig said as a buyer we actually have devolved procurement so people within services with authority to procure on behalf of the council and you know the PCS system is really simple to use at the buyer side I think that there are improvements that could be made around the supplier search functionality I think is a key issue for us in terms of how that works it's not always the easiest to try and find suppliers within a particular category so that can be an issue it's not that useful it's that kind of tool so we more go on local knowledge so that is one of the suggestions we heard last week to allow commissioners to search by type of organisation so that you could improve your social impact so would that be something you'd all find useful? yeah, certainly that's something we've had feedback on at a local level within the council that that would be useful particularly when we're looking at issuing of quick quotes so we may have some knowledge around suppliers in that area but always useful to be able to have another leak, is there anybody new who's joined the PCS system since we last did this exercise so yeah, we would certainly find that very valuable okay, Lynette likewise, I think the staff are pretty okay with the system now, we know kind of how it works and what its quirks are the supplier search function has been an issue for a long time and also I think some of the suppliers don't realise that their registration I think it's 12 months it will lapse and it'll expire unless they refresh it so often suppliers say I'm on PCS, can't find your details there so I think it's just trying to make sure people are aware of how it works and that their details may not always be available and ensuring that suppliers keep their details up to date as well is also a challenge so you've said that it's fairly easy to use from the buyer side and the customer satisfaction survey for suppliers found it was moderately to very easy to use for the majority but not all but there is an issue for the micro businesses because they lack capacity when you spoke about meet the buyers events and supplier development programmes and all the rest of it is there enough emphasis on looking at how you can support micro businesses to use the public procurement system or do you not feel that's your role we jointly deliver sessions on how to use the system what buttons to click where they'll fill details in so I think the opportunities for support are there we also offer a drop in session for suppliers to contact us at any time if they're having any difficulty the systems also have help desks and support for people that are struggling the clock's ticking and they know that they've got something to submit and they're still struggling with a file or something there's someone they can contact and say what do I do about this can't get this to work so I think there are support mechanisms there I think it's just there's PCS and there's PCST so there's actually two systems alright so there's one that's fully electronic and one where they would download documents and then upload a response that system is probably a bit more straightforward than going through the but so the two systems you just talked about are they used for different things or is it different stages of the same process no they both support similar processes but the notices out to market are only done on PCS that's the only system because there's a reporting functionality running through that one as well PCST was to enable a fully electronic system to be used we talked about SPD earlier so that means that once you've filled out your SPD form on that system and registered on that system it's there forever more so a supplier can go in and refresh it the next time they want to use it rather than start from scratch again so that's designed to make it a little bit easier but I think if you're perhaps if you're not technically minded you may find that some organisations may struggle with that Craig you spoke earlier about perceived barriers is the website one of the perceived barriers for small businesses for PCS I think certainly we've done a survey around 18 months to two years ago of several hundred local businesses that responded and certainly training was one area that came up as a perceived barrier together with capacity so I think in terms of training I think you could reasonably extend that to businesses smaller ones in particular just having the confidence to participate in a public sector procurement the training is there the webinars are there I think it's making sure we are continually advertising the availability of those routes for local businesses I think some will see that as being almost a permanent barrier it's perhaps not how they do business on a day-to-day basis within the private sector but ultimately I think it's making sure we can some of this from me is perceived barriers I think what we've learned is that once companies get that experience get one or two under their belt the conference naturally grows but appreciating the flip side to put in the effort to put in a tender then not to win the contract we could be one out of ten, one out of twenty bidding that brings with it a level of disappointment the main turn perhaps put that same company off from participating again but I think it's to be that balance making sure we are accessible making sure we have appropriate safeguards in place at the same time not using overly complex language where it can be avoided just on that point you raised about small business you could put off because they don't win a contract because they might be one in ten that's bidding for it do suppliers that fail to get the contract do they get any kind of feedback so that it can be partly a learning process of how they improve their bid I think that's a really important phase in our procurement process for regulated tenders where if you weren't successful in an organisation we would give you the breakdown of your scores across to the technical side and also on commercial and we'll also give the equivalent score for the winning bid and then we give a commentary against each individual element so it could be those four or five elements essentially why the winning bid essentially scored more than the one we're responding to so I think that's a key change in recent years we've brought about the general response is that companies find that level of detail helpful we can also offer individual conversations should companies want that in the sense that that's part of their learning and also ours too in making sure we are in full detail on the feedback OK, thanks very much Murdo Fraser, we follow by Kevin Stewart Thank you, convener all the questions I was going to ask I think they've been covered by others so if you have time we can move on Thank you, Kevin Stewart Thank you, convener and apologies to you and the panel for being a bit late today I want to concentrate on some of the things that others around about bureaucracy and a lot of folk have said that things work well until the lawyers and the acquaintance get involved in the tendering the buying process apologies to any lawyers or acquaintance amongst you and from my own counsel experience which is a while back now you know I'd definitely seen that risk aversity particularly in my early years before the formation of the Aberdeen City and Shire Joint Procurement Unit do you think that risk aversity is still there do you think that that bureaucracy is still there or has that lessened over the years Craig? As an accountant I can say there is still that need to make sure we are safeguarding public funds and what we do when the key is to focus on the appraisal of the financial standing of an organisation and there is no doubt that for for higher value tenders that's got a very important role to play in the sense of providing some safeguard to the contracting authority that has been that level of due diligence undertaken and I also extend that to say even taking a scenario whereby a company may feel a financial appraisal and that this is done with the input of the accountants we will then look to what mitigation can be put in place so it could be if a company wants payment in advance we may decline that but payment in arrears essentially deep risks from a cash flow perspective but also for a longer term contract it may well be we would turn to a parent company guarantee for example or a performance bond so it's not to say that if a company were to fail a financial appraisal that's the end of the journey there so I think for me that that's around the checks and balances there's parallels there with health and safety I think too again could be viewed as perceived bureaucracy for me I think that these are important controls it's part of that overall procurement governance process Thank you Melanie, please I think it's important that we have the controls in place but I also think we need to be risk aware as opposed to risk averse I think in terms of the financial for the councils that we have the joint procurement service for we tend to shy away from using turnover as a key financial criteria for everything and we tend to apply more credit checks etc we do have some involvement from finance and legal colleagues particularly around larger contracts but we also wherever possible tried to adopt a set of standard terms and conditions so rather than maybe in days past where everything had a spoke set we've really tried to drive forward a bit of simplification in terms of cutting down the number of documents trying to really clearly section things into quite small chunks so it's easier perhaps for bidders to try and complete them and not be overwhelmed by opening up the one document that's maybe 80 pages 100 pages but tried really to make some relatively simple changes but I think they've been quite effective in terms of our own procurement just trying to make things having that lens whenever we're trying to make changes to our documentation for suppliers what if I was a one person a sole trader looking at these and I didn't have much time so looking at things through that lens as well Thank you, Lynette please Yeah, I think I admire what you guys have said I mean there's we still obviously we work with our finance colleagues to look at the contract it can help to have that conversation with them as well about the market that you're working with and what their capability is so that when they are there's not a standard one size fits all in terms of turnover and ratios etc that we're looking at that actually for this sector is that the norm and what could we do instead what might mitigate that risk and the same for insurances we have discussions with our insurance manager as well about setting the appropriate levels for some of the low level low value spend as well and whether it's appropriate and proportionate because sometimes if you're doing particularly if you're doing a large framework it might be pretty high value but when you break it down into the component parts the actual low level lotty delivery may be quite small so we rather than setting an overarching level framework we can look at component parts and break it down a bit further for those as well Melanie obviously mentioned what