Targeted Recruitment and Training Clauses in Procurement

Transcription

1 Targeted Recruitment and Training Clauses in Procurement A research project undertaken by Kirsty Markie for the Improvement Service on behalf of SLAED Employability Theme Group December 2012

2 TABLE OF CONTENTS Executive Summary 1 1. Youth Unemployment 2 2. TRT Clauses and Best Value 5 Annex: Case Studies 10 References 34

3 EXECUTIVE SUMMARY This report presents the findings of the Targeted Recruitment and Training in Procurement project undertaken by the Improvement Service in partnership with the Scottish Government, Scottish Local Authorities Economic Development (SLAED) Employability Theme Group, and COSLA during the Summer of The context for this report is the scale and nature of youth unemployment in Scotland. Since 2008, unemployment has risen steadily across all age groups but has grown much more substantially amongst those aged Young people are also disproportionately overrepresented amongst the unemployed; year olds comprise 17% of the population but account for more than 30% of the unemployed. It was from these premises that the idea for the Targeted Recruitment and Training in Procurement project developed. The aim was to undertake a piece of research that would help to increase employment opportunities for young people by supporting local authorities to make greater use of Community Benefits in Procurement (CBiP) and more specifically Targeted Recruitment and Training (TRT) clauses. The project was able to build on strong foundations laid by the Scottish Government, in particular through the Community Benefits in Public Procurement (2008) report and the associated guidance note, as well as the Developing Markets contract 1. This body of work has clarified the legal problem in relation to TRT clauses and how they can be implemented in practice. It is anticipated that the forthcoming Procurement Reform Bill will make use of these clauses mandatory in all major public contracts. TRT clauses are a particular form of CBiP which allow organisations procuring works or services to specify in the contract that labour used must be sourced from particular groups. TRT clauses are most commonly used to target the long term unemployed and young people but can also be used to target employment opportunities at other vulnerable groups. Presently, TRT clauses are used by a range of public bodies and the use of TRT clauses and CBiP in general have increased substantially over the last 10 years. There is a distinction between contracts that have included TRT clauses as a voluntary agreement versus situations and where social benefits have been included as a legal requirement and achievement of the social benefit is a material element of the contract. There is a wealth of evidence which shows that the latter approach is more likely to succeed. The report brings together a collection of case studies showing practical applications of TRT clauses. It is hoped that these case studies will encourage councils where there is no existing precedent for TRT clauses to introduce them, as well as encouraging increased use by councils where there is currently a limited deployment of TRT clauses. The combined effect would be to obtain the maximum social value from local authority expenditure. 1 http: //readyforbusiness.org/ 1

4 1. YOUTH UNEMPLOYMENT A Growing Problem In Scotland, over the last five years unemployment has risen sharply. However, it is unemployment amongst those aged which has grown most significantly. Since 2008 unemployment for young people aged has increased by 83% from 55,000 in 2008 to 100,000 in Not only is youth unemployment rising rapidly but young people are already disproportionately over-represented amongst the unemployed. Despite comprising only 17% of the total population, young people age represent over 30% of those who are unemployed. Typically, the young unemployed are divided into three groups. Compared to previous spikes in youth unemployment, the rates within all three groups have increased steadily over the last five years. The first group of young unemployed are those who are in full-time education but seeking work; they make up 35% of all young unemployed people. Among the remaining 65,000, around 20% fall into the second group of young people with low levels of or no educational qualifications, making it more difficult for them to gain sustainable employment. Care leavers, carers and young people from the criminal justice system are especially over-represented in this group (Scottish Government, 2012). The third group contains around 44,000 young people who have some educational qualifications and who in normal economic circumstances would have much better employment prospects. The effect of the growth in numbers in this group is that many existing employment strategies and schemes aimed at getting young people into work and training are now picking up these young people who would usually find work themselves, at the expense of the young people further away from the job market. It is evident that the recession and the global economic crisis have impacted on employment opportunities for young people. This reflects the fact that, in recessionary periods, the level of recruitment falls significantly as employers contract their workforces and those in employment are less likely to voluntarily leave their jobs. The impact of much lower levels of recruitment falls most heavily on those members of the population not already in a job, and young people leaving school, college and university make up a significant proportion of this group. However, it is important to acknowledge that rising rates of youth unemployment is a trend that precedes the economic down-turn in Statistics from the Scottish Government show that in 29 of the last 32 quarters there has been an increase in youth unemployment (Scottish Government, 2012). This suggests that as well as short and medium term solutions which will ameliorate the particular difficulties arising as a result of the recession, longer term changes including looking at labour market policies as well as employer attitudes towards recruiting young people will have a role to play in altering the longer term trend. Cost of Youth Unemployment Youth unemployment imposes direct costs through increased benefit payments and lost income tax revenues. The London School of Economics, the Royal Bank of Scotland and the Prince s Trust undertook research into the economic impact and put the weekly cost of UK youth unemployment at 155m (Prince s Trust, 2007). Scotland s Youth Employment Strategy also contained approximate figures for the economic cost of youth unemployment. The lifetime cost of a single cohort of young people failing to make the transition into regular employment [is] in the region of 2 billion (Scottish Government, 2012). Both studies illustrate the fiscal challenge that youth unemployment creates. 2

