Sustainable Procurement Policy

December 2024

Version 4

IMAGE: The cover displays the Orkney Islands Council crest and the title “Sustainable Procurement Policy”, with “December 2024” and “Version 4”.

Contents

1. Introduction — 4
2. Background — 6
3. What is Sustainable Procurement? — 7
4. Sustainable Procurement Duty / Climate Change Duty — 7
5. Benefits of Sustainable Procurement — 9
6. General approach to Sustainable Procurement — 9
7. Scope and Implementation of the Policy — 10
8. Outcomes from Sustainable Procurement — 10
9. Other relevant policies and procedures — 14
10. Community Wealth Building — 14
11. Monitoring and Reporting — 15
12. Review — 15

Document Control Sheet

Review / approval history

Change Record Table

1. Introduction

This policy sets out the general principles that Orkney Islands Council (the “Council”) will follow across all of its procurement and commissioning activities to ensure that these are undertaken in a sustainable manner.

It sets out how the Council will plan and manage its procurement activities to meet the Council’s corporate aims and objectives and comply with regulatory and legislative requirements.

This policy supports the commitment to sustainable procurement which is set out in the Council’s Procurement Strategy.

It is intended for all of those who are involved in, or affected by, the Council’s procurement activities throughout our community and beyond.

The Council spends tens of millions of pounds each year on a diverse range of goods, services and works from third parties. It is important therefore that this spending power is used to support key Council objectives. This Sustainable Procurement Policy has been developed to help the Council to meet its legal duties and to deliver its key strategic objectives.

Sustainable procurement supports the Council’s values, as outlined in the Council’s Delivery Plan 2023-2028.

Procurement cuts across all Council services and forms an integral part of the Council’s ability to achieve its declared strategic priorities as detailed in the new Council Plan 2023 to 2028 ‘Working together for Orkney’ as below.

IMAGE: A diagram of the Council’s priorities shows “Transforming our council” as the foundation to enable delivery, supporting “Strengthening our communities”, “Developing our infrastructure” and “Growing our economy”, under the heading “Working together for Orkney”.

Procurement is a key enabler across all the above Council priorities.

The aims are what the Council wants to achieve, and the outcomes are the positive changes we are working towards for the benefit of our communities.

• Transforming our council – to provide the foundations for staff to deliver outstanding customer service and performance.
• Growing our economy (includes being on track to become net zero by 2030).
• Strengthening our communities.
• Developing our infrastructure.

The three priority themes are built upon core principles, which will guide future decision-making relating to all our aims.

The core principles are as follows:

• Protecting our environment and combating climate change.
• Equality, fairness and inclusion: in particular for vulnerable and remote communities like the ferry linked isles.
• Sustainable and accessible services for all.
• Community wellbeing and mental health.
• Community wealth building for future generations.

The new Delivery Plan was approved in 2023 to supplement the new Council Plan, and the Council’s Procurement Strategy 2023 to 2028, (Procurement Strategy) continues to reflect the strategic priorities and values in line with this and has been updated to reflect recent procurement developments.

Orkney Integration Joint Board (IJB) was formed in 2016. This is a legal body, separate from both NHS Orkney and Orkney Islands Council, responsible for planning, resourcing, and overseeing integrated health and social care services. The IJB has published its Strategic Plan as well as a Strategic Commissioning implementation Plan. Included in this Plan there is a commitment to review third sector commissioned services and an overall commissioning intention to shift the balance of care to enhanced, community based models.

This Sustainable Procurement Policy outlines how sustainable procurement supports and contributes to the implementation of the Council’s Delivery Plan 2023 to 2028.

2. Background

The Council requires an up-to-date Sustainable Procurement Policy to reflect recent significant changes in public procurement legislation.

The Policy reflects the requirements of the following legislation, all of which have informed the Council’s Contract Standing Orders, details of which are contained in the Procurement Strategy 2023 to 2028:

• Public Contracts (Scotland) Regulations 2015.
• Procurement Reform (Scotland) Act 2014.
• Procurement (Scotland) Regulations 2016.
• Concession Contracts (Scotland) Regulations 2016.
• Utilities Contracts (Scotland) Regulations 2016.
• Public Contracts (Scotland) Amendment Regulations 2016.
• Equality Act 2010, as amended.
• Equality Act 2010 (Specific Duties) (Scotland) Regulations 2012.
• Climate Change (Scotland) Act 2009, as amended.