seems like continuous improvement and try to get this right would it be fair to say yes or no that all of your authorities are doing similar? Absolutely within the confines obviously of the procurement regulations you've referenced as well in terms of that risk appetite that's certainly a factor too I think that there's a general point to me around trying to simplify where we can both process and also the language used and back to the other point around better feedback and it's an important aspect of trying to encourage which participation to allowing better state to define their approach Yes or no Lynette please Yeah absolutely continuous improvement I want to come back to a point around about some of the commentary that was made about national frameworks and value for money I think that was from yourself Craig and I want to ask a general question around about Scotland XL what are your feelings about Scotland XL good, bad or indifferent? Lynette please I think there's good things there in terms of if we're all buying the same thing it makes sense to pull it together as a collaboration but we don't use all of the frameworks there because we find for some items or for some services certainly a focus on what our local needs is a priority and it's easier to drive that if you have complete influence over the intent approaches Do you have the choice to be able to do that or do you feel sometimes pressurised to join national frameworks? I think more recently I think there's been more of a push for us to use the frameworks more but ultimately I will always take the view that I'll do what's right for our authority Thank you Melanie please So we have always been supportive of Scotland XL I think of that collaborative approach to the things we're buying at sector level we're all buying the same I would say that perhaps there's not enough done at times to really drive that collective to the specification though I think sometimes the frameworks are established and local authorities are then buying different items from time to time I think as well certainly would agree that more recently there's been more pressure to use the frameworks and we do consider that as an option in terms of any procurement strategy but we've always seen it as it's an option and we test that against maybe looking at the market locally and all those things I think are really important in terms of actually that delivery of best value for the council and the other thing around the national frameworks I would say community wealth building agenda local suppliers if we're going to have national frameworks well how do we get our local suppliers on to those agreements and how is that engagement going to take place So you still feel you've got that choice ultimately but feel pressured not putting words in your mouth There's certainly been a degree of pressure recently Thank you very much Craig please I would say good and certainly what I do ourselves if there's an offering there already from Scotland Excel we use the vast majority of Scotland Excel's frameworks just concurring with the qualities I've said that there has been more recent pressure to update our own standing orders to acknowledge that we'll consider Scotland Excel frameworks prior to agreeing a route to market to do we do that anyway that's already part of our customer practice we'll look at what Scotland Excel have available and ultimately if it doesn't suit our purposes then we will look at other framework providers Thank you very much Craig mentioned the two ominous words standing orders there we could probably have a week long session on kensel standing orders when it comes to procurement I think that with that a better stop actually, convener Thank you very much I just want to find a question and I suppose it does address some of the issues that Kevin Stewart raised around bureaucracy and Gordon MacDonald raised around the website is that when we heard from the Chamber of Commerce they talked about AI as being a possible solution to make things much more streamlined to match contracts to make it more efficient is that conversations that the local authorities are having around how do we use AI to improve those kinds of systems there's no conversation at the moment, no I'm sure you'd have it at its purpose but certainly what we're trying to do is make sure that our register is freely available and it has got search functions on that we came back to an earlier point I've made a journey here and making sure we're continually improving our openness, our transparency and making sure that companies have that free access to information so that may well be a conversation to have in the future again, no, we've not really at this point considered the use of AI we are in one of the councils currently a part of a co-pilot so actually using that to try and drive maybe some improvements around documents etc but no, not in a all over it's just interesting to know some have had debates in Parliament around it to what extent is it starting to be developed within the public sector and there are early stages of some of the technology but it's just interesting to see if there's an awareness of if it could be part of the solution using it in any way thank you very much for your contribution this morning to the inquiry that's been much appreciated I'll briefly spend the meeting while we change over witnesses I now welcome our second panel of witnesses I'm pleased to be joined by Gordon Beattie, director of NHS National Procurement NHS National Services Scotland Steven Connor, senior procurement manager advanced procurement for universities and colleges and Rob Mustard, director of capital investment and Jo Rowan, general manager of procurement both with Scottish Water welcome to the committee this morning I'll start with a general opening question it's a short inquiry into the 2014 procurement act and we're interested in key changes you've seen in procurement achieved through the act and maybe start to outline some of the key challenges but other members will pick up on those issues but if I can't maybe first of all to Gordon good morning everybody so that being in NHS procurement since 2001 I was involved in some of the earlier discussions we had with the question of SMEs and SME involvement so I've seen a big change over that time I think it's been a positive move the act embodied a lot of the good practice that was going around the time and has given us a platform to build on so that I guess is where I see the act coming in we've increased our visibility I think was a key element in terms of what is it we need to buy we make it obvious hopefully to businesses in Scotland and throughout the rest of the UK and now beyond that and allows people to plan to bid for our work so I think that's opened up a lot we've brought in new policies to be delivered through procurement and we can do that because we have the ability to ask for these things in our specifications and we can therefore focus on changes delivering things like sustainability community benefits fair work practices so a lot of good things that we can do with that the NHS itself my area is national procurement so we do national contracts that are common requirements across all of our health services so they tend to be larger value contracts about 70% of our spend is in high end medicines, medical equipment and digital solutions but within that primary and overriding requirement is for patient safety and delivering good patient outcomes so in that respect is fairly complicated what we're asking for is fairly specific and it requires to ensure ourselves and give us assurance that the products that we buy and the services that we contract for can meet those requirements just so I understand how NHS procurement works so you procure 70% of procurement and then do the boards have individual procurement so we work very collaboratively across the health boards I don't line manage the rest of the procurement services in Scotland our health boards have their own heads of procurement through the board through their own area but the rough balance is that and our health boards take our national contracts and implement them so there are change agents within hospital areas working close to the clinical teams and technical teams, state teams to deliver the outcomes of the contracts I'll come now to Stephen, so a similar question about 2014 act and what's been positive about it and where there might be areas for improvement morning everybody so in terms of the impact of the reform act I think there's probably been sort of three main areas so obviously there's been with the lower threshold being a lot more spend is now regulated previously the spend that wasn't regulated has now been regulated there's been a big impact in terms of the transparency and the reporting requirements and obviously a major part of the act has been around sustainability so I think in terms of the impact of the act coming in obviously those have all impacted the universities and college sector Gordon just mentioned there the sort of raising of visibility and profile of procurement and I think that's probably been the biggest impact I think one of the things the reform act did was to kind of put in was to kind of legislate a lot of things that were already kind of best practice and then the reform act kind of made those things legislative requirements so in terms of having a procurement strategy reporting on those kind of things so I think that's been probably the biggest change and I kind of think kind of related to that it's kind of done a lot to raise the floor in terms of the way that procurement is done across the sector so I think a lot of organisations that were already doing good procurement would have continued to do it regardless of where the act had been brought in but the fact that the act was then brought in kind of forced a lot of people to kind of address procurement in a way that perhaps wouldn't have done previously but I also just add I think that the act obviously didn't come in in isolation I think it's kind of a key part of the act being effective has been obviously it being part of the kind of wider public procurement reform programme and obviously all the kind of transformation that's kind of gone along with that kind of driven by Scottish Government but also through the COEs and I think that's been sort of a key driver of the act actually having an effect okay thank you and I'll come to Robyn Jones so Scottish Water understand weren't a body who were identified in the act but you do follow the act that would suggest that you're quite keen on the act but do you want to talk to me about what's been the positives of the 2014 act okay good morning everyone so I'll kick off I think that as you've pointed out Scottish Water being a utility is actually covered under the Utilities Contract in Scotland regulations 2016 so that's the regulations that we are working to but as a minimum, Scottish Water ensures that the general duties within the act are incorporated into our procurement processes and outcomes on the basis and there's no conflict with our duties across both those regulations and I'll hand to Joe in a moment just to touch on some of the detail