5 However beyond the financial costs, the human and societal costs of youth unemployment developing into long term unemployment are considerable. It is well documented that young people who have an early experience of unemployment are significantly more likely to go on to experience further and prolonged periods of unemployment in later life (Bell et al. 2011; Dieckhoff, 2011; Burgess et al. 1999; Gregg et al. 2004). It has also been proven that unemployment during youth leaves a wage scar which increases the longer the period of unemployment and persists throughout working-age life. Consider two males with the same social background education and place of residence. If one of these men were to experience a year unemployed before the age of 23 then 10 years later he could expect to earn around 23% less than the other man. (Gregg, 2005; Mroz et al. 2006; Raeside, 2006). Additionally youth unemployment is also associated with a whole range of negative life outcomes including economic and social deprivation, poor mental and physical health, and a higher probability of being both a victim and/or a perpetrator of crime (Bartley, 2011; Quintini, et al. 2006). As would be expected, reducing youth unemployment creates significant benefits for society and to the individuals concerned. Research shows that reducing unemployment can result in a reduction in local authority payments of housing and council tax benefits, decreased demand on services required to help homeless people, reduced pressure on welfare rights and debt advice services, fewer demands on mental health support services, decreased demand on primary and emergency medical care and increased spend by those in sustainable jobs to support the local community. Sustained employment also has notable positive effects for the individual s mental and physical health (Prince s Trust, 2007). Business Benefits of Employing Young People A more positive message is that employers appear to be recognising increasingly the business benefits of employing young people. This growing awareness of the value of young people in the workforce should help underpin a longer term and more sustained reduction in youth unemployment once the economy recovers more strongly from recession. Evaluations of programmes to tackle youth unemployment such as the Future Jobs Fund of the previous UK administration provide evidence of positive impacts on employer attitudes and behaviours. For example, an evaluation of Greater Manchester s 8,000 place Future Jobs Fund (McGregor and McTier, 2011) found: High levels of satisfaction among employers with young people recruited. A greater appreciation of the effectiveness and productivity of young people as employees. As a result, many employers were reviewing their recruitment and selection processes to make it more likely they would hire more young people going forward. A review of the issues and literature around youth employment carried out for the UK Commission for Employment and Skills (Hasluck, 2012) isolated a number of benefits flowing to employers from the recruitment and development of young people. These included: A more loyal workforce with lower turnover. A workforce with greater flexibility, energy and willingness to learn. Insights into and connections with young people more generally as a key customer base. More recently, the CIPD (2012) has produced a positive perspective based on both qualitative and quantitative research with employers. Among key findings are the following: Three quarters of employers surveyed accept that there is a business case for employing young people businesses need young people just as much as young people need jobs. 3

6 More than half of the employers believe that they needed to improve access routes into their jobs for young people. Scottish Government Policy Responses The Scottish Government recognises fully the importance of increasing work opportunities for young people and has set reducing youth unemployment as a key policy priority. To pursue this agenda the Government appointed the first Minister for Youth Employment and published Scotland s Youth Employment Strategy (Scottish Government, 2012). This strategy sets out how the Government will increase the number of young people gaining sustainable employment, and it sees a key role for Community Benefit in Procurement (CBiP) and within this Targeted Recruitment and Training (TRT) clauses. The Government will use our 9 billion public procurement spending to maximum effect to promote economic growth and jobs, including continuing to use community benefit clauses to support employability and targeted recruitment and training through public sector contracts. Moving forward we will increasingly focus this on supporting young people The Government intend to use the Procurement Reform Bill to stimulate the economy by helping people into employment and creating training opportunities. The proposal is to include a statutory requirement that public bodies include Community Benefit clauses in all new major public contracts and that those in receipt of major public contracts publish their commitments on training and apprenticeships, as well as their performance against these commitments. As a result of Scotland s Youth Employment Strategy there may be increased expectations that local authorities will make more use of TRT clauses in their procurement activities. The next section of this report summarises the key findings based on research into the current use of TRT clauses within Scottish local government. 4