This policy should be read in conjunction with the Council’s Procurement Strategy and the Council’s Contract Standing Orders. It applies to the procurement of all goods, services and works. It aims to ensure that Council procurement activities contribute to the social, economic and environmental well-being of our remote and fragile island communities, both now and in the future.

The Sustainable Procurement Policy also reflects changes brought about by the requirements of the Community Empowerment (Scotland) Act 2015, a fundamental review of Community Planning Partnerships, and the development of a new Local Outcomes Improvement Plan (LOIP), which has replaced the Single Outcome Agreement, and the integration of Health and Social Care. The Children and Young People (Scotland) Act 2014 is also a diverse piece of legislation affecting many services.

The Climate Change (Emissions Reduction Targets) (Scotland) Order 2015, Climate Change (Emissions Reduction Targets) (Scotland) Act 2019 and the Climate Change (Duties of Public Bodies: Reporting Requirements) (Scotland) Amendment Order 2020 will increasingly be reflected in the Council’s sustainable procurement considerations.

The Climate Change Working Group, comprising membership across Council Services, including Procurement, will work together to develop, support and embed action on Climate Change. Clear indicators will be important, helping a ‘measure to manage’ approach and impactful actions. The reduction in the carbon footprint of the Council will be captured in the annual Climate Change Duties report.

This Policy outlines how the Council takes a responsible and sustainable approach to procurement. The Policy will be reviewed as appropriate to ensure it is in line with any emerging Council commitments on Climate Change and remains in accordance with emerging Government Policy, reflecting the Paris Agreement on Climate Change, and the annual Conference of the Parties to the Paris Agreement (COPs).

3. What is Sustainable Procurement?

Definition

‘Sustainable procurement can be defined as - procurement which supports the sustainability goals of the organisation and optimises the environmental, social and economic impacts over the life cycle of the product or service’. (Chartered Institute of Procurement and Supply, 2021).

Sustainable procurement considers the social, economic and environmental consequences of what is procured through all stages of its life-cycle. This includes considering design, resource extraction and sourcing, manufacturing and production, transportation, service delivery, operation and maintenance, reuse, recycling and disposal. It is also about questioning whether the purchase requires to be made at all.

Sustainable procurement also considers the capacity of suppliers to address these consequences throughout the entire supply chain.

4. Sustainable Procurement Duty / Climate Change Duty

The Council is required to comply with the requirements of the Sustainable Procurement Duty under section 9 of Procurement Reform (Scotland) Act 2014, as follows:

The Sustainable procurement duty is the duty of a contracting authority:

A. Before carrying out procurement, to consider how in conducting the procurement process it can:

1. Improve the economic, social, and environmental wellbeing of the authority's area.
2. Facilitate the involvement of small and medium enterprises, third sector bodies and supported businesses in the process.
3. Promote innovation.

B. In carrying out the procurement, to act with a view to securing such improvements identified as a result of paragraph A1.

The Council is also obliged to have regard to the Procurement Reform (Scotland) Act 2014 statutory guidance as detailed below:

• The Sustainable Procurement Duty; and Community Benefit Requirements in Procurement.
• Selection of Tenderers and Award of Contracts: Addressing Fair Work Practices, including the Living Wage, in Procurement.
• Procurement of Health and Social Care Services.
• Scottish Procurement Policy Note (SPPN) 07/2016 - Update to Guidance on the Procurement of Care and Support Services (Best Practice).
• Fair Work First implementation - Scottish public procurement update: SPPN 6/2021 - gov.scot.
• Procurement thresholds and VAT inclusion in estimated contract value: SPPN 8/2021 - gov.scot.
• Public procurement - taking account of climate and circular economy considerations: SPPN 3/2022 - gov.scot.

All Contracts that are awarded by the Council, regardless of value, are subject to an obligation to seek best value and to demonstrate transparency, equal treatment, non-discrimination and proportionality.

The Scottish Government has designed a suite of Sustainable Procurement Tools to help public sector organisations identify and address how they can optimise the economic, social and environmental outcomes of their procurement activity. These tools will be used where appropriate and where they add value to the procurement exercises being undertaken.