around that building on my colleagues on the right hand side though that takes our procurement and processes very seriously being a utility and being one that is across the whole of Scotland and the type of work that we do and procure ranges from significant construction civil engineering all the way through to digital and that type of activity which is obviously covered by the act but again we're doing that through the regulations but things like transparency consistency and our ability to track what I would say significant contractors to smaller expertise within Scotland as part of the fabric that makes up our procurement within Scotland and just noting that 70% of our supply chain are small and medium enterprises all the way across Scotland so I don't know if you want to touch on any specifics around it Good morning everyone in terms of the application of the act we know obviously as Rob says we are not contracting authority within the act but we did at the time agreed to take the general duties on board and put them in as better practice into our procurement processes so we have we do that for all the procurements we've been more looking at how we can get best value of that and actually make those duties come alive in terms of outcomes and that's been more of our focus over the last eight or nine years or so as to really how do we get these outcomes and I would say that generally the act has been a very useful framework to enable us to go after these positive outcomes in terms of challenges we're not we're not in the act so it would be unfair of me to talk to the detail of it we don't particularly find the duties challenging we don't particularly find the reporting elements of it that we have to do in terms of we don't find that bureaucratic we find these things as better practice so we don't really have any negatives to say other than is it time to sort of re-look at the act in terms of is there other things that need to be considered ten years later is there things that need to be reinforced are there things that need to be added so this is probably the right time to do it after ten years to say is the landscape changed is the priorities changed is there other things that procurement and the public sector can do to get more value for communities and is that a process that Scottish Water are going through at the moment or is there any areas you want to highlight with us where ten years later there could be improvements or how it would be for us particularly around the sustainable procurement which you may come on to during the session is an area where I think we need to step back and we consider how the landscape sort of moved on from 2014 of Scottish Water of a net zero target we've got plans it's almost the sustainable duty thing we use it but I think it could really help enable us if it was refreshed a little bit it could really help enable us push that net zero target further in terms of how we operate with our supply chain okay thank you I'll bring in Murdo Fraser to follow by Evelyn Tweed good morning to the panel one of the issues that this committee and our predecessor committees over a number of years have been really interested in is how we can use procurement to support economies and Gordon, you were touching on some of this in your previous answer what I'm really interested in is what's being done to be proactive and engage with local businesses in particular in terms of the procurement opportunities that are there maybe I'll start with yourself Gordon as you mentioned this a couple of things we do is clearly we advertise all of our tenders what we are going to be tend in the procuring we have our annual procurement report which set out our requirements in terms of the year ahead for contracting and we also have some meet the buyer events we've got a procurement for health event coming up in Edinburgh in the 25th of April and we also tend other events like the procure X which is the big event in the autumn we're also going along to the supply development programme event in Glasgow in the summer so we do do that we also have used the procurement process in terms of pinnotes market awareness days and engage with suppliers that way another element I think probably worth thinking about as well is when we award our contracts we also work closely with our main suppliers typically and support them in what they do within their supply chain so for example 100% of our fresh milk comes from farmers we tender that on a lotting basis happened to be one company a Scottish company one that contract but they work with all the local dairy farmers to deliver those that milk requirement across Scotland same with our fresh meat so 100% of our red meat pork meat and lamb comes from Scottish farmers we have three national contracts that are let but they engage with the supply chain and it's that kind of approach of continuous development and working with our main contractors as well as opening up our contracts for lotting and allowing a business to apply for the main contracts as well okay and just one follow-up to that we often get feedback from businesses that they'll submit tenders but they get no feedback on why they were unsuccessful do you have any mechanism to provide feedback to unsuccessful bidders? yeah so everything over £50,000 covered by the act it requires us to do debriefing which we do and certainly our contracts are much larger than our average value contracts about £4.6 million so we provide the formal debriefing process so that's the art of the award before the contract entered into to attend the stamp still period and that provides bidders with a formal written evidence of why they were unsuccessful where they ranked in terms of the other competitors and it allows them 10 days to ask any queries over the scoring or how we've come about the answer and indeed it allows them to raise a challenge if they wish to challenge the award so that's the formal mechanism they want to take okay, thank you Steven? just to follow on from that I guess a lot of what I would say would be very similar to what Gordon has just said in terms of the way that we obviously we're required to advertise things at that lower level which should hopefully encourage more small businesses and local businesses to bid a lot of our universities and colleges to APC attend meet the buyer events so again a chance to get face to face with suppliers and be able to advise them and also direct them to the various ways in which they can see contracting opportunities but I think in terms of also the way that we we lot at APC we do in our frameworks and we kind of lot them and we're always very conscious of lotting them in a way that we can do whatever we can to encourage certainly to not exclude smaller companies so whether that's done on a kind of original basis or lotting them in category lines and maybe try to break things down so we're not putting huge behemoth lots together that only the big organizations that big companies can bid for and we're trying to say we are very conscious of trying to make them more and that benefits us as well we're not just doing it for a favor to local economies it means that we can get more innovative companies you can get better service through using these small companies so it does benefit everybody and also I think also thinking in terms of that lotting it's also thinking about what some of the most appropriate contracts are to kind of break down in that way so again Gordon there mentioned the food on where that also ties in a lot with the sustainability side of things so it presents a real opportunity something like food as opposed to something where it's more just a straightforward product that anybody can provide something where food miles and freshness or whether it's organic or whatever it is something like that there's a real opportunity there to break it down into a way that appeals more to to small organisations and also we get the benefit of whether it's produced locally fewer food miles fresh produce or that kind of thing I'm sure my colleague Brian Whittle will have lots of questions around food shortly but just to ask you the same question I put to Gordon about feedback to unsuccessful bidders something similar obviously we are required through the act to provide feedback for anything that's a regulated contract but perhaps the other thing is if someone is not getting feedback just to approach the contracting authority and ask them in my experience on the buying side of things they are kind of approachable if a supplier just asks for feedback more than likely they would give some level of feedback even if it's not by the legislation they usually are quite open to that approach from suppliers so I think just recognising that the focus on the business and communities for example we recognise Scottish Water has worked everywhere across Scotland so acutely aware of that but when it comes to our actual procured supply chain touching on my comment earlier about 75% of our supply chain is in Scotland in terms of businesses located here and about 90% of our spend is based in Scotland and as I mentioned earlier 70% of our supply chain is small to medium enterprises but when it comes to allocation of work we consider it very carefully between are we constructing a significant new treatment works for example or is it into the smaller infrastructure work which is where it's the balance between the bigger delivery vehicles that we have but also for example we have 65 regional partners and contractors part of our regional framework which particularly across islands in some of the more rural communities we're not relying on some of those bigger partnerships that we have and that's part of our procurement strategies to make sure that we're allocating that work appropriately across Scotland in terms of the transparency how we do it and that feedback question that you've had might be passed to Joel just in terms of our e-precurement and transparency Yeah just a point to build on with Rob I think it's for us the SMU community is absolutely vital for us but just given the fact that our scope of work takes us to the highlands and the islands and the borders and all over the place so it's not just central built activity so we have to build relationships with those small businesses and that's why we've got such a high proportion as Rob said of partners, supply partners in our water community and how we do that is to actually redesign the procurement so that they're simpler in essence for SMEs to go through some of these SMEs they won't be able to follow a more complicated or stricter process, some of them struggle with actually the e-precurement systems that you've got to go through so we've actually had to step aside from that and say well how can we actually make this easier for people to connect with us and we'll actually send people out from our teams to those businesses to actually help them engage in the procurement process because we want them to work for Scottish Water, we need them as part of our network in our community so we've had to think how to engage with smaller businesses and encourage them to work with the sector to pick up on the feedback question similar to my