Maximising the impact of Public Procurement

It’s no small task to make public procurement an exciting blog topic; however, when you prefix it with ‘socially responsible’, it suddenly becomes much more enjoyable! Let’s consider that the public sector in Scotland spends around £14.5 billion a year buying goods, services and works. We can appreciate this is a significant investment and a critical current and potential market for the third sector. 

In 2006, the Scottish Government commissioned a comprehensive public procurement review, which sparked a collaborative Procurement Reform Programme involving the public sector, third sector and the business community. Not everyone might agree, but policy and practice around public procurement in Scotland have undoubtedly improved as a result. Public procurement is recognised as a key driver of inclusive economic growth – supporting enhanced social and environmental wellbeing and community benefits. 

A Vision for Procurement in Scotland

In support of this continuous improvement journey, in April this year, we welcomed the publication of the first Public Procurement Strategy for Scotland, which reaffirms an ambitious vision to place public procurement at the heart of a sustainable economy and maximise value for the people of Scotland. The strategy provides a vital roadmap to drive this vision forward. It helpfully reinforces the requirement for public bodies to buy in a way which is: Good for business and employees, Good for society, Good for places and communities, and Open and connected.

This vision reflects that procurement affects many people, whether as users of public services, those involved in delivery, staff of the buying and supplier organisations and across communities. The strategy aims for ‘socially responsible public procurement’, which is about achieving positive social outcomes in public contracts. It provides a broad scope to consider all relevant aspects of social, ethical, human rights and the environment, Fair Work and supply chain impacts. So, beyond those directly affected, socially responsible procurement has the potential to deliver those wider social impacts.

Public Procurement and the Third Sector

The third sector is active in many spheres relevant to public procurement and reforming public services. Rich in diversity, the third sector delivers people-centred services and addresses deep-rooted societal challenges, including meeting climate & environmental challenges; financial inclusion; addressing inequalities, fuel and food poverty; social housing; community transport; employability; health and social care; supporting resilient communities and improving wellbeing. 

However, there remain challenges for the third sector in gaining a more significant foothold in the public procurement market, as evidenced by Supplier Survey research commissioned by the Scottish Government (2022). This study explored the experiences of third sector organisations (and newly formed businesses) concerning Scottish public procurement. A range of barriers were identified, including lack of capacity, the complexity of procurement processes, lack of feedback from public bodies, insufficient lotting of contracts and difficulties in navigating procurement systems.  

While stakeholders recognised that the Scottish Government and the wider public sector have made significant progress with procurement in recent years, participants raised concerns that this doesn’t always translate to local implementation improvements. Addressing consistency in good commissioning and procurement practices at a local level requires some urgent attention. It will be increasingly crucial in reforming public services and in delivering on Community Wealth Building in Scotland.

Delivering the Procurement Strategy’s Vision

The sustainable procurement duty introduced in the Sustainable Procurement Reform (Scotland) Act 2014 is critical to realising the strategy’s vision. This duty requires that before a contracting authority buys anything, it must consider how it can improve the social, environmental and economic wellbeing of the area where it operates, focusing on reducing inequality. It also requires a contracting authority to consider how its procurement processes can facilitate the involvement of SMEs, third sector bodies and supported businesses and promote innovation. 

While contracting authorities are required to publish an Annual Procurement Report setting out how it’s performing against this duty and helping to build a national picture, the Scottish Government published an Analysis of the Impact and Value of the Sustainable Procurement Duty (Dec 2020), which included several recommendations for improvements. In particular, this pointed to strengthening actions on engagement with the third sector and promoting innovation.

From a third sector perspective, we want to ensure that best practice in commissioning and procurement continues at pace – and in parallel, we need to continue to build the capacity of the third sector supplier community to support a fairer, wellbeing economy that has positive impacts at the community level. More than ever, public procurement, including how we design and deliver public services, will require innovative approaches to realise those more comprehensive social benefits that can help address deep-rooted inequalities, support quality jobs, fair work and person-centred outcomes.

Guidance and Support for the Third Sector

On the back of the Procurement Strategy launch, GCVS was pleased to be part of the collaboration group, which has developed one-stop-shop Guidance to support SMEs and Third Sector suppliers in engaging with public sector procurement. This Guidance is now published on the Supplier Journey. It is a useful additional tool to navigate public procurement – whether your organisation is new to tendering for public contracts or wants to improve your awareness or chance of success. In addition, GCVS and partners on the Procurement Supply Group will work with the Scottish Government to develop a Supplier Support Action Plan to help reduce the barriers for the third sector, SMEs and Supported Businesses when engaging with public sector contracts. 

We need to appreciate that supplier capabilities, particularly smaller third sector organisations, must transition accordingly if the sector is to take on a more significant role, and we hope that supplier guidance and support programmes will be helpful here.

Reforming Public Services

Since the Christie Commission was published in 2011, Scotland also embarked on a Public Service Reform programme and the long-term direction was set. This implies increasingly localised, preventative and personalised public services. To support this, public sector commissioning and procurement approaches must be bolder, more risk pragmatic than risk-averse, and create the conditions for an increasingly mixed economy of provision, valuing the third sector as partners in design and delivery. 

In the social care context, The Review of Adult Social Care sets out a compelling case for change concerning commissioning and procurement approaches. This points to empowering people who use services, valuing the third sector, valuing the social care workforce and embedding a human rights approach to social care. When continuously considering actions to improve commissioning and procurement approaches, we shouldn’t lose sight of the recommendations across this work, particularly those under Commissioning for Public Good. 

Key to this is improved relationships between the commissioner’s role and procurement and a closer engagement between commissioners and the third sector. Furthermore, by genuinely listening to the voice of lived experience, service specifications and support arrangements will deliver outcomes that meet people’s needs and aspirations, reflecting a people-centred focus rather than a process-centred focus. 

While transparency and equal treatment will always be adhered to, embedding social value at the centre of procurement is now an explicit focus alongside Fair Work, climate actions and community benefits. And that’s important because the economic climate over the past decade has shifted from one of growth and optimism to enduring inequalities post-Covid, cost of living impacts and budget cuts – all of which bring into sharper focus a clear case for ethical commissioning and investing in prevention – and the third sector has a significant contribution to make.

Accelerating Improvement

Procurement legislative levers and policy commitments at the national level are progressive in Scotland. Still, we shouldn’t underestimate the importance of changing cultures and behaviours and building trusted relationships at the local level, within and across stakeholders and sectoral boundaries. 

Considerable progress has been made across the public sector regarding a commitment to socially responsible procurement, and the first procurement strategy for Scotland further underlines this commitment. However, we need to accelerate the improvement journey, particularly at the local level, and accept that this will require a collective endeavour to maximise the power of procurement to systematically improve outcomes and bring sustainable, long-term benefits for people and communities across Scotland.


Download our Commissioning and Procurement – Useful resources


Pauline Gordon

Procurement Policy & Employability Partnership Manager, Glasgow Council for the Voluntary Sector (GCVS) and Procurement Supply Group (PSG) member.

#PowerOfProcurement #CommunityWealth #SustainableProcurement

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