Using procurement to tackle the tax dodgers

The tax dodging activities of companies has come under a lot of scrutiny, but we could do more to tackle this abuse in Scotland with existing powers. Companies who want to bid for taxpayer funded contracts should pay all their taxes.

 

The recent focus has been on Google, following a deal with HMRC to pay £130m in back taxes and bear a greater tax burden in future. This constitutes a 3% tax rate, something small and medium size business across Scotland can only dream of. As Richard Murphy of Tax research put it: “George Osborne is not getting the deal the UK tax payer will be expecting. It is a special rate of tax that would not be available to anyone else.”

 

Even the EU has been shocked over the methods used by multinationals minimise their tax liabilities in Europe. We have had the Luxleaks revelations, media exposure of how hundreds of global companies including Pepsi, Ikea and FedEx had secured secret sweetheart tax deals with Luxembourg, allowing them to save billions of euros in taxes. Before that it was transfer pricing and investment loopholes that allow big companies to pay less tax.

 

This abuse also has an impact on global poverty. Just 62 billionaires own the same wealth as half the world’s population – that's 3.6 billion people. This extreme inequality is being fuelled by a global network of tax dodging. Poor countries are losing at least $170 billion a year to tax havens – money that is desperately needed for vital services like healthcare and education.

 

We don’t tend to think of Scotland when tax havens are discussed. However, as the Sunday Herald recently reported, Scotland is being advertised as a tax haven across Eastern Europe. As one advert proclaims; "Having registered a company in Scotland, by using offshore rules, you do not need to carry out any audits and, furthermore, there is no requirement to provide financial reports."

 

The number of limited partnerships in Scotland has more than doubled from just over 6,000 to nearly 15,000 since 2009. We now have more of these firms than England and Wales put together.

 

Scottish Labour raised questions about this last summer after an international investigation into the alleged fraud of three Moldovan banks uncovered that some of the companies used were in Scotland. Labour's Jackie Baillie said: "It is extraordinary that Scotland is being described as an offshore tax zone. Somebody should be looking long and hard at how to close this loophole."

 

The Scottish Government has urged Westminster to simplify the UK tax system and abandon what it claims is; “the unnecessary complexity which creates opportunities for tax avoidance through countless exemptions, reliefs, deductions and allowances”. The House of Commons Treasury Committee has launched an investigation, with the Chair making similar observations about complexity.

 

Nicola Sturgeon has described tax dodging as “obscene, immoral and downright wrong”. In response to a question on Amazon from Liberal Democrat leader Willie Rennie she said: “All companies should pay the tax that they are due to pay. The Scottish Government, with the limited tax responsibilities that we have, takes tax avoidance very seriously.”

 

The Scottish Government’s tax avoidance measure used by Revenue Scotland is better than the UK approach. However, the same cannot be said of procurement. The public sector spends some £11bn each year in the private sector and this should be used as part of stronger efforts to tackle tax dodging and tax avoidance. It is entirely wrong that companies seeking to avoid paying their fair share of tax should be awarded public contracts.

 

The Public Contracts (Scotland) Regulations 2015 were considered by the Infrastructure and Capital Investment Committee last week. UNISON’s briefing to MSPs questioned why the Scottish Government is not using powers that it has for mandatory, rather than discretionary, exclusion of companies that have not met their tax obligations and /or breached environmental, social and labour laws, and to exclude companies involved in aggressive tax avoidance? If we had these provisions in place, Anglian Water, or almost any of the privatised UK water companies, would be highly unlikely to have even bid for the public sector water contract.

 

Dave Stewart MSP highlighted this to the committee last week, he said: “there is a big gap in that there is no reference to or substantial action on tax dodging. I support the moves by Christian Aid, the Scottish Trades Union Congress, Unison and others to restrict from Government procurement companies that avoid paying tax.”

 

We have demonstrated how this can be done (including a 2014 proposed amendment to the Procurement Bill). It has been argued that it is too complex for procurement managers. The solution is to require companies to sign up to the Fair Tax Mark. A Scottish firm, SSE was the first company to do so.