colleagues we provide written feedback against all procurements regardless of the threshold levels and we also offer in-person feedback as an option to all bidders and we find that that's quite attractive to come in and talk to us and ask about how can I improve my tendering, what did I do, where was my weakness and we are happy to provide that feedback in person to them as well because we want them to be successful we want people to come and work with us, we've got plenty of work right, all right, thank you Evelyn Tweed to be followed by Maggie Chapman and good morning panel in 2023 research was carried out into Scottish procurement compared to other UK models and it was found that generally it was a success with research suggesting that Scotland is regarded as a leader in the field of sustainable procurement and it's refreshing to hear that Scottish Water has taken on a lot of these regulations because you thought it was a good idea you thought it would be best practice because normally people try to stay away from that stuff if they can but Jo I'm interested in your comments, how can these regulations be strengthened 10 years on how can they be made better to help organisations like Scottish Water achieve net zero targets etc so I've been just a little bit of background in public sector for over 20 years and I think that I have seen a massive transition in the quality of public sector procurement capability over that time and this is definitely the highest quality of professionalism I've ever seen and that's coming from somebody who's a fellow of the chartered institute of personal supplies and I think that that's part of the strength that the Scottish public sector has is that we're developing high quality talent I think that in terms of the sustainability side I think that there is more development required by contracting authorities on the how to get the outcomes that's needed through their supply chain partners so I think there's two parts to this one is how do we invest in capability inside public procurement resources people to help them get the knowledge and the tool kits and the ability to be able to have the appropriate conversations with businesses on how to get more sustainable procurement outcomes and I think that it's less about adding in more general duties into something more so I wouldn't necessarily argue that we need more prescription I think that what we need is we need more description i.e. what is important to the people of Scotland in this area and then allow the contracting authorities the space to deliver the outcomes that the people of Scotland need I think that we're different now I don't think that we need to be prescribed what needs to be done I think that we need to be described and then allow the talent to deliver the outcomes so that's what I would say more developments needed in the human capital if you like and we need to get more into the business community to help support them in how they can deliver more sustainable procurement outcomes but that's going to take a good number of years it's not an overnight thing that's what we are finding in terms of reduction of carbon for example it's like you've really got to go in and work with businesses you can't just say here's a tick box in the procurement process you've got to actually go and visit them you've got to understand their businesses you've got to actually help them with it in order to then read through the words of that as they start to improve their carbon outcomes as an example I'll just echo what Jo's just said I strongly agree with that in terms of refreshing the act or adding things into that I don't know if that's entirely necessary I think there's already quite a lot within the reform act and also the public contract Scotland regulations which allows a lot of discretion that you can do with regard to sustainability and I think a lot of the across the sector, the public sector and my sector we're doing a lot but to take the next step it's more about it's increasing that level of capability and also the knowledge among suppliers and also the knowledge and expertise internally as well as sometimes anecdotally but sometimes you find that procurement staff are getting a lot of training around sustainability so they're very keen to move on but when it comes to delivering a project or delivering a contract they'll be bumping up against internal barriers where people are saying we're not ready for that or we don't want to go there or we don't have budget so I think sometimes it's been more about the wider capability and resource piece about changing the legislation specifically I was probably going to say something similar in terms of maybe not so much in regulation but I think set out some more shared targets and visions in terms of where to get to but certainly progressive improvements in what these would be but a big element of that is the capacity that we have and bringing in new solutions like digital solutions to release time to procure so we can free up some time and allow people to have that space to deliver on these initiatives so we have some great new tools in terms of sustainable prioritisation and tests like that so we use those to focus our attention on how we can make the most impact on our contracts and that kind of additional continued training that people have already mentioned are really important not sure if that requires different regulations or new regulations Maggie Chapman Good morning to the panel thank you for joining us I want to just explore the issue that Evelyn has raised we know that there's a lot of effort put in to think about procurement as delivering positive social, economic and environmental outcomes as well as providing the goods and services that you all need to fulfil your functions and I suppose I'm curious as to how you see those outcomes being determined and being set and your role as procuring agents in those discussions do you have clear lines of conversation with other agencies or internally within your own organisations around how you can actually use your procurement power to tackle gender inequality for instance how do you see the setting of outcomes or the aspiration of the procurement outcomes that aren't about service delivery or getting the stuff that you need and I'll start with Gordon and work along if I may I guess it's quite interesting that procurement has become a way in which we can deliver better health so healthy working lives and that focus on healthy working lives queuing to benefits through delivery of that into our communities these have all now become very much front and centre of what we're doing and it'll be a contract by contract subject by subject based on terms of what we do some of these things can be clearer in terms of bigger larger construction contracts where we have queuing to benefits more focused on employment but we don't tend to have those types of contracts within my national current area but what we have introduced as a queuing to benefits portal so it allows communities to effectively put on their wish lists of what they want support on and allows us to link them up with our suppliers to build into our contracts have an obligation to consider and deliver on community benefits we've got about 470 community community organisations signed up to our portal and we've got 530 suppliers and this year we set a target of 34 community benefits to be delivered and we've achieved 40 so far already so those kind of ways in which we're doing that part of it and delivering something important to communities but in terms of the kind of healthy working lives fair work first that legislation that we're following that last year in our report 111 of our national suppliers where living wage organisations and my own organisation national service Scotland is an accredited living wage organisation as well so that's the way we are doing it and we're useful to have some additional target set in terms of areas of specific interest through policy and then we can react to that because often procurement is seen to be a lever that you can pull we can nudge the super tank around a wee bit and we can respond to policy decisions so just that last point there around targets or identifications of the kinds of social or environmental impact that we would want to see what would you see those coming necessarily from government whether that's national or local or would you see that as being community led perhaps or a mixture of things I think a combination, yep, absolutely Okay, thanks Gordon, Stephen Yeah, so in terms of determining the outcomes so within APUC we have a responsible procurement team so at the start of a new framework or project the person who's leading that would engage with the responsible procurement team and then it would be a case of looking at what are the key sustainability risks so obviously it's going to differ from contract to contract, sometimes it's going to be more on the environmental side of things other times it's going to be more on the social or fair work side of things and then it's just a case of seeing the expertise of that team to try and thread things through seeing what impact we can make through the contract that we're putting together and try to do that in an intelligent way rather than just throwing lots of things and seeing what sticks what's the most impact that we can make in terms of what we put into the ITT what we put in what kind of way to be put in the evaluation of contract monitoring is going to be undertaken after that. We also engage with other organisations so we have kind of close links with the EAUC which is the Environmental Association for the Universities and Colleges and also we are on the board on the board for the Electronics Watch which is a human rights monitoring organisation for electronics industry so we kind of take advice from them and they kind of give us things that we could kind of start to put into our frameworks to try and kind of make the biggest impact just kind of talking a bit more broadly sort of mentioned about the who kind of determines what's going to go in there and I guess that seems to depend sometimes on who the end user is because sometimes it seems to be kind of anecdotally from within the sector but you know sometimes some people are very keen to kind of be pushed very hard on sustainability stuff and procurement kind of go along with that but other times the procurement are the ones that are kind of pushing and challenging more for that kind of thing so sometimes if there's not much interest in something then it's the procurement team that are kind of trying to suggest putting you know they're making the suggestions in terms of what they can be put in there so sometimes it just depends depends category to category and sometimes it comes down to individuals interests amongst the end users Thanks very much Stephen I suppose what you're alluding to there is sometimes students and staff in universities campaigning for things actually works and makes a difference to procurement that definitely brings a spotlight on things sometimes and that has directly impacted some of the decision making kind of strats to your input to them Thanks Rob, oh Joe Okay goff, thank you So