7 2. TRT CLAUSES AND BEST VALUE Rationale for TRT Clauses The CBiP approach has developed over a period of around 20 years with a particular focus on generating training and employment opportunities for the most disadvantaged groups in the labour market, initially focussing on long term unemployed residents of regeneration areas where physical investment in homes and other local assets created the potential. Over time the focus has moved strongly towards supporting the young unemployed as the recession has intensified pressure on this specific group of the population. However, addressing youth unemployment is not the only reason for using TRT clauses within a CBiP approach. The current financial challenges which councils face are another persuasive reason. The economic situation has altered considerably since the Scottish Government s Community Benefits pilots and their subsequent report Community Benefits in Public Procurement (Scottish Government, 2008). Local government is faced with increasing demand for services - but decreasing budgets. Local government is being asked to deliver more with less whilst at the same time reduce inequality and improve outcomes. This means that councils have to make increasingly difficult decisions about how to spend their budgets. Efficiency savings have to be found and in some cases difficult choices need to be taken around service prioritisation. However, far from this being a reason not to deploy TRT clauses, the serous financial challenge is in fact a rationale for councils to consider doing more of this. TRT clauses are a proven way for organisations (both public and private) to obtain maximum value from their spend. TRT clauses can be used in nearly all procurement contracts. When used effectively TRT clauses can help councils to tackle long-standing social issues, contribute to the achievement of a whole range of local outcomes and national priorities and bring down long term costs. Evidence from the Scottish Government s pilots demonstrated that TRT clauses did not increase the cost of procurement to the procurer and that the incorporation of TRT clauses ensured that the local authority gained social benefits which they would not otherwise have obtained (Scottish Government, 2008). Study Methods The data collected for this project were obtained during the summer of Representatives from the Scottish Local Authorities Economic Development (SLAED) Employability Theme Group were contacted and invited to a focus group to discuss their experiences of TRT clauses. Additionally, they were asked to suggest what could be done to increase the use of TRT clauses within their local authority. There were 18 attendees at the focus group and these included representatives from 17 of the 32 Scottish councils. Following the initial focus group, an online survey was distributed to Employability Managers and Community Benefits Leads within each council. The aim of the survey was to establish current TRT policies and practices, and 65% of councils responded to this. The results were then used to identify examples of council contracts which had included TRT clauses and which could be followed up in more detail and developed into case study evidence. Key Findings The research from the survey and subsequent interviews with Employability and Community Benefit Lead Officers identified that significant progress has been made since the Scottish Government conducted its Community Benefits pilots in There is now much greater awareness within councils about CBiP, a better understanding of how the process works, including the legal implications, and of the benefits that CBiP can bring. As a result, far more 5

8 councils are now using TRT clauses than was the case in The section below summarises these key developments. 2 80% of councils have included TRT clauses within a procurement contract. Of the remaining councils, all were making plans to include TRT clauses in a contract in the near future. 67% of councils have a written policy on CBiP that links into key strategies endorsed by the council. The majority of councils have now overcome fears about TRT clauses breaching UK and/or EU procurement law A number of councils now have a presumption in favour of including TRT clauses within council procurement contracts. All councils stated that there was growing awareness within their organisation as to the benefits of TRT clauses and how they can contribute to local outcomes and national priorities. Some councils have included TRT clauses within a contact for goods or services, and half a dozen more stated that they had plans to include TRT clauses into a nonconstruction contract in the future. Essential Features As part of the research process, local authority leads were asked to identify what they regarded as the essential features of an effective CBiP approach incorporating TRT clauses, and their feedback is captured below. A Council-Wide Policy: There was a consensus that to do CBiP effectively and to ensure a consistent approach the council must have a clear CBiP policy. This policy should link to other strategic documents to evidence how CBiP has legitimacy in terms of supporting other local authority goals and objectives. Seek Legal Advice: The research showed that uncertainty and fear as to whether TRT clauses were against EU and UK procurement law was much less prevalent than it had been at the time of the Scottish Government pilots. This is primarily attributed to the wealth of information and advice now available, but also to the fact that many more councils and other public bodies have now deployed TRT clauses. It is important to have a clear policy on CBiP and that policy must link to other corporate plans and policies. For example, our CBiP policy relates directly to our Regeneration and Improving Outcomes Plan. This ensures that the CBiP has legitimacy and anyone across the council can quickly identify how CBiP relates to wider council objectives. There is so much information and guidance available now which shows how TRT clauses can be done in compliance with procurement regulations that it seems to me any fears about breaking the law can only be an excuse for non-action. If we [council] can do it then so can all of the other councils. 2 The results apply to the 21 of the 32 councils that responded to the research, unless otherwise stated, and opinions are from the respondents who participated, usually the Employability Lead officer within the local authority. 6