 

Given the Scottish Government’s rhetoric on tax dodging and the practical steps in the Revenue Scotland and Tax Powers Act, I am at a loss to understand why they are not taking action on procurement. Local and regional authorities across Europe are taking a stronger line than Scotland.

 

The bottom line should be – companies who take the taxpayers pound, should pay their taxes in full.

Extending the Scottish Living Wage through procurement - vital in social care

A new UNISON Scotland Briefing has been published explaining how public bodies can use procurement to extend the Scottish Living Wage to all those working in public services.

Nearly all public sector workers in Scotland are now paid the Living Wage, (uprated this month to £8.25 per hour) but thousands who deliver public services in the community and private sectors don't yet receive it, particularly in social care.

New Statutory Guidance from the Scottish Government sets out how the Procurement Reform (Scotland) Act 2014 enables all public bodies to spread the benefits. Previous legal objections no longer apply.

Infrastructure Secretary Keith Brown said that employers "must now recognise that they cannot adopt exploitative practices in relation to their workers and expect... lucrative public contracts."

The Guidance on Addressing Fair Work Practices sets out how public bodies can legally include payment of the Living Wage in contracts, along with other employment matters, such as trade union recognition and representation and no "inappropriate" use of zero hours contracts.

(The Living Wage is a voluntary level for over 18s, higher than the current statutory National Minimum Wage (NMW) of £6.70 per hour for over 21s. It is an independent calculation of what is required to cover the basic cost of living.

While the increased legal minimum announced by Chancellor George Osborne as a new National Living Wage (NLW) of £7.20 per hour for over 25s in his July 2015 Budget is welcome, it is in effect a higher NMW, not a real living wage. It is nothing like enough to compensate for cuts to tax credits. IPPR Scotland said for low and middle income Scottish families the impact is "vastly outweighed" by the cuts.)

It is vital to progress the Living Wage in social care, which is facing a growing staffing crisis. The Scottish Government, COSLA and care providers are currently involved in discussions about how best to drive up pay in the care at home/housing support sector, recognising the links between pay, quality of care, retention and recruitment etc.

An interim funding deal is likely, with work continuing on a more robust proposal for 2016/17, alongside analysis of the full financial impact of the NLW 2016 to 2020 announcement and the overall cost of residential and non-residential social care.

UNISON wants to see the Living Wage included in all social care contracts and will also press our Ethical Care Charter. However, we accept that this has to be fully funded.  We welcome the Scottish Labour party's proposal to pay the Living Wage to all those working in social care.

UNISON branches should study the guidance in detail and ensure that public bodies: revise their procurement strategy to include the Scottish Living Wage; specify compliance with the S52 guidance in procurement documents and the consequences for the LW; revise their tender evaluation procedures to take account of the LW and other employment and 'fair work' standards. These can include no zero or nominal-hours contracts, trade union recognition and the Ethical Care Charter.

Under the Act, public bodies are required to set out their general policy on the Living Wage in their procurement strategy. Bids can be evaluated against that policy and payment of the Living Wage can become an enforceable performance clause. For contracts with a strong workforce element, such as social care, there can be a significant weighting in the evaluation for workforce matters.

With a civil society coalition behind '10 Asks' on the legislation, we had called for the Living Wage to be mandatory for all those working on public contracts. The guidance does not go that far but is an improvement.

UNISON still believes that EU law would allow it to be set as a contract condition. Advocate General Mengozzi's opinion, given on 9 September 2015 in RegioPost GmbH v Stadt Landau (C-115/14), was that EU law did not prevent contracting authorities setting conditions relating to the payment of minimum wages.

Further Statutory Guidance later in 2015 will cover areas including the Sustainable Procurement Duty, fair trade and tax dodging. There is separate guidance on blacklisting.

Using public procurement for a fairer Scotland

More than £10bn of Scottish taxpayers cash goes on buying goods and services in the private sector. This procurement activity could do much more to deliver the Scottish Government and other public bodies policy aims.