first of all just in terms of I'll start off maybe at a higher level in terms of the outcomes particularly working together with other partners so in terms of Scottish Water one thing for example right now is climate change and climate change adaptation and that's one of the big challenges for us as an organisation going forward and I guess many others and working together it's crucial for us to succeed to navigate that challenge whether that's different partnerships we're seeking to involve or ecosystems is one of the words that we're actually using in this arena at the minute so part of the outcomes that we're looking at now is that ecosystem rather than necessarily just a direct procurement but it's also about enabling us to work with other partners like local authorities etc and some good examples of that that are starting to happen already but if that's the high level outcomes for example that we're looking at Scottish Water over the long term that then manifests itself down into the work that we asked Joe to do as part of the procurement team within Scotland, Scottish Water align to our overall objectives and one of those is a said climate change adaptation for example but for example when you get into process things like fair work first it's embedded into all our procurements as I start for 10 across the board as you mentioned also and for example we expect our suppliers and supply chain to pay the real living wage for example so those things from a process point of view that we're actually building into the procurement for by the challenge of that nature of what we're asking partnerships to do around us change as we go forward from a process point of view Joe maybe I should just pick up on things like equal page and the pay etc I think one of the key things for us is that my objectives, my direction in terms of the procurement strategy and the supply chain design is based on Scottish Water's clear objectives and ambitions so I've got less uncertainty about what we're trying to do with the sort of billion pounds or so per annum spend that we have so I'm very clear on what value we're trying to get out of that and Rob touched on something we're very much about procuring outcomes so we've looked at what outcome we're trying to deliver and then we work backwards and we build the process to get the outcome so it's not really use a procurement process to figure out what outcomes it would be we actually understand try to understand the outcome and then work backwards on how we can get the process to deliver it so that we've found that approach quite successful in terms of Rob's touch on things like fair work first it's embedded in all of our agreements as is the real living wage and what we do is a lot of this activity isn't just in our frameworks or contracts, we actually go out and spend time in the business community to see how they're getting on with it so we go out and through our business relationship processes go out and actually meet businesses, talk to them how they're getting on with fair work first how they're getting on with real living wage how they're getting on with gender equality and what we've found is that having tick boxes on a procurement for gender equality and things like that isn't that helpful, it doesn't really move the dial at all you've actually got to go out to the businesses and talk to them about the importance of gender equality and about what their plans are and then you know where they are and what challenges you've got with it is there shared learning resources that we can provide them to help them it's more post procurement than in procurement is what we've found to actually get the value out of it to move the dial on the value a fair amount of fair work first real living wage and gender equality for us is all done after the fact when we're in these relationships and go out and actually make them come alive okay, okay, thanks you've all in your answers today talked about the need for internal consistency and training and awareness raising so people actually understand why you are trying to procure for good I suppose this is maybe a difficult question to answer briefly but how often do you find that the positive outcomes we've been talking about such as promotion of fair and ethical goods of fair work reducing inequalities, gender equality all of these things how often are those sacrificed because of cost and how much of that could be allayed by the consistency and coherence of awareness raising and training and the longer term social environmental benefits that we see I don't know who wants to pick that up first Rob procurement are solely based on price and certainly myself and colleagues will be working with Joe will look at things that have been mentioned already like the social value for example safety, innovation etc so we build that into all of our procurement and price obviously has a weighting as does the other aspects of procurement and I guess those weightings and those elements are based on the types of procurement that we're doing whether it is looking for an absolute surety of outcome by time or whether it's something more in that partnership, learning, innovation space and certainly that's the basket of elements that we use in scots water so it's not solely based on price but folly for money is obviously very important as part of the process that we adopt across the board I think what we've had to do is consider can we do things like two stage procurement where we can focus on the price and cost value for money and then focus on other values like carbon and other social values because if you're doing a one stage procurement and you've got 100% of evaluating something like this so that the social value could end up 10% so it's not necessarily going to be a huge weighting impact so we've had to really consider how evaluations are done and can you do them in a different way to give these things much more space and importance and can you actually just weave them in as principles and expectations and as I said earlier on actually then get the value out in the post procurement arena and that's what we are finding especially when you're dealing with SMEs if you're dealing with SMEs and you're trying to take them through social values stuff and all the rest of it it's actually better to just in our experience to talk about the principles of it and get them to sign up to the principles of it and then in a post procurement environment then get into the hard how we're going to actually deliver on that and we've found that much more we can really move the dial taking it out of the actual procurement exercise if you like and putting it in a different environment so get the principles agreed and deal with getting the dial moved in the post procurement environment that cultural buying is important that's the critical part is getting them into buying into why it's important but actually putting weightings on it we've found that to be almost counterintuitive okay thanks Gordon and then Stephen if you want to come I think we step in these things first to get good patient outcomes so that's where we start we then have lots of risk assessment tools to consider what the individual risks are within that contract and we also have commodity advisory panels which is subject matter experts that help the procurement people and the procurement teams establish what the award considerations should be in terms of technical quality sustainability environmental etc so that's the method we go through so everyone's on a case-by-case basis and it's relevant to subject matter but we don't do anything on price only and I've got examples of the ones where they're 30% price or 70% price whatever but often there's mandatory requirements as well where you must achieve certain things and at some point we have ethical procurement standards we have mandatory requirements in our area so we bidders don't get into the room unless they meet certain minimum requirements which gives us assurance of what we are what we're going to ask for people can respond in a good way and get good patient outcomes Thanks Gordon, and Stephen Similarly we don't ever make any decisions purely based on price I think one of the key things is around trying to thread sustainability into it, it's not just rather than being a separate kind of add-on piece trying to thread it through in terms of the strategy and obviously what goes into the specification and threading it through the questions so it always underpins the evaluation of it and I think one of the key things as well is about trying to be to maximise the impact that you can make with regards to and try to be quite targeted in what you do with regards to sustainability I think one of the best things you can do with regards to sustainability is to really think about it up front and think about what it is that you're buying and then depending on what it is what are the key risks what are the things you can really make a difference in I think sometimes where things might get bogged down is where you're throwing lots and lots of requirements at something where they might not be that relevant and then sometimes someone will be and that's where you start to get the complaints about it being there's just too much admin and that kind of thing but I think if you can if you can do it intelligently and as I say and then it starts to feed into the actual outcome as well so you mentioned the sort of sacrificing certain things for the sake of value but actually if you do it properly then actually that it shouldn't be a sacrifice because actually you'd be able to demonstrate the value it's not again be an add-on and becomes an integral part of what it is that you're actually buying and so for instance with something like Fair Work if there's a clear link between what it is that if the outcome is linked to better employee happiness or satisfaction that kind of thing then actually you can clearly demonstrate well actually if we get this bit right there might be an increased cost in terms of the wages that we pay or the kind of benefits that employees but actually we end up with a much better contract which is delivered to a higher standard or whatever so I think that's the ideal way of doing it I think is being able to kind of really target the kind of most important sustainability aspects and then as I say then it becomes a kind of a key part of what the outcome is and it's all bound into one. Okay great thanks very much Colin Smith we call by Colin Beattie. Can I just follow up on some of the points raised here one of the issues that local authorities raised was about the challenges over monitoring and capturing data on subcontractors once it was a contract begins in that wider supply chain and they made the point that the contract evaluation stage their evaluation panels consider the fair work response that's submitted by the principal contractor but they don't have the resources to then follow that through in terms of monitoring what actually happens when it comes to subcontractors on this. I suppose starting with yourself Robin Joe because you did talk a wee bit about discussion of supply chain how do you monitor that those fair work principles are actually being