The detailed risks and opportunities in the sustainable procurement tools align with Scotland’s National Performance Framework (NPF) and Scotland’s National Outcomes and Indicators achieving a line of sight between procurement activity and local and national strategic priorities. Guidance for each heading is available on the Scottish Government Sustainable Procurement portal Sustainable Procurement.

• Climate Change.
• Materials.
• Waste and Efficient Resource Consumption.
• Hazardous materials and emissions.
• Biosecurity.
• Biodiversity.
• Heritage.
• Water – Efficient Consumption and Production.
• Employment, skills and training.
• Communities.
• Equality.
• Fair Work.
• Fairly and Ethically Traded.
• Health and Wellbeing.
• Security and Crime.

5. Benefits of Sustainable Procurement

The Council recognises and wishes to maximise the benefits achievable through sustainable procurement. Sustainable procurement can deliver additional benefits for the Council while contributing to the social, economic and environmental well-being of people and places. For example sustainable procurement will enable the Council to:

• Achieve value for money by avoiding unnecessary purchasing, by considering and then lowering the whole life costs of goods, services and works and through improved resource efficiency.
• Minimise net carbon emissions within contracts for works, services and supply, especially with consideration to the lifetime of the contract or product cumulative emissions (where timescales might either lock in ongoing emissions or alternatively might help to store embodied sequestrated carbon).
• Report on progress towards meeting its legal duties and other obligations in relation to climate change and sustainable development including progress on Net Zero.
• Stimulate the market and encourage innovation for sustainable products and services.
• Support the local supply community by engaging with Small and Medium Enterprises and Third Sector organisations so they can compete for Council contracts.
• Help build a sustainable supply chain for the future and improve supplier relationships.

6. General approach to Sustainable Procurement

The Council’s approach to sustainable procurement is as follows:

• We will ensure that our procurement of goods, services and works contributes to achieving our vision of a truly sustainable supply chain.
• We will ensure that our procurement minimises its contribution to climate change and supports goods, services and works that are well-adapted to the consequences of a changing climate.
• We will deliver value for money by realistically assessing, where appropriate, the whole life-cycle costs of our procurement and not simply considering the initial purchase price.
• We will ensure that what we intend to purchase is necessary and that, where appropriate, there is a business case for doing so. We will specify our requirements so as to meet the needs of users and to avoid purchasing more than is needed.
• We will carry out sustainable procurement activities whilst complying within the public procurement legal framework which is intended to promote fair and open competition.
• We will ensure that when developing our requirements for goods, services and works we assess the possible social, economic and environmental impacts of our procurement and actively seek to contribute to the social, economic and environmental well-being of our remote and fragile island communities. Where appropriate to the subject matter of the contract, this to be undertaken as part of pre-market engagement and consultation.
• We will not knowingly procure goods, services and works that impact negatively on places, people and other species both locally and elsewhere.
• Where appropriate, we will consult with the people whose needs we aim to meet through our procurement to ensure that we procure goods, services and works that meet their needs.
• We will not intentionally discriminate against specific groups of people when undertaking our procurement activities and will promote equality in line with legislative requirements.
• We will support the aims of the Modern Slavery Act 2015 and ensure that our suppliers provide us with confirmation of their compliance with the Act.
• Where it is appropriate and proportionate to do so we will procure goods and services in line with the best practice guidance set out in the Scottish Government Procurement Journey and any other relevant best practice guidance.
• We will consider the effects of island proofing where appropriate and in light of anticipated guidance issued by the Scottish Government.
• We will consider every procurement exercise to determine any impact on Climate Change in accordance with Scottish Government, Sustainable Procurement Tools guidance.

7. Scope and Implementation of the Policy

Practical guidance on how sustainable procurement can be embedded into the Council’s procurement processes is available on the Scottish Government’s website. This is contained within the Scottish Government’s ‘Procurement Journey’ best practice procurement toolkit. Home | Procurement Journey.

In line with the Council’s Contract Standing Orders we will use the Sustainable Procurement suite of tools contained in the Procurement Journey to support implementation and to ensure that our procurement approach and processes are relevant and proportionate to the Orkney Islands Council context.

The initial focus will be on priority commodities, services and suppliers i.e. those which are identified by the Council as being associated with the highest social, economic and environmental risks and opportunities.