Last year the Scottish Parliament passed the Procurement Reform Act and the EU passed a new Procurement Directive. These provide a framework for a new approach to procurement, but need to be transposed into regulations and guidance to make it work on the ground. Procurement is a devolved matter and it has has to be said that the Scottish Government is making a much better fist of implementation than their UK counterparts. However, progress is slow and the approach is still too cautious and risk adverse.

A key objective for trade unions has been extending the Scottish Living Wage through procurement. The Scottish Government has a good record on supporting the living wage, but procurement has always been the weak point. We had expected the Procurement Reform Act statutory guidance on the living wage to be in place by now. However, this has been delayed. As an interim measure a Scottish Procurement Policy Note, 'Evaluating employment practices and workforce matters, including living wage, in public contracts' has been published. While this is not as good as statutory guidance and has some omissions, it does explain how public bodies can legally ensure the living wage and other employment matters are included in contracts.

In local authorities in particular, legal and procurement advice has persisted with the erroneous position that the living wage and other workforce matters cannot be included in contracts. This policy note is helpful in challenging that advice and includes a practical case study piloted by the Scottish Government and model specifications.

The Local Government in Scotland Act introduced provisions, known as s52 guidance, that is supposed to end the Two Tier workforce, ensuring that council contractors pay the same wages and offer similar terms and conditions to directly employed staff. New evidence that councils are ignoring the requirements of s52 comes in The Third Annual Report Scottish Local Government Benchmarking Framework. They report an 8% increase in privatised social care services and this, "has contributed to reduced costs through lower salary and pension costs". There could not be a clearer admission of unlawful procurement in an official report. On many occasions the STUC and individual unions have raised with ministers the need to promote and enforce these provisions. Sadly, little has happened and again it is not even mentioned in the new advice note.

The Scottish Government has also published a consultation on the transposition of the latest EU Procurement Directive into Scottish procurement regulations. There are a number of options available to ministers and we will be pressing for a much more radical approach in line with the 'Ten Asks' we promoted with a network of civil society partners during the Procurement Reform Act's legislative journey.

A good example is tax dodging. As I explained in the Sunday Herald, the consultation paper is weak on this point and the Scottish Government could do much more. For example, by adopting the Fair Tax Mark. A Scottish company, SSE was the first company to sign up to this. Similar initiatives could make a real difference in promoting stronger environmental action, development goals and fair trade.

It isn't possible to specify everything we would want explicitly in procurement regulations. However, it is possible to change contractor behaviour by spelling out the standards we expect from organisations who take the public pound. That can be a powerful force in promoting the fairer Scotland most of us want to achieve.

 

Same old same old with the shared services

When Labour took control of Hammersmith and Fulham Borough (LBHF) one of their manifesto commitments was a review of shared services arrangements with the Westminster (WCC) and Kingston and Chelsea (RBKC) authorities. This “critical friend” review has now been published. The report makes key recommendations for improvement around: vision, leadership, accountability structures, governance, procurement and technology. What’s interesting from a unison perspective is that it contains a survey of staff across the 3 boroughs.

The survey was sent to all staff in LBHF and all staff working in shared services in the other two boroughs (RBKC and WCC). There was a great deal of agreement among staff the key challenges were solving the different processes technologies and cultures which make shared working difficult and a huge feeling of uncertainty about what the future held.
Uncertainty: most respondents picked “neither agree nor disagree” when asked whether shared services had enabled cost savings and service improvements. It was generally felt that costs savings were the overarching priority for sharing services. LBHF staff felt more strongly than the other boroughs that shared services “does not improve individual borough’s ability to serve own residents”.

Personal development: while staff felt that sharing best practice and working shared teams offered personal development opportunities there were serious levels of concern about job security. This may though be a general, and not unrealistic, concern felt by all workers across local government considering the level of budget cuts they face.
Staff are pretty evenly split between those who would like to see more joint working and those who want to see it end, and 16% who didn’t know. Finance and corporate services were most keen to return to single borough operations.

Another issue is the “enduring variance in terms and conditions between and within teams”. This creates “difficult working environment”. The report states that there is a risk that “the good will of staff is being stretched too far”.

The technological issues are significant, there are three IT systems leaving an admin heavy workload this often leads to the recruitment of temporary staff to process transactional backlogs: Hardly the best way to spend money.