delivered when you've got a big capital project it could be going to a contractor and then subcontracted in a whole range of way. How do you know those subcontractors are delivering those principles? Okay I mean I'll ask Joe to step in in a moment I think he's already touched in terms of his so far about the visits and the attendance and all that and going out and actually testing so I'll ask Joe to come in on that I think in terms of the way that we structure ourselves post procurement on some of the significant investments we have strategic boards we have all the evidence and things you would expect to come through that whether it's relating to safety, health, wellbeing, financial performance, milestones delivered etc so I personally sit in some of those strategic boards with colleagues from both our subcontractors and main contractors so that's part of the test and the governance that we put in around there particularly in the key data capture we also have a number of data capture activities particularly from a health and safety perspective that we drive consistency of information and evidence which ultimately comes back to us to I guess give a balance score card and performance or areas that we would want to go and look at and it's interesting because we actually have what we call SMEs that work for us directly and then we have SMEs that work indirectly for us through our main contractors as well so it's about the consistency of approach that we're driving there I think one of the things that helps us and it's not that it doesn't diminish the need for human approach to this but it's some of the systems and the systemisation and digitisation capturing that information and that's something that we're working very closely with our supply chain on there's actually more to do to that in our future procurements around actually what I would call digitally integrating our system a lot better and that's enabling the data capture right from source to come to somebody like me Joe does from a procurement perspective the actual visits and the data capture I'll ask Joe to touch on that so subcontracting so we do have subcontracting but what we do is that the Scottish Water looks to create a supply chain design that has multi layers of procurement in it that we do so we have very little where a primary contractor will actually go out and have its own supply chain we will actually build that supply chain on behalf of the primary partners and that's a little bit unique and we can go up to three or four levels of depth in the supply chain and that gives us what we call an ecosystem so we've got primary partners actually drawing off of the wider supply chain that we have procured which means that we can then embed fair work first, we can embed sustainability stuff, we can do that and we can do that right across the different layers and complexities of the supply chain and as Rob says we're trying to then digitally enable that information a little bit more than we have but all of this ecosystem that we see here is actually all available to all the partners so if I've got a primary construction partner that's doing work for Rob they can go into it's actually the PCOS Scottish Government system that we use we've got literally 400 catalogs in there 21,000 individual lines and they can go in there and just draw off what they need from any element of the supply chain that is critical for us because we can then get traceability and we can get transparency of what is going on there in terms of real living wage in terms of fair work first in terms of gender stuff so that whole supply chain visibility we don't see subcontracting as not a blocker for us it's just a part of a wider ecosystem supply chain I imagine Stephen building that for dozens of individual colleges and universities would be quite a challenge for yourself but I'm keen just to hear how you would monitor how your college university monitor that across the board but I'm also intrigued by something you said around the tension between best value and the other requirements from your submission in which you said potentially the requirement to consider is also leading to the stifling of best value and innovation contracting authorities can be focused on including all aspects of policy fair work environment etc that becomes a box ticking exercise and dissuades smaller companies from bidding I'm quite keen for you to expand on the challenges there around that tension Just on that point I mentioned earlier in a previous answer about trying to be quite targeted in the way that we think about sustainability with regards to any given particular requirements but I think that the danger sometimes is that where if procurement becomes seen as being the vehicle for delivering every type of different policy then it can kind of get if it's not done properly it can get a bit overloaded so it can be for a fairly standard low-ish value just into the regulated space but if it's what you could find if there's lots and lots of additional things that are thrown on top of that in terms of what we're asking suppliers for then there's a danger then that it becomes more about the part of the specification is quite small and then there's a whole load of raft of sustainability things tacked on to the edge and say if those things aren't relevant then what you might end up finding is that small suppliers might be put off because we're asking them for all sorts of different policies and procedures and these kind of things that an SME might not have and again if we're talking about a smaller value requirement they might just think they might be put off by that what you might also find is that you get certain companies that might be very good at answering those kind of questions but there may be a company that's better at delivering the requirement but because if you've piled if a contracting authority piled lots of irrelevant things into it into the ITT then you might end up with a kind of imbalance where the company that wins is the one that gives all the kind of right answers on sustainability but actually what is it that they're providing so I guess that was the kind of thinking behind that question I think it's just a question of using being more intelligent how you approach it and not just kind of throwing everything at the wall and seeing what sticks and Gordon obviously feel free to comment on how you monitor beyond the sort of main contractor but also it's no secret that the NHS is facing some huge financial challenges my local health board just announced they've got a £35 million deficit this year alone it must be the case that one of the ways in which you're seeking to find savings in the health services through procurement that must be the absolute driver price at the end of the day when it comes to delivering to what extent are you using procurement to try to make the significant savings that you're having to make and what issues does that cause around some of these other issues around fair work and the environment et cetera So being that way calling my years in the NHS we've always used procurement to try and get best value delivery but it is absolutely the mix to make sure we're getting the right products and the right services so I don't think there's any conflict there one of the things that our my national procurement team we've got £1.5 billion in contracts so a big element of that with a big inflation period we've had is to maintain those prices and to keep a lid on increasing prices and we do work very closely with our health board teams about introducing change, different products and suppliers, best value et cetera and that's just part of what we do so you're right that it is a key element in terms of how we are going to help and support our health boards with the financial situation that we are we're currently facing A brief question for you all Scotland's a fair trade nation and public procurement's an important part of that Scottish Fair Trade Forum a few years ago did a piece of work with the FOI public bodies to ask how much you spent on fair trade products to say it was a mixed bag we'd be understanding now that may very well be you just don't monitor that you don't just capture that information but certainly they said there was no expenditure from Scottish Water and Fair Trade products College University, is it varied from university to college University of Edinburgh for example there's some innovative work around using fair trade graduation gowns and actually the specific contract on that others said they didn't spend anything which again probably comes back to I suppose how you monitor that with some real big figures in some areas and very little in others so is fair trade on your agenda at all when it comes to procuring products and what do you do about it so I think we now have some fair trade products in Scottish Water mainly through into our in the food side and our canteen environments and things like that so we've made sure that fair trade is embodied in there in terms of we were actually looking at fair trade in a slightly different way we were keen to so we've created a wider ecosystem approach and what we're actually keen to do is to offer the fair trade community an opportunity to be part of that ecosystem goods and services or products that could be used by the water sector so not necessarily have to take them through a procurement exercise or and like that just to sort of like bolt them on into the ecosystem so that they can actually get their products and services used where it's appropriate so that's really where our next stage is with it is to really reach out there and say and part of it is communication so that we have to go out there and say this is what the water sector is why don't you come along and learn about it and we can learn about what you have and can you then bolt through into that wider ecosystem Do you measure the value of that within your overall procurement? Yeah, well we would measure the value of that in our overall spend because I don't think there would be any value doing it through a procurement exercise but I think that we could establish that. We're probably spending about maybe about 20,000 at the moment in fair trade products a year but I think that in terms of if we can actually look at this different approach we could probably multiply that if the products and services are there that we could utilise Stephen and Sir Yeah, with regards to fair trade I know that some of the universities and colleges if you walk into the building they say they're fair trade organisation I think it's probably part of a wider approach to ethical supply chains more generally I think if looking at any particular requirements then at that starting point when you're looking at what does that requirement look like and you're identifying the risks around ethical supply or where are these goods and services coming from what are the risks that are around there and then if these are the risks then what can we do to address those risks so fair trade may be a part of that there's been some case law around the use of the fair trade trademark and so obviously if you can specify something being fair trade you have to open the door for