9 Introduce Community Benefits at Outset: The overwhelming body of evidence stresses the importance of considering TRT clauses ideally at the very beginning of the procurement process, but practically speaking as early as possible, to ensure a good fit with both the council s and the contract s objectives. Occasionally a procurement manager will come to me [the CBiP Lead Officer] and ask for advice about how to include a TRT clause in their contract. The problem is that the contract has already been created and is about ready to go out to tender. I have to tell them at this point it is too late to be thinking about CBiP and that the next time they need to come to me as soon as they start thinking about procuring. Build a Compelling Business Case: It was widely agreed by respondents that before deciding to go down the TRT clauses route a compelling business case is required that a) demonstrates how this fits in with wider council goals and objectives and b) creates appeal for potential bidders. To demonstrate fit with the council, procurement staff can make links to other council strategic documents, or undertake a cost benefit analysis looking at the long term savings which can be made as a result of the TRT clauses. The benefits could include decreased local unemployment, increased local authority tax revenue, etc. The business case must also create incentives for potential bidders. This means ensuring that potential bidders understand the process of CBiP, and are aware of all additional You need to have a solid business case before you go out to tender, one that shows how what you are doing fits with current council agenda and also shows what it has to offer for the contractor. For contractors, this can sometimes be as simple as demonstrating how CBiP is not something which is time consuming or complex, and that a lot of the work will be stuff that they would be doing anyway, just that the TRT clauses require them to record that they are doing it. funding, incentives and support available to them to help achieve the requirement of the TRT clauses element of the contract. Additionally, since CBiP has been endorsed by the Scottish Government and is therefore something that is going to be increasingly asked for by a whole range of public bodies, it can be highlighted that getting involved and gaining experience with TRT clauses at this stage will give them competitive advantage over other companies who have not done work of this sort. Be Clear, Specific and Give TRT Sufficient Weighting: Once a decision has been made to include TRT clauses, work needs to be undertaken to ensure that what is being asked for is SMART; specific, measurable, achievable, realistic and time measurable. This ensures that contractors are clear about what the procurement authority are expecting and means that procurement staff can evaluate potential tenders in a fair, transparent and objective way. CBiP must be given sufficient weighting as part of the overall contract award as contractors will only pay as much attention to TRT clauses as procurement officers give them A generic clause at the contract notice stage ensures that those moving forward to the pre-qualification questionnaire (PQQ) and invitation to tender (ITT) stages are well aware of the expectations that CBiP will form part of the core requirements. 7

10 Build Robust Monitoring Systems Councils must ensure that there are robust monitoring systems in place for the CBiP The key to securing your CBiP is element of the contract. The contract should ensuring that you have robust set out when and how contractors are to report to the council. Without such systems in place the council will be unable to track progress or check whether the contractor has fulfilled their obligations. Councils may even be open to monitoring systems for the CBiP. The contractor needs to be reporting back on a regular basis so that any problems or issues can be resolved quickly before they escalate. legal challenge from bidders that lost out on the winning contract if procedures are not in place to monitor the winning contractor s performance on the TRT element of the contract. Key Success Factors: In addition to identifying the essential ingredients, the lead officers involved in the research were asked what they thought were the critical success factors for TRT clauses. Corporate Support: It was widely agreed that having corporate and political support for TRT clauses is necessary, where the ambition is to embed TRT clauses across the whole council. Respondents stated that the involvement of council leaders and/or endorsement of the policy at a senior officer level can often act as a catalyst for service team heads and, in turn, influence service team managers and their staff. Having the Chief Executive on board has made a huge difference to the commitment of other departments within the council and has really helped to push through this agenda. Without this high-level backing it is difficult to see how we would be where we are now with TRT clauses. Community Benefit Lead Officer: Respondents argued that TRT clauses are more successful in organisations where there is a named individual who has overall CBiP policy responsibility. In several of the larger councils a new full time position of Community Benefit Manager has been created. However, in smaller councils where there are fewer contracts to be procured it may be possible to assign CBiP responsibilities to an existing officer, for example within economic development, regeneration or procurement. Whichever approach is taken, it is essential to have a named individual with: Overall responsibility for CBiP policy. Although TRT clauses should really be seen to be everyone s responsibility, having a CBiP Champion who is in charge of driving forward the approach helps greatly, particularly in the early stages of introducing TRT clauses into the organisation. That individual should be passionate about the CBiP cause and proactively spread the word about the benefits of CBiP across the whole council. A strategic overview of council-wide activity. Good awareness and understanding of the benefits and challenges associated with TRT clauses. The skills and knowledge to support and encourage others within the council to use TRT clauses within their contracts. Sufficient time and resources to enable them to achieve this. 8