As with other shared services projects there are real issues about individual borough accountability and the ability of boroughs to design and deliver on their individual visions for the future of their areas.
The report is of course full of typical business jargon, but if you go past that it highlights the challenges members face as more of these plans are evolving in Scottish Authorities. It is important that when meeting with mangers and elected members that we can highlight what has happened elsewhere to avoid costly mistakes being repeated.

Council procurement from the third sector

A research report on council procurement with the third sector, highlights some interesting developments in local authority spending in Scotland.

The study was based on a representative sample of five councils in Scotland. This means there should be some caution when extrapolating the data, although there are not dramatic differences between councils.

On average 47% of revenue and capital spending goes externally through procurement, demonstrating that Scottish public spending is not quite the in-house monolith it is often portrayed as. Councils make up half of all public procurement in Scotland.

The research has shown that:

• The purchasing power of local authorities in Scotland is substantial; between £110m and £453m annually in the councils examined.
• The Third Sector is now a key supplier to councils. It was found to account for on average 10% of all suppliers in 2012/13 and almost £1 in every £5 spent externally by councils.
• Third Sector suppliers are more likely than other suppliers to be locally based (and therefore generate local impacts) and more likely to fulfil larger service requirements.

While this is not a longitudinal study, it appears that third sector procurement is increasing. One council had increased the value of purchasing from the sector by 25% over the preceding six years, compared with an overall uplift in its purchasing of 16% over the same period. Interestingly, these third sector suppliers are mostly classified as medium to large organisations, with average payments being just over £100k. Again, not the picture normally portrayed of the sector.

By total value, social care remains the largest category of purchasing from the sector by some margin. For example, the largest of the five councils examined purchased 74% of commissioned social care services from the Third Sector in 2012/13 to a value of £41.2m. Housing management, arts and leisure are also high, but perhaps less obviously so is human resources and clothing.

While this is a limited study, restricted to councils, it does highlight the growing role of the third sector in delivering goods and services to the public sector in Scotland.

 

 

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Making public procurement work for all

If you want to chase the public pound in Scotland, you need to adopt our values. That means paying your taxes, respecting our environment and treating your workforce fairly.

Today, I was speaking at a meeting on procurement at UNISON's annual conference in Brighton. Many outside and even inside Scotland see us as a public service monolith - if only! True, we do have a slightly larger public sector workforce and certainly limited marketisation of public services. However, nearly a third Scottish Budget (£10bn) is spent in the private or voluntary sector. So procurement and how we manage it, is important to UNISON members and the wider community. Ensuring that we don't just buy things, but that we extract maximum community benefit from the public pound.

Procurement law is devolved to Scotland, but we are still in EU (for now!) whose Directives govern much of the process around procurement. The Scottish Government decided to legislate on this issue through the Procurement Reform Bill. This was intended as a largely business friendly technical Bill, reforming the procurement process. In fact, it was largely cosmetic, as many of the reforms could have been implemented through existing secondary legislation powers.

UNISON and others saw an opportunity with this Bill to promote a different agenda. We built a huge civil society coalition (with a combined membership of over three million members) around 10 asks on the Bill. Through our campaigns and lobbying we achieved significant improvements, but not all we would have wanted, to the Bill. These include:

• Blacklisting. Stopping companies involved in the persecution of union activists from getting public contracts unless they make restitution to those affected.
  
• Tax dodging. Introducing an anti-avoidance rule, stronger than in UK legislation.
  
• People centred procurement. Using new EU exemptions and thresholds to exempt health and care and allow evaluation of employment standards. Tackling issues like zero hours contracts.
  
• Scottish Living Wage. This is already applied in the public sector and through procurement we can spread the benefits to our members in the community sector and the wider economy. We would have liked a mandatory requirement, but at least we now have legal procedure to allow public bodies to contract on that basis. No more dodgy legal excuses. Public bodies can now include the living wage in their procurement policy, evaluate bids against that policy and confirm in the contract. This will then become an enforceable performance clause.
  
• Greater emphasis on cutting carbon emissions, environmental standards and promoting fair trade.
  