Delivery of the commitments made in this Policy will be supported through the implementation of the Council’s Procurement Strategy 2023 to 2028 and the Council’s Procurement Annual Report. Progress against the stated objectives will be monitored and reported on an annual basis as part of the Procurement Service Improvement Action Plan 2023 to 2028 via the Council’s Performance Management System.

8. Outcomes from Sustainable Procurement

Outcome 1: the social and economic benefits from our sustainable procurement are maximised

8.1. We will, where appropriate, build into the procurement process options for suppliers to offer training, employment, work experience placements, apprenticeships and volunteering opportunities for members of our local communities including people experiencing long-term unemployment including adults with learning disabilities registered on employment support schemes, and young people not in employment, education or training.

8.2. We will require suppliers to communicate to our local communities, employment opportunities arising from our procurement activities.

8.3. In accordance with the requirements of the Sustainable Procurement Duty of the Procurement Reform (Scotland) Act 2014, we will consider how, in conducting the procurement process, we can facilitate the involvement of small and medium enterprises and third sector bodies. We will, wherever possible, ensure that our procurement processes are, as far as possible, proportionate and relevant to the economic benefits and scale of the contract.

8.4. We will, where possible, reserve contracts for Supported Businesses under Regulation 21 of the Public Contracts (Scotland) Regulations 2015 where their prices and capacity to deliver the contract is comparable to the rest of the market.

8.5. We will not knowingly purchase goods and services from suppliers that trade in slavery, child labour, prostitution, and illegal drugs. We will not knowingly work with suppliers who breach International Labour Organisation conventions in accordance with the Modern Slavery Act 2015. We will ensure our suppliers, where relevant to the subject matter of the contract, complete a compliance statement and provide evidence of compliance with their obligations under relevant international legislation where requested to do so.

8.6. We will, where practicable and where it is sustainable, purchase fair trade options certified by appropriate independently verified accreditation schemes as a means of helping excluded and disadvantaged producers, including independent small farmers, to access international markets and receive a fair price for their products. Where certification by accreditation schemes is an optional requirement, we will make clear in the tender documentation how this will be evaluated. We recognise that Fairtrade and other accreditation schemes also secure safeguards in relation to ethical working practices and will encourage suppliers to indicate what safeguards they have in place to secure these where appropriate to the subject matter of the contract.

8.7. In accordance with the requirements of the Procurement Reform (Scotland) Act 2014 in relation to the provision of food, we will take measures to improve the health, wellbeing and education of the local community. We will, where practicable and where it is sustainable, specify fresh, seasonal and nutritious food.

8.8. We will not knowingly purchase genetically modified food or food with genetically modified ingredients.

8.9. We will specify Protected Geographical Indication and Protected Designation of Origin standards where they are justified by menu requirements.

8.10. In line with the requirements of the Procurement Reform (Scotland) Act 2014 in relation to the provision of food, we will promote the highest standards of animal welfare through our procurement. We will consider animal welfare throughout the supply chain and appropriate independently verifiable accreditation schemes, when making procurement decisions, and wherever possible, will not purchase goods which have been developed using animal testing.

8.11. In accordance with Regulation 47 of the Public Contract (Scotland) Regulations 2015, we will consider dividing contracts into small lots to encourage the active participation of our local businesses in the procurement process.

8.12. We will build into our procurement processes opportunities as appropriate for suppliers to propose provision of goods, services or works guaranteed by independent accreditation schemes. We recognise that there are a range of independently accredited quality schemes where the additional costs deliver significant environmental, social, quality or animal welfare benefits.

Outcome 2: the negative environmental impacts are minimised and the environmental benefits maximised from our procurement

8.13. Where possible we will procure goods, services and works that minimise release of greenhouse gas and particulate emissions associated with use of fossil fuel energy sources, use of non-renewable materials, waste creation and pollution to air, water and land. In doing so, we will analyse all stages of the life-cycle including design, resource extraction and sourcing, manufacturing and production, transportation, service delivery, operation and maintenance, reuse, recycling and disposal.

8.14. We will, where appropriate and where it is sustainable, purchase fewer new goods by re-using, repairing, refurbishing or remanufacturing existing goods, in line with Scotland’s 2016 Circular Economy Strategy ‘Making Things Last’ and where this is relevant to our Island context.