11 Supporting the Contractor and a Single Point of Contact: There was a consensus that critical to a successful TRT outcome is support for contractors throughout the duration of the contract. This includes signposting the contractor to supply chain agencies and other organisations that can support them and identifying all available funding and grants which contractors are entitled to apply for. The evidence from this research and other studies indicates that this works best where the support service is established as a single point of contact where there is one person or one team from which all relevant stakeholders, including contractors and internal colleagues, local supply side organisations and employment agencies can obtain information on TRT clauses. Introducing the single point of contact has made the TRT process so much easier. It ensures a consistent and streamlined approach throughout the Council. I know from feedback from internal colleagues, contractors and supply side organisations that the single point of contact is working. In my opinion the single point of contact is one of the main reasons for our success with TRT clauses. Information Sharing All respondents felt that if information was shared more readily between local authority Community Benefit Lead Officers on their experiences both positive and negative with TRT clauses, then the standard of implementation could be driven up. We need to get better at sharing information across councils. We need to let others know where we have had a good experience and something has worked. Likewise, where we have had a bad experience and something has not worked, we need to be telling others so that other councils can avoid making that same mistake. If we all worked together we could really drive up the standard and ensure a higher benchmark for TRT. Learn, Develop and Review Once TRT clauses have been introduced into council contracts and targets have been achieved this is not the end of the process. The council needs to continue to regularly review and update its CBiP policies and learn from its experiences. CBiP is a process; there is not a set point which a council will reach and can then say: We have done CBiP, we have done TRT clauses. That s us done. There is always room for improvement and development. We [local authority] have been doing CBiP for years now but are still on a learning curve. Other authorities might not be so far along as us, but they are still on the same learning curve. We are not under any illusions that we are near an end point. No approach in CBiP is perfect but it is about learning and developing and making changes accordingly. 9

12 ANNEX: CASE STUDIES 1. Aberdeenshire Council 2. Clackmannanshire Council 3. City of Edinburgh Council 4. Falkirk Council 5. Fife Council 6. Glasgow City Council 7. Inverclyde Council 8. Midlothian Council 9. North Lanarkshire Council 10. South Lanarkshire Council 10

13 ABERDEENSHIRE COUNCIL Community Benefit Lead: Annette Johnston, Tackling Poverty and Inequalities Cocoordinator Council Policy: Aberdeenshire Council is entering into a phase of large scale development and has committed to integrating TRT clauses into all of their contracts. The Council s Capital Plan Work s Framework was set up on the 30 September 2010 and covers the proposed capital spend over the next 15 years. The Council is using the Construction Skills Client Based Approach 3 to set TRT requirements for every project within the Capital Plan. One contract within the Capital Plan has begun and a number are due to start in Although the Capital Plan involves construction contracts, Aberdeenshire Council have been quite progressive by also including TRT clauses within contracts for services. For example the Council has included TRT clauses in recent maintenance and repairs contracts. As these contracts have tended to be relatively small the council took the decision to focus the TRT clauses on young people who were leaving care. This example shows that TRT clauses need not just be limited to large scale construction contracts but can be incorporated into almost any procurement contract, large or small. Additionally the council has been asked by the Scottish Prison Service (SPS) to monitor the TRT element of the contract in HMP Grampian Prison, providing a similar reporting role to that of North Lanarkshire Council in the contract for the extension of Shotts Prison. Obstacles: Cultural and legal issues were identified as barriers to embedding TRT clauses as a business as usual approach within Aberdeenshire Council. Although awareness of TRT clauses has been growing, there remains some misunderstanding among service managers. It appears that some managers are deterred from including TRT clauses because they still believe that this process is complicated and/or time consuming and/or costly, as well as being incompatible with EU procurement regulations. The Community Benefits Lead Officer therefore has a task ahead in attempting to dispel these myths and encourage managers to start using TRT clauses. It was recognised that this would not be something that would happen overnight, but would probably take several years and will involve slowly chipping away at previously held beliefs on TRT clauses. The Community Benefits Lead Officer is practical and believes that the best way of achieving this is by getting procurement staff involved with TRT clauses and by experiencing them they will in turn learn that it is not complicated, time-consuming or costly. Although legal uncertainties had been an initial challenge this was becoming less of an issue. Conclusions: Aberdeenshire Council has shown a genuine commitment to increasing their use of TRT clauses over the next 15 years through their Capital Plan. A strong Community Benefit champion within the organisation, who is spearheading this work, will ensure that significant progress is made toward imbedding TRT clauses across future council contracts both in construction and in other contract types. There is also a realistic awareness of the challenges the council will face in taking the TRT approach forward and appropriate strategies are being built to ensure the greatest chance of future success. 3 Construction Skills Scotland Client Based Approach was developed by the skills academy to assist public bodies in setting TRT requirements. The approach provides guidance to councils thinking of including TRT clauses within their construction contract around setting targets and monitoring. They offer free advice to all councils and further information can be obtained from their website: [accessed October 2012] 11