There is more work to be done on statutory guidance to firm up on the outline in this primary legislation. In addition, we have to implement the new EU directive in Scottish legislation.

EU procurement rules are all too often used as a straightjacket or excuse for inaction. As a lawyer who has worked inside government, I am always telling ministers and councillors that they ask the wrong legal questions. Don't ask what is the legal position, but rather how can I achieve my policy objective with the least risk.

The importance of the new legal framework for procurement in Scotland is the message it sends to bidders. If you want the public pound in Scotland you have to pay your taxes, respect our environment and treat your workers fairly.

Law and frameworks are important, but it only creates an opportunity to do better. We have to organise to make the most of that opportunity. That means developing the procurement expertise of staff and activists, lobby locally, support branches and challenge poor practice at every stage of process.

If we do that, we can use procurement to deliver important benefits for our members and the wider community.

 

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Progress on the Scottish Living Wage and procurement

Progress with spreading the benefits of the Scottish Living Wage depends on a robust approach to public sector procurement.

The Procurement Reform Bill reaches its final stage in the Scottish Parliament next week and one of the most contentious issues has been the exclusion of the Scottish Living Wage. Labour's James Kelly MSP, who also led a separate debate on this issue, makes the case well in his recent Scotland on Sunday article. He is supported by a large civil society coalition who campaigned on this and other procurement issues.

In fairness to the Scottish Government, no one doubts their commitment to the Scottish Living Wage. Scotland leads the way in the UK with the implementation of the living wage across almost all the public sector. They have also funded an accreditation project that aims to encourage more private sector employers to adopt the living wage. The gap is procurement and this is largely due to the muddle and confusion over EU law.

The muddle is largely of their own making because they sent a very unwise letter seeking clarification from the EU Commission in 2012 that formed the basis for the current guidance. Daft letters tend to elicit daft answers and that is what they got. We had a perfectly straightforward statement from the Commission in 2009 setting out the way the living wage could be applied in procurement. That approach is supported by the counsel opinion we provided to the Committee considering the Bill. Only last week the EU Commission repeated their position, when they corrected another unwise speech from the First Minister blaming the EU for the problem.

Despite all this, I am pleased to say that we are now making some very real progress. The Deputy First Minister has tabled amendments to the Bill that does introduce the living wage for the first time. This approach gives public bodies legal clarity and a way of introducing the living wage into procurement. They will now be able to include the living wage in their procurement strategies in a way that will make it clear to contractors that, for relevant procurements, they will evaluate bids taking their employment policies including the living wage into account. That will then be included in the contract and can be enforced through contract performance.

This will be set out in more detail in the statutory guidance that public bodies 'must' take into account in relevant procurements. We have been given a very clear assurance from the DFM that the guidance will be robust, actively enforced and we will be involved in its drafting.

This is important because past experience has not always been positive in this regard. In particular, we already have the Local Government in Scotland Act s52 guidance that was supposed to end the two tier workforce. However, that has been poorly followed by many authorities. The irony is that if authorities properly applied s52 then the living wage would already be mandatory in public procurement. That's because the guidance covers not only new outsourcing, but also to a change of provider. As councils pay the living wage that should be specified in the contract now to avoid a two tier workforce.

Of course we still believe that the Scottish Government could go further and make the Scottish Living Wage mandatory. The legal basis is clear and the grounds for legal challenge minimal, not to mention unlikely for the reasons I set out to the Committee. But governments are cautious beasts when it comes to legislation and the DFM has promised to pursue the issue further with the EU Commission. Verbally this time!

The absence of a mandatory provision means that public bodies might not make the necessary changes to their procurement policies. The main issue here is cost and the key area is social care contracts. This is being addressed in other forums and progress on this issue is the next big step forward. We believe the costs are not massive and in any case the current arrangements are indefensible, as UNISON Scotland's 'Time to Care' report shows.

So not everything we would want, but very real progress and potential light at the end of this very long tunnel. The Scottish Living Wage makes a big contribution towards tackling in-work poverty and promoting sustained economic growth. Using Scotland's substantial public procurement spend will be a big step forward.

