Community Benefits Agreements in the United Kingdom
December 17, 2019
This is one of a series of articles, based on a report commissioned by the Canadian Council for Public-Private Partnerships (CCPPP).
Pilot projects by Scottish public bodies in 2006 emphasized targeted recruitment and training, and social procurement. A 2008 report, published by the Scottish government, outlined a method for including Community