14 Further Information: Annette Johnston, Tackling Poverty & Inequalities Coordinator Tel:

15 2. CLACKMANNANSHIRE COUNCIL Community Benefits Lead: Jane Adamson, Economic Development Council Policy: Over the last year, several policy papers regarding CBiP have been developed by the Economic Development department within Clackmannanshire Council. Additionally, a Sustainable Procurement Policy which includes TRT clauses has also been produced. A report was set to go to Clackmannanshire Council which, if endorsed, would ensure that the use of TRT clauses would be incorporated in council tenders as the default position unless there were exceptional reasons why this should not be the case. At the moment the Council s Economic Development team work closely with the Procurement Manager and council officers involved in procurement to ensure that TRT clauses are included in appropriate contracts and to provide support to successful contractors when appointed. Contract: Kilncraigs Campus Contractor: Marshalls Construction Time Period: March 2011 start with anticipated completion date July 2013 TRT Clause: 10% of the total person weeks on site had to be delivered by new entrants. New entrants are usually defined according to the Scottish Government as a person leaving an educational establishment or a training provider, or is currently unemployed and is seeking employment. 4 (Scottish Government, 2011) Summary of Contract: Kilncraigs Campus is a disused mill and a former school. The contract is to convert the building into the new Clackmannanshire Council headquarters. The value of this contract is around 6 million. Prior to formulating the TRT clauses for the Kilncraigs contract, documentation was consulted to learn from current practice elsewhere. Advice was also sought from Falkirk Council and Glasgow Housing Association both of which have significant previous experience of TRT clauses. The Economic Development, Procurement and Legal team then worked collaboratively to create the CBiP requirements for Kilncraigs. The same team were then involved in developing model TRT clauses that could be used in future contracts making it easier to scale up the TRT approach in the future. Although the council had used the Construction Skills Scotland Client Based Approach in the Kilncraigs contract, targets were tailored to take into account other council construction activity. A collaborative approach between Economic Development, Procurement and Legal was again taken in assessing the bids. Supply Side: There are also now strong links with the supply side. The council has developed a single point of contact Clackmannanshire Works for contractors, council managers, and supply side organisations. This service provides a range of support to all relevant stakeholders on anything to do with TRT clauses and CBiP more generally. 4 For a full explanation of the Scottish Government s definition of New Entrant see 13

16 Reporting: There are robust monitoring systems in place for the Kilncraigs contract with the contractor required to submit quarterly performance figures showing their progress on the TRT clauses. Although there is no specific Community Benefit liaison officer on the contracting side, the site administrator has taken a lead in ensuring compliance with the TRT element of the contract and has forged a good relationship with the council s Community Benefit Lead Officer. The site administrator has been responsible for ensuring that information on TRT performance is delivered consistently and within a good timescale. Obstacles: By the time the winning bidder came to deliver the contract their financial position had changed and the company was faced with having to make redundancies. Because of this the council allowed the contractor some degree of flexibility in how they achieved the TRT requirements whilst maintaining sight of the overall objective: to increase employment opportunities for local people. Due to this greater flexibility, the contractor was able to preserve local jobs which would otherwise have been lost, but was additionally able to create new opportunities for young people in the area as set out in the TRT requirements. Outcomes: To date, the Kilncraigs contract is on track to meet the requirement of 10% of total weeks on site to be new entrants. The contractor has taken on 4 new entrants and delivered 28 of the 80 weeks of required work experience. The contractor has also allowed one of their other sites to be used by Clackmannanshire Works to deliver excavator training for 2 of their clients and is working with the council s Ranger Service to provide materials and equipment to upgrade community footpaths. The council states that the TRT requirement has not increased the cost of procurement when considering the lifetime cost of the service, and they can see that if greater use was to be made of TRT clauses it could help to improve outcomes for young people in the area. Conclusions: Over the last couple of years the council have made good progress in developing a CBiP policy. Although there is still a long way to go before CBiP becomes the business as usual approach, there is a clear desire within the council to increase TRT-type activity. Clackmannanshire Council is the smallest of all Scotland s councils and does not have the spending capacity of some of the larger councils. The council realises that although there are relatively few large scale contracts TRT clauses can also be used in medium to small sized contracts with success. Further information: Jane Adamson, Economic Development Tel: jadamson@clacks.gov.uk 14