 

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Zero-hours contracts - bad for workers, services and the economy

The growing use of zero-hours contracts (ZHC) is primarily a conduit for the exploitation of working people.  The growth in casual employment is contributing to the growth in in-work poverty, damaging public services and the economy.

Today, I was giving evidence at the Westminster Scottish Affairs Committee inquiry into zero-hours contracts. My evidence was largely based on our experience of the growing use of these contracts in the care sector. 

There is no recognised definition of zero-hours contracts and considerable confusion amongst workers and employers as to their legal status, as the recent CIPD survey shows. Equally, the data on how widely they are used is incomplete and the ONS is currently looking at how they can make the data more reliable. Estimates vary, but it likely to apply to at least one million workers in the UK, possibly just under 100,000 in Scotland.

In the social care sector our survey indicated around 10% of our members are on ZHC, but this is likely to be an underestimate as we have more members in council employment where ZHC are less prevalent. The SSSC workforce data says 21% are not on permanent contract, so the figure could be as high as 20,000 care workers in Scotland. Scottish Universities are another big user of ZHC with 18,500 atypical workers, more than the 16,700 permanent teaching staff.

The main issue for workers is the lack of employment rights that give legal force to basic fairness, and grant employees redress where those rights are breached. They also deny stable employment that is vital to day-to-day life such as getting a mortgage, paying the bills, and reducing the reliance on the benefits system. Employers claim the flexibility ZHC bring is good for them and workers. While this may be the case for some workers on ZHC, it is not the norm. For most it is simple exploitation. A particular problem is the requirement, stated or implied, of exclusivity even when the employer is not paying them. Even in feudal times there was a duty of mutual obligation!

But it's not only workers who lose out in the growing use of ZHC. The creation of uncertain employment means that workers are less willing to question dangerous safety practices involving themselves and others. Even more worrying in the care sector, they are less likely to report care abuse. With the growing use of personalisation, care workers tell us that they wouldn't be thanked by their employer for raising these issues. ZHC workers are also likely to be less well trained. The combination of poor employment practice means higher turnover and a loss of continuity of care.

The economy also loses because the lack of stable employment impacts on economic demand. An ILO study shows that economies with high levels of self employment are also low per capita GDP states. The growth of self employment in the UK is a feature of underemployment, not entrepreneurial zeal. 

So what's the solution?  While an outright ban might be appropriate in some areas, in practice employers would just find another way of exploiting staff. Another solution is to tightly regulate the practice to remove abuses and then agree appropriate contract provisions for each sector.

The regulations should start with a legal definition of a ZHC as a contract that fails to specify guaranteed hours; or that specifies guaranteed hours but the worker is expected to be available for work longer, sometimes called short hours or nominal working hours. There should be a right to a written notice of hours upon commencement of work and a right to equal treatment compared to fixed term and regular working hours staff, together with normal remedies for detriment when exercising statutory rights. To address exploitation there should be a right to request fixed and regular hours every six months and a right to be offered a contract after 12 weeks of continuous employment. Exclusivity clauses should be prohibited.

These are all matters that could be regulated by Westminster, although the current UK Government consultation is unlikely to go much further than an employer led code of practice. As much use as a chocolate tea cosy in addressing abuse. The Scottish Government could take action directly as an employer and also through procurement. Public bodies could do the same.

Zero-hours contracts are bad for workers, bad for the services they deliver and bad for the economy. Time for concerted action at all levels of government.

£10bn spent on public procurement could help deliver a fairer Scotland

Using public procurement to help create a fairer Scotland

Nearly £11bn of public money is spent each year in Scotland buying goods and services. That’s a lot of purchasing power. Government and public bodies should be using this power as an opportunity to help create a fairer Scotland.

Today I am at the SNP conference and our fringe meeting is on procurement. As the First Minister put it; “The Procurement Reform Bill has the potential to make a difference to many lives. It will provide new powers to tackle companies that do not comply with their legal obligations, including blacklisting and employment law.”