other things that may not have that in trademark but have an equivalent but I think again certainly in our sector a lot of people would be on board with that a lot of the fair trade is around food and garments and that kind of thing so I think typically for those kind of areas that that would be a focus to say that that we would ask for some things to have been fairly traded or ethically sourced and then try and specify a layout actually what that looks like so people asking suppliers to kind of tell us about what their supply chains look like how they manage their suppliers telling us where the goods come from and to say what they do to kind of manage those risks but I think another point that you mentioned is around the kind of monitoring so I don't know what the level of monitoring of what fair trade products that the universities and colleges buy so I think some of them probably do but I think just more generally I think monitoring is kind of a huge area particularly around sustainability so what we do a lot in the public sector around putting a lot in there around sustainability up front in ITTs and I think probably the next thing is to really start looking at what some of those outcomes are and doing a lot making sure that things are actually been delivered through contracts and obviously it's a good story to tell at the end to be able to show that these things are being delivered in the fact that we are monitoring them Just on that point Gordon that is a mixed bag across the NHS it probably does come down to monitoring as much as anything else people don't always measure the full range of goods that they might buy as fair trade is that a challenge for the health service? Are you asked to even do that at the moment? There's probably a bit of information I need to come back to you on we certainly build in as Stephen says the procurement within our food contracts so there will be a range of requirements within our food contracts which I can bring the information back to you I don't want the information on the fair trade label and as Stephen said I know there was a requirement for us to set out what ethical trading is required rather than saying it must be a fair trade label and that the suppliers respond to that and things that are teas, coffees, hot brews and no reinforcement lines for your trade but I can get the additional information That would be great Okay thank you I'd like to make some progress now so if I ask members and witnesses to keep their answers as concise as possible that would be helpful and if we draw us back to the 2014 act which is what we're scrutinising this morning I'll take Colin Beattie to be followed by Brian Little Mention has already been made of procurement as a vehicle to measure costs or even reduce costs We've heard that goods and services which perhaps costs more up front may over a period offer better value for money How to what extent are you able to make decisions which are informed by calculating that whole life value of the product or service that is being provided and are there any barriers to that and maybe Gordon I can ask you to come in first Yes I think again it's a case by case basis where it's appropriate to consider a whole life costing we'll do that we'll build that in we'll consider that over a 10 year life period or the natural duration of the arrangement and consider that as part of our overall award criteria so that I guess is how we build it in in terms of barriers to doing that I wouldn't raise any specific barriers other than it takes time for our experts in procurement to work with the commodity advisory panel to understand what those life cost implications would be and to build them into a scoring mechanism that allows you to be clear in terms of the reasons why somebody was successful but equally clear in the reasons why somebody was unsuccessful and I think that's always the challenge Colin in terms of people say to me why did that why can't you award to that company the answer has to be well you have to be able to explain to all the other unsuccessful companies why they're not successful so that brings you back to something that has to be quite clear and that would be the challenge of making whole life costing consistent clear fair and equitable and transparent to everybody the whole of the public sector is under pressure cost wise is it is it not true that perhaps this whole life costing and so on is less adhered to simply because of the short term need to save money to stay within budget to reduce costs doesn't that put a lot of pressure on it I think what we're trying to get is consistent sustainable outcomes and I said that support our patient care that ultimately if we get that wrong then that increases cost of the service so I think what we have established is a way in which we can consider all of the different parameters that build up to make a decision on which is the best product to buy and that's what we follow it would be we wouldn't be moving towards a point where it was price only that wouldn't get the outcomes that we need for our patients in terms of whole life costing I mean similarly to as Gordon just said we did try and do that to the extent that we can obviously we try and build up cost models which would take in the running costs and the end of life disposal costs and that kind of thing so try and build up a picture of what's the total cost of ownership of a particular product for instance so I think we do try and do that as much as possible I suppose in terms of the challenges I guess one of them is the modelling of that kind of thing things can start to get quite complicated sometimes it's alright if you're doing a sort of product installation maintenance disposal type of thing and you can kind of show that over a number of years but if it starts to get overly complicated then you kind of run the risk if you start to try and factor in for instance energy costs that it might cost how much it might cost to run but then it's difficult to predict what the energy costs might be in x years time and then again as Gordon just said in terms of explaining to a supplier that they may have lost out on a contract because of this model that you've built that model obviously has to stand up to a decent amount of scrutiny so it tends to play on the safe side of things but I do think to your point earlier in terms of the short term thinking I think as a sector we're reasonably good at the medium and long term but I think there's certainly a bit of the year on your budget type of thinking which sometimes stops things stops people if people don't necessarily have the budget in a given year to take the product that might last them several years then they might take the decision to kind of renew something every year or every couple of years where actually if they were able to they might prefer to spend the money to buy something that would last the longer but as I say sometimes kind of annual budgets can sometimes stop that kind of long term investment to be like and perhaps either Robert Joe I think just a high level response to this as quick as possible is that if I start off at the upper level what Joe's touched on already is how transparent and clear can we be about the outcomes that we're seeking and I guess being the type of organisation we are we deal with some decisions that we have to make today for tomorrow but we make decisions that we're making today for well well past tomorrow in terms of that long term activity as an infrastructure you know utility and I think just to touch on Stephen's points we have models that will model out that longer term journey that we're on and then if I can fit that and the visibility of those outcomes with the procurement that Joe runs then that's where we get out of the I guess the cycle of short term decisions affecting some of those longer term outcomes that we're seeking clearly again value for money for our customers is important at that and unlike the annualised side of this from a water point of view we're in the six year regulatory period and we're already starting to look at the implications for the next period and beyond as part of our strategic planning so I think that the short answer is the more we can link transparency of outcome visibility of likely work we can balance that with our investment appraisal process which will give us the right solution which then hopefully allows us to procure both for the short, medium and long term to get that value for money Let me just go to a slightly different subject which is we've heard a lot about framework contracts and lotting now how much of experience been how much of a challenge is it to make these opportunities accessible to smaller and maybe regionally focused firms while sharing the risk and ensuring the good value it's quite tough Gordon I'm going to come to UNHS We do use lotting I'd ask this question before we came we had 46% of our national contracts have lots in them some of them are broken down into very small lots are specific to product types some are split into regional lots by health board region so lots of food contracts are in those areas and that's to encourage and allow access to smaller packages of cost and more specific requirements so that's how we establish it I think sometimes it is still a range of bidders for the individual lots I think the example was given was in terms of milk we brought that down to lots for every health board region in Scotland but awarded to one supplier because of the lack of competition as a Scottish supplier so that was good but there wasn't many small businesses and one of the reasons on reflection I think our team have said that different organisations have different businesses so other big milk providers might do doorstep delivery type services other words focus more on creamery cheese areas so that there's a small number of suppliers in that particular example so we do try and do it and we do try to encourage as many suppliers as we can to come to it other ones we will have a single lot but that is by the nature of the product and it still is able for businesses to to compete for it we've just actually awarded a contract for imaging equipment and we have a new Scottish SME who's now come on to that contract competing against some of the large multinationals so it will be interesting to see how we're going with those and to help that to help that general award of business we've just shown tell a couple weeks ago and along at Ingolston where the suppliers have come met with 70 of the seniors of consultancy consultant medical technical staff from Scotland to see what the suppliers can offer and encourage competition one of the things we've been hearing from witnesses is how difficult it is to access how complex the procurement process is how do you tackle that? how do you tackle that? particularly so for small companies that don't have the huge resources to be able to put together complex documents or the experience in it I've seen the submissions we've had and we have our supplier development programme we have our Scottish supplier group which we meet with we meet them just in the autumn there we are going through a process through colleagues in the Scottish Government to