17 3. CITY OF EDINBURGH COUNCIL Community Benefits Lead: Brian Martin, Senior Manager, Employability and Skills Council Policy: The City of Edinburgh Council has been using procurement to gain social benefit for around ten years. The issuing of Scottish Government Guidance in 2008, Community Benefits in Public Service Procurement, acted as a catalyst for the council to review and refresh their policies on CBiP and to mainstream the use of TRT clauses in procurement contracts. Edinburgh now has a written policy which sets out the council s intention to use TRT clauses in all appropriate procurement contracts, CBiP is endorsed in several strategic council documents including the council s Sustainable Procurement Strategy and there is support and widespread recognition of the benefits of TRT clauses at a political and corporate level. In March 2011, the Council agreed to include the following Community Benefits in council contracts, and this decision is enacted in the Sustainable Procurement Policy: Community Benefits in the context of social issues include not only targeted recruitment and training but also equal opportunities, contributions to education, encouraging bids from SMEs and the third sector, the environmental benefits which may be gained from the use of sustainable materials, the use of recyclable materials, the use of low emission vehicles and the use of local supplies to reduce food miles. Community Benefits may also include opportunities to lower unemployment and provide good quality jobs, create economically successful areas and regeneration, provide good facilities for the young and old and collaborative working with the third sector. (Report to Finance and Resources Committee, 29 March 2011) The Council s Economic Development Unit has taken a lead role in supporting the Council s commissioning managers in applying Community Benefits in the procurement of goods and services. To date, the focus of CBiP activity has been in construction contracts but it is the Council s ambition to roll out CBiP across all areas of procurement where possible. The council is presently looking at how CBiP could be included in contracts for repairs and maintenance and this is likely to be the next stage in CBiP activity. Support is available to all departments and commissioning managers in the council, with Employability and Skills acting as a Community Benefits Team providing advice and guidance on types of benefits that could be realised and offering to act as a single point of contact to manage the relationships between the council as client, the contractor or service provider and other stakeholders including community interest groups where relevant. This support has seen an increase in demand over the last year particularly from internal managers interested in using CBiP. It is hoped in future that applying community benefits to council spending will be a checklist item which is part of the overall procurement process that is automatically applied. Economic Development will continue to advise on TRT outcomes and KPIs. Similar support on wider community benefits is available through Services for Community departmental officers. Contract: Extension of Edinburgh International Conference Centre (EICC). Contractor: Sir Robert McAlpine (SRM). Time Period: Oct 2010 Jan

18 TRT Clause: Contractor to provide minimum 10% of expected workforce as new entrant opportunities quantified as 18 posts, including 4 Modern Apprenticeships. Summary of Contract: Economic Development worked collaboratively with the council s Procurement and Legal teams to develop the TRT requirements for the Edinburgh International Conference Centre (EICC) contract. Model clauses which had been developed as part of the previous contract for the building of social housing were amended for application within the EICC tendering. The council required that all bidders clearly set out in their methods statements how they would meet the TRT requirements. A lead officer from Economic Development worked with the Procurement team to evaluate and score the Community Benefit element of the final bids. The extension of the EICC was the second major contract where the council has applied CBiP and lessons learned and applied to the monitoring of this contract drew on the earlier experience. These lessons were largely around the need to have: a named single point of contact from both sides to identify the opportunities and to support the contractor in selecting suitable candidates for the posts. early sight of the opportunities across a workforce plan, allowing the providers to better prepare and present candidates who were a close match to the needs of the employer. a regular planning meeting to identify future recruitment needs, which has also allowed monitoring of Community Benefit KPIs. Supply Side: Throughout the EICC contract, the council s named contact worked closely with SRM in order to plan in advance when new entrants would be required and what skills they would require. This saved SRM time and resources and importantly ensured that the positions were being filled by the council s target group. In the end the majority of new entrants were sourced from the providers delivering Get Ready for Work training. It is important to note that whilst it brings credibility to the training interventions where the local training providers can supply many of the candidates to the opportunities, the wider mainstream network could be called upon if either no suitable candidates could be found or not enough wanted to apply. The wider partnership included SDS and Jobcentre Plus. Reporting: The monitoring and reporting systems for the TRT clauses were reviewed following the post contract evaluation for the previous contract that had included a TRT clause. As a result of this review, systems were strengthened for the EICC contract. The council ensured that there was greater clarity for the contractor around what reporting information was required, and that only essential information was collected. The contract stipulates that the contractor is to send monthly performance information to the council reporting on the progress against specific TRT targets. Additionally, there are bi-monthly site meetings between the council and the contractor where progress on TRT targets is also discussed. The contractor has, to date, fulfilled all of its requirements with regard to reporting. Outcomes: The contractor has surpassed the new entrants target set by the TRT clauses and has so far employed 27 new entrants instead of the required 14. Moreover, there are plans for another 6 new entrants to commence work in the coming months. The contractor has demonstrated their satisfaction with the process by providing other vacancies for new entrants on a separate development outwith the contract which they are delivering and where no Community Benefit obligations exist. The contractor has not quite met the apprenticeship target, recruiting only 3 out of the 4 planned for, but the nature of this development meant that this target was always going to be a challenge due to the short time many of the trades were on site. The regular monitoring meetings and understanding of the workforce needs of the development provided the necessary information to the team with regard to this. Although the council is keen to ensure that as many apprentices are taken on 16