8.15. We will, where appropriate and where it is sustainable, specify goods and materials made with recycled material.

8.16. We will not purchase goods and materials that are made of plastic which cannot be recycled where alternative options are available, and we will seek to minimise the purchase of recyclable plastics where alternative goods and materials can be used.

8.17. We will specify minimum packaging, reusable packaging and packaging take-back.

8.18. We will specify energy efficient goods, services and works in line with current best practice standards and specifications.

8.19. We will ensure that the vehicles we purchase, lease or hire have low emissions of greenhouse gases and air pollutants.

8.20. We will procure timber and timber-based goods from verifiable sustainable sources that evidence clear chains of custody. We will encourage suppliers to make use of independently verified accreditation schemes that address negative environmental impacts.

8.21. We will, in exercising our procurement function, meet the duty to further the conservation of biodiversity arising from the Nature Conservation (Scotland) Act 2004. We will, where appropriate, specify through our procurement processes requirements which protect and enhance green spaces, habitats, species, sustainable farming practices and biodiversity both locally and globally. In particular, we will protect and enhance priority habitats and species in Orkney.

8.22. We will ensure that any emerging Council commitments on Climate Change are incorporated into the Sustainable Procurement Policy by reviewing the policy on an annual basis to reflect the potential for rapid change in this fast moving policy area.

Outcome 3: Orkney Islands Council has a more sustainable supply chain

8.23. Strengthening local supply chains and promoting the use of local goods and services within the parameters of procurement legislation, we will work with suppliers and encourage them, whenever possible, to use more sustainable goods, processes and working practices in their own business operations and encourage them to engage in sustainable procurement activities within their own supply chains.

8.24. We will encourage suppliers, through the inclusion of sustainability criteria in our tendering process, to develop innovative and competitively priced sustainable goods, services and works.

8.25. We will ensure that suppliers comply with their commitments to the sustainability criteria within our specifications and their tender submissions by building in proportionate, effective monitoring and management into contract arrangements.

8.26. Outcomes to define success will be developed in liaison with suppliers as part of the contract management process.

8.27. We will consider methods of incentivising investment and promoting a culture of improvement by suppliers in sustainable development on a contract by contract basis where this is practicable and appropriate.

8.28. We will not knowingly purchase goods and services from suppliers that trade in slavery, prostitution, use of child labour and illegal drugs. We will not knowingly work with suppliers who breach International Labour Organisation conventions. In accordance with the Modern Slavery Act 2015, we will ensure that our suppliers, where relevant to the subject matter of the contract, complete a compliance statement and provide evidence of compliance with their obligations under relevant international legislation, where requested to do so.

Outcome 4: sustainable procurement is embedded within the Council

8.29. We will establish clear leadership to drive the embedding and continuous improvement of sustainable procurement within the Council.

8.30. We will communicate this policy and accompanying guidance to all Council staff.

8.31. We will undertake an assessment of third-party expenditure with a value of over £10,000, to identify those contracts associated with the highest risk and greatest opportunity for improvement. This will be based on an analysis of spend, risk, scope for improvement and our influence of the market.

8.32. We will develop and continuously improve the sustainable procurement skills and knowledge of Council staff involved in procurement activities. This will include those responsible for identifying a need to procure goods, services and works, those involved in evaluating tenders and those responsible for contract and supplier management.

8.33. We will subject all requirements for goods, services and works to a sustainability test during the development of procurement plans as part of the early project planning process. This will question whether requirements can be reduced or avoided altogether by delivering outcomes in other ways; that social, economic and environmental impacts and benefits have been identified and that whole life-cycle costs have been considered.

8.34. Where relevant, we will include sustainability criteria in tender documentation and our tender evaluation process.

8.35. We will measure and report on our progress in embedding and continuously improving sustainable procurement and its contribution to delivering sustainable outcomes annually.

8.36. We will undertake a Sustainable Procurement Impact Assessment (SPiA) for all relevant goods, services and works contracts where there is potential to minimise the use of carbon-based energy and its associated emissions. See Annex 1 to this Policy.

8.37. The SPiA implementation and usage will be reported on an annual basis in the Council’s Procurement Annual Report.

8.38. We will consider, where appropriate, the use of lotting strategies to maximise access to contract opportunities by smaller contractors and to optimize the contribution to a circular economy in Orkney.

8.39. For any procurement equal to or greater than £4,000,000 in value, we will consider whether to impose community benefit requirements as part of the procurement.

8.40. We will determine, as appropriate, contract opportunity as either a ‘relevant’ or ’priority’ contract in terms of impact on Climate Change in accordance with Scottish Government, Sustainable Procurement Tools guidance. Where appropriate, bidders will be required to produce an appropriate Climate Change Action Plan.

9. Other relevant policies and procedures

Sustainable procurement also contributes to delivery of a range of Council policies and strategies, some of which have reporting requirements relating to procurement activities. These include:

• The Equality Act 2010 and The Equality Act 2010 (Specific Duties) (Scotland) Regulations 2012.
• The Council’s climate change targets and carbon management plan (including the annual Climate Change Reporting requirements).
• The Council’s environmental management and waste management procedures.

Sustainable procurement can also make a significant contribution to the development of the ‘Circular Economy’ by adopting the principles of ‘Making Things Last – A Circular Economy Strategy for Scotland’. In a circular economy, systems are designed to make better use of valuable products and materials – changing the way they are produced and managed to have less impact on finite natural resources and create greater economic benefit.

10. Community Wealth Building

The Council and The Orkney Partnership (Orkney’s community planning partnership) have decided to adopt Community Wealth Building (CWB) and it is a key element of the Council Plan 2023-2028 and the Orkney Local Outcomes Improvement Plan 2023-2030.

CWB involves:

• Building on the work already done to support local, small and medium sized businesses (including Third Sector organisations) to be able to do more.
• Supporting the creation of new business, including those with different forms of ownership such as co-operatives.
• Promoting fairer employment practices, including the payment of the Scottish Real Living Wage which benefits the whole of Orkney through increased spend and less poverty.
• Skilling up local people to be able to benefit from the opportunities that arise.
• Lower carbon emissions because of shorter supply chains.

There are five core pillars to CWB:

1. Fair employment and just labour markets.
2. Spending.
3. Making financial power work for local places.
4. Socially just use of land and property.
5. Inclusive ownership.

These include developing the local supply chains of businesses likely to support local employment, keeping wealth within communities, promoting fairer employment practices, and reducing carbon emissions because of shorter supply chains. CWB is not delivered by public authorities in silo. The Council will work with its community planning partners to develop a common plan to deliver CWB.

11. Monitoring and Reporting

The Council’s progress in sustainable procurement will be reported as part of our annual procurement report. The annual procurement report is a requirement of the Procurement Reform (Scotland) Act 2014. We will use this report to demonstrate compliance with other legislation that places specific requirements on the Council with respect to our procurement activities, for example, the Equality Act 2010 and The Equality Act 2010 (Specific Duties) (Scotland) Regulations 2012.

12. Review

We will review this Policy as appropriate to ensure that it remains in line with the latest iterations of the Council’s Procurement Strategy and the Council’s Delivery Plan.

Annex 1

Sustainable Procurement Impact Assessment

The purpose of a Sustainable Procurement Impact Assessment (SPiA) is to improve the work of Orkney Islands Council by ensuring that its procurement activities contribute to the social, economic and environmental well-being of our remote and fragile islands communities, both now and in the future.

This assessment records the likely impact of any procurement exercise, by anticipating the consequences, and making sure that any negative impacts are eliminated or minimised and positive impacts are maximised.

IMAGE: The annex heading displays the Orkney Islands Council crest and the title “Sustainable Procurement Impact Assessment”.

1. Intended Procurement exercise

2. Initial Screening

3. Impact Assessment

4. Conclusions and Planned Action

Signature:

Name: (BLOCK CAPITALS).

Please sign and date this form, keep one copy and send a copy to the Procurement Manager. A Word version should also be emailed to procurement@orkney.gov.uk.

A copy of the completed Sustainable Procurement Impact Assessment is to accompany the Commodity Strategy completed for individual Regulated Procurements and over Threshold Regulated Procurements as part of the internal sign off process and where this is appropriate to the subject matter of the procurement exercise. Where an SPiA has been completed this is recorded on the Council’s central contracts register.