re-procure our procurement our procurement systems so the e-procurement Scotland and our public contract Scotland tenders is going to be re-procures we have an opportunity there to work with our suppliers to ensure we get systems which are more user friendly so that's a piece of work that's going on going on just now and hopefully that'll help and make it reduce some of the barriers to entry and digital solutions is the way ahead to make that easier but in other spec we are procuring complex products and services and we need to make sure we get that right so they won't by the nature be straightforward and simple contracts or tenders just by the nature Stephen just to briefly add to that in terms of if you see what's going on in our frameworks as well but I think just to to add to what Gordon was saying I think one of the key things is obviously around market engagement so it's around understanding supply markets and being able to structure lotting based on market intelligence and I think it's also APC has been around for several years now a lot of our frameworks are going through their fourth iterations and I think it has been an iterative process in terms of how we structured things the first time we did them and then the second time the learning from that and then we're getting on to the third and fourth and hopefully we're getting better at doing more I can think of frameworks that we've done where the first time we tried to lot something maybe the geographical lots were too broad or the category the way that was split by category was incorrect the better knowledge and understanding of the market then you can start to tease out more and better competition because of better structuring but it has been a sort of a learning process but I think market engagement is one of the key things Scottie Froger in terms of lotting we do use lotting but I don't really see it in the same way we try to look at what outcomes that we're trying to deliver and then build the procurement around that so we tend to use lotting sparingly with 70% of our supply chain SMEs we've got a lot of SMEs so what we've really had to do is to desensitise the procurement process a little bit and acknowledge the fact that we have to spend more time helping these businesses to engage with this and be part of our community so we've had to really pivot in terms of normal procurement versus SME procurement and learn about that and change the procurement and change the questions and change the support network around them so we will actually go out to the Highlands and the Islands we will actually visit organisations and we will actually sit in our kitchens if necessary and actually help them which we've done in different communities so whatever's necessary to help these businesses to become partners into Scottish Water Supply Chain that's what we will do so less about the use of lotting more about rolling the sleeves up and helping the SMEs to get into working with Scottish Water is our approach Thank you You've been a still good morning I was just checking I wanted to actually look at a practical example of this idea of up-front costs higher up-front costs potentially delivering or should be delivering a better long-term result and I can't think of anything that's more relevant Mr Beattie than the deliver of the food that we give to our patients and the last time I looked at this in any great depth there was a huge disparity between NHS boards around potentially a hospital's ability to prepare food on-site or where it seems to be going with development of facilities where food is prepared off-site and brought in surely it must be really difficult to procure into the NHS the size of the NHS you know locally prepared locally produced food and locally prepared food I'll try and answer that our part of that pieces is to secure good quality product through our national contracts and we do that a number of ways we've explained that we tend contracts in place for fresh meat fresh milk etc we also have main suppliers who have supply chains that we are able to nominate products on to so a couple of examples that I was saying in terms of how do we get quality built into this is that we have example we wanted to create a source of sustainable haddock we engage with a sustainable fish provider in Aberdeenshire our team were up there they went on the trawlers they agreed with the supplier what they wanted and the fish has landed fresh into Aberdeen its process in White Hills which is near Bamfyn and then provided through our main contractor into our Scottish supply chain so that's an example of how we can work quite closely with local businesses and bring that food into our supply chain that then is drawn in by our catering teams from across Scotland and put into the mix in terms of the way in which they provide catering to the hospitals another example would be in terms of the good food nations bill we work closely in Fife we have a requirement for a new baker coming in in Fife and we've been working closely with them in terms of that supplier development helping them with tendering and supporting their input to tendering and again we link them into the main supply chain the main contractor supply chain so in that way we can support new entrances and requirements so that's generally what we do and the ingredients are then drawn down by our catering managers who are the experts in terms of what they need to provide the food requirements in that area I think again I'm going to go back to this disparity the last time I looked at this in any depth we had there are some fantastic examples and you've highlighted some fantastic examples but there's also some issues where food is being plated prepared and plated outside of Scotland as far away as Wales and then driven up to our major hospitals and one of the big concerns in the wastage was around 55 per cent now that doesn't help us to transition to next year now this is not I'm not putting you in the spot here but we have to have a look at in terms of if you're unable to prepare food on site we have to import it and my concern would be we were important some of that prepared and plated in Wales and driven up the M6 so I guess I don't know if I can specifically answer that question in terms of the food coming in from outside the area I need to confirm if that's something we actually do or is that something that's procured locally through our help I'll check that out first of all but certainly what we require is to support our catering teams and ensuring they have the quality of food that's required for our patient needs you know so that's our focus I can't really answer the question on the you're procuring centrally for NHS but local boards have the capability of procuring their own we create national frameworks that people can use and draw down from but if the catering strategy is different within a local health board we may not use it that way so there is that choice I guess I'll probably need to take that back and come back to you with an answer it's more about a catering strategy rather than a procurement strategy so I can certainly ask colleagues who are more close to that to come back and give more information on that it would be real help we want the highest quality food in front of our patients so if there is a way in which we in this place can change the way in which things are done I would appreciate that I'll leave it there if I can if I can, convener OK, thank you very much and it's still a good morning panel I wanted to ask you about public contracts Scotland website it's been on the go since 2008 and when it was introduced it was a really good improvement where we were previously but what's your experience as buyers now using that website and is there anything that you could see that could be an improvement as we move forward Gordon you mentioned that it's currently under review can you say why it's currently under review where were the difficulties you're now trying to address it's kind of a end of life in terms of this commercial tendering contract we've been extending it we, i.e. colleagues in our Scottish Government who are responsible for it have been extending it and we're going to see that coming to an end over the next couple of years and we are doing a national re-procurement of that of those services that provide us with the e-procurement solutions Public Contract Scotland tender the e-tendering system as well as an analytics piece not my direct responsibility but we are we'll work very closely we'll be on some kind of expert panels and we'll help and ensure that we get a modern fit for purpose product okay Steven the same question yeah, I mean similarly I think obviously it's been a sort of a very useful tool that has gotten to this coming to the end of its life I personally don't have much interaction with the tool so I can't give it a sort of a too much of a view but as I say I think we're also engaged in terms of the kind of re-procurement and in terms of feeding in and gathering that kind of feedback from around the sector so hopefully whatever the next iteration looks like will be kind of an improvement again okay and Joe you think you don't use that platform you've got your own e-sourcing portal how does that compare with or have you made any comparisons with Public Contract Scotland website? yeah, we do use elements of it for the hosting of our catalogs so if you can imagine a big Amazon site so all our frameworks and contracts are on a big Amazon site inside the Scottish Government and that allows all our partners and our supply chain ecosystem to all use it so you get amazing compliance because it's all there and everybody likes to use Amazon so we've built it in there in terms of the procurement element of it it's not suitable for utility procurement it's very created around public regulations so we found it, initially we were in it and we found it incredibly restrictive and had a few challenging conversations with our Scottish Government colleagues about how it was restricting our ability to do stuff so we pulled out and away and created our own e-procurement platform to give us the space and the air if you like to be able to do what we need to do within our own regs is there any functionality that your platform has that we should be building into public contracts Scotland's? That's a really interesting question so our platform is really based on invitation to negotiate and it's really quite sophisticated to be able to do and plus to innovative partnerships so we're using quite different types of procurement approaches that a lot of our colleagues in the public sector are not utilising the same so if I had one wish it would be can everybody use the negotiated procedure as a standard and drop open and restricted procedures and put them historically somewhere else because I think public sector in Scotland would generate much more value for money if it actually negotiated and trained its procurement teams to do effective negotiation around that but that would be more plea Thank you I think all bases are perfectly linear I'll thank the witnesses for attending this morning contributing to an inquiry and I'll now suspend the meeting and move on to private session