19 as possible, its overarching goal is to create long term sustainable employment and it is therefore keen to avoid the situation where a young person is employed as an apprentice for a short time. Negotiations are taking place with the contractor to ensure that if a further 2 apprentices were taken on they would be guaranteed to be able to complete their apprenticeship on another site. Obstacles: As alluded to above, many of the issues experienced in the initial TRT contract were resolved and thus were avoided in the delivery of the EICC contract. This demonstrates a clear commitment to self improvement on the part of the Council. One such difficulty which the council experienced (and a problem that has been common with other councils) was that the contractor sourced some candidates independently, albeit the majority were from Edinburgh s Get Ready for Work programme. This made it more difficult for the council to check that the employees met the new entrant requirements specified in the contract. Using a single point of contact to handle vacancies was a simple fix to address this problem. Conclusions: One of the strengths of the City of Edinburgh Council s TRT approach is that the Employability & Skills team of Economic Development have acted as expert adviser through all stages of the procurement process - from formulating the question and assessing the bids through to monitoring the contract KPIs. This continuity brings a balanced approach, ensuring that both client and contractor achieve the outcomes and added value they want. The City of Edinburgh Council is making good strides towards embedding TRT clauses within its procurement contracts and is exemplifying good practice in CBiP through its Sustainable Procurement policy. The use of TRT clauses in two major construction contracts in recent years has set an important precedent and there is now a presumption in favour of these in all construction contracts over 100,000 in value and/or over six months in duration. The council recognises that it is not yet at the stage where TRT clauses are a business as usual approach across all procurement areas. However, it is clear that the building blocks for this change are firmly in place and that it will only be a matter of time before TRT clauses are routinely considered in all procurement contracts. Further Information: Brian Martin, Senior Manager, Employability and Skills Tel: brian.martin@edinburgh.gov.uk 17

20 4. FALKIRK COUNCIL Community Benefit Lead: James King, Central Procurement Unit Name of Contract: The Helix Canal Extension Contractor: Balfour Beatty plc TRT Clause: Provide training for at least 11 new trainees for the duration of the contract who are obtained from a source agreed by the council. Summary of Local Authority CBiP Policy: Falkirk Council has been investigating the potential of incorporating TRT clauses in the procurement process since 2003/4. This was formalised with their participation in the Scottish Government pilots on CBiP and the resultant report included a case study for the construction of four secondary schools which achieved 29 Modern Apprenticeships for Falkirk school leavers and 5 General Construction Operative positions for long term unemployed adults. The clauses included within the facilities management element of the contract resulted in 3 Facilities Assistant positions. For a number of years Falkirk Council s policy has been a business as usual approach, to achieving TRT outcomes from the inclusion of Community Benefit requirements within procurement processes across all council services. This policy links to various council strategic documents and plans including Falkirk s Strategic Community Plan. Within the council there is strong support from Elected Members and a presentation was given to Heads of Service, introduced by the Chief Executive, to further embed the business as usual approach. All contracts that come through Central Procurement Unit and all building contracts are considered for the inclusion of TRT clauses by using the value, duration and scope of the work involved to determine the number of opportunities and whether the opportunity is for work experience, pre-apprenticeship training or a Modern Apprenticeship. The policy allows the council to not only include TRT clauses in traditional building contracts but also in Service Framework Agreements including the following: Framework Agreement for Electrical Heating Replacement Framework Agreement for Gas Heating Replacement Framework Agreement for Periodic Electrical Testing Framework Agreement for Skip Hire & Recycling Service Framework Agreement for Deep Cleaning Kitchens Summary of Contract: The Helix project is a 300 hectare regeneration project, which will transform under-used land between Falkirk and Grangemouth. An outdoor recreational space will be provided upon completion of the works, which will include a canal extension and hub, large scale sculptures and the development of green space areas. The works comprise the design and construction of: a new sea lock, including all associated M&E, and including lock gates and river works from the River Carron to a new extension to the Forth and Clyde canal including all waiting areas; new lift bridge over the new canal extension; new 65m under-bridge to the M9 to take the canal below a major trunk road; new boat turning pool; new Kelpie lock and new canal link sections; and break through to existing basin adjacent to existing sea lock (Lock 2) on the River Carron. Falkirk Council already had an established process whereby the contracting service met with the Procurement Officer (Community Benefits) and a Principal Officer from the council s Employment & Training Unit (ETU) to discuss and agree the number of training opportunities 18