How can City & Hackney anchor organisations use procurement to build community wealth?
As part of the City and Hackney anchors network, Renaisi brought together the procurement leads from across City and Hackney’s anchor organisations to explore opportunities for peer learning and collective action across the boroughs.
Renaisi convened an online workshop of City and Hackney anchor organisations’ procurement leads to explore opportunities to deepen the existing connections they have to their local communities, and to test out new strategies to increase the economic benefits for them
Anchors are typically – though not exclusively – not for profit organisations that are fixed in a location because their purpose is bound up in that area. They often deliver services – such as healthcare, education or cultural activities – that benefit the wellbeing of the local population.
They can increase that benefit for local people by more intentionally applying their back-office functions such as workforce, procurement and investments to community benefit. An anchor organisation’s spending is a major economic lever, and is one of the primary strategies they use to tackle inequality and promote wealth within their local community.
Procurement leads from the Councils in both City of London and Hackney, along with the East London Foundation Trust and the Clinical Commissioning Group share a commitment to tackling inequalities and creating social value through their work.
Procurement as a lever to tackle inequality and build community wealth
The workshop was the first opportunity since lockdown began for the procurement leads to begin exploring common challenges they face, and their collective aspirations for how their spending can more intentionally tackle inequalities – exacerbated by Covid-19 – and build wealth within the communities they serve.
Procurement leads shared work they are already doing to use procurement for greater benefit to the local economy and where they feel they’ve been able to make progress in benefitting the local economy and community.
- developing and applying social value criteria to tenders;
- bringing together large contractors with SMEs;
- and using evidence of under-representation in particular sectors to address inequalities.
Common barriers to promoting social value included the resourcing required to engage with new suppliers and a lack of clarity about how existing regulations can be used to support more ambitious procurement for social value.
While the Social Value Act provides an encouraging framework, it remains at the discretion of individual bodies how they guarantee the social value they will deliver. Monitoring and compliance structures would help to make the shift to consistent change on the ground.
Using data to tackle local inequality
The group is interested in using data available locally to understand how residents experience inequalities in different sectors, and how this data could build an evidence base for using procurement as one tool to tackle inequality across the boroughs. As a network, City and Hackney anchors are keen to explore opportunities to use their collective economic influence to tackle issues of common concern:
- Young people who are likely to be disadvantaged within the labour market as a result of the current economic challenges; and
- Black and Minority Ethnic communities who have been disproportionately affected by Covid-19 are considered a priority.
There is much that can be done to use public procurement to support, grow and engage local VCSEs in public sector supply chains, and to prioritise some of the positive social, environmental and economic outcomes that they contribute to. In Chicago, CASE (Chicago Anchors for a Strong Economy) have been working with large health anchor organisations in the city to make their procurement processes more SME accessible, and working with local SMEs to support them to get in a stronger position to bid for contracts with anchors.
Social value and procurement after Brexit
There was discussion about the Social Value Act, and how procurement leads had – and could – use it to tackle local inequalities. Some of the anchors had begun applying social value criteria to tenders as an open stand-alone scored question within a bid weighted at around 5 per cent.
Other anchors were becoming more specific in their requests to suppliers; using evidence of disadvantage to identify the benefit they could add to social and economic outcomes relevant to the industry, product or service they supplied.
The prime minister stated back in 2019 he would “fundamentally change” public procurement rules to “back British business” so there was some debate about how far the Act would (or wouldn’t) allow organisations to focus on local providers of goods and services, and whether the UK’s exit from the EU might change current procurement rules.
At a policy level, the Public Services (Social Value) Act could provide greater clarity about what is permissible for those who want to be more ambitious with the social value that can be created by spending locally.
The group will reconvene in August to continue their exploration of how procurement and spending can benefit the communities of City and Hackney.