That’s fine as far as it goes, but procurement can do much more than ensure legal obligations are complied with – that should be taken as read. UNISON has joined a broad coalition of civil society organisations (STUC, SCCS, SCVO and others) who have identified ten priorities for the Bill.

Let’s take the procurement of social care as just one example. Over £400m is spent by councils alone on home care in Scotland, mostly in the private and voluntary sector. Increasing demand for services and declining local authority budgets means these services are being squeezed. The consequences are little short of a national disgrace. Home care workers, often paid little above the National Minimum Wage, employed on zero or nominal hour contracts are literally running around our communities trying to look after some of the most vulnerable members of society.

Much has been written about the 15 minute care visit. However, as one care worker said to me recently, “15minutes - that’s a luxury!” They describe a typical day as constantly trying to catch up from too many visits with inadequate travelling time, that some are not even paid for. The only way to finish the day is to cut corners in what are already inadequate care packages. The days when staff could spend some quality time with clients, looking beyond basic care needs, have long gone. Added to this is the growth of personalisation. While fine in principle, in practice it is leading to the loss of socialisation, with day centre closures leaving people isolated in their own homes.

This is no way to treat elderly people. We should specify, through procurement, decent employment standards, including the Scottish Living Wage, with no zero-hours contracts and proper training programmes. The aim should be to develop a workforce that delivers continuity of care, not workers who are desperate to find another job. Person centered procurement recognises that procuring pens, pencils and paper should be an entirely different process to buying people services such as social care.  The race to the cheapest is rarely the best approach and especially when we are procuring services for the most vulnerable in our communities.

Better employment standards not only drive up the quality of service, but are also good for the economy. Paying the Scottish Living Wage means the taxpayer is not subsidising bad employers through the benefit system. Workers with decent wages and secure contracts will have the confidence to buy goods and services that create sustainable economic growth. Studies show that firms that pay the living wage have lower absenteeism, greater commitment and continuity of the workforce. This is how to really, ‘make work pay’.

Procurement should be used as part of stronger efforts to tackle tax dodging and tax avoidance, both at home and in developing countries.  This could bring in much-needed billions of pounds for the public purse. It is entirely wrong that companies seeking to avoid paying their fair share of tax should be awarded public contracts.

The same applies to fair trade. Ethical and responsible trading policies have the potential to transform lives around the world. The opportunity to sell products for a fair price and to work in safe and decent conditions could help millions work their way out of poverty. The Procurement Bill should help Scotland cement its status as a Fair Trade Nation and to lead the way in ethical procurement.

Scotland has some of the most challenging climate change targets in the world and the legislation includes a duty upon all public bodies to contribute to meeting these emissions targets. Those companies supplying the public sector should be able to show that they are contributing to a more sustainable Scotland. They can do this by publishing an annual assessment of their carbon emissions and providing information on the carbon emissions attributable to the whole life of goods and services supplied.

Public procurement, particularly at a time of financial constraints, has the potential to do much more than just deliver goods and services. If we place sustainable and ethical considerations at the heart of the procurement process, it could promote positive social outcomes for us all.

(Our Bargaining Briefing on the Procurement Reform Bill is here)

Ten civil society priorities for the Procurement Reform Bill

The Scottish Government’s long-awaited Procurement Reform Bill was published last week – to major disappointment on a number of issues, particularly the Living Wage and sustainability.

UNISON, of course welcomes the fact that blacklisting is highlighted, along with the inappropriate use of zero hours contracts, as examples of practices that could see companies excluded from public sector contracts.

We had campaigned along with the STUC and other unions for action against blacklisting to be included in the Bill. We also wanted to see much stronger measures than are proposed for excluding companies involved in tax dodging.

However, there is widespread disappointment that the Scottish Government has made no mention of the Scottish Living Wage in the Bill or its accompanying documents. The Scottish Government is correctly a Living Wage employer itself, but ensuring contractors pay the Living Wage could make a major difference to tackling low pay, as well as helping local economies.

UNISON, as part of a coalition of coalitions involving the STUC, Enough Food for Everyone If, the Scottish Council for Voluntary Organisations, Scottish Fair Trade Forum and Stop Climate Chaos Scotland, has ten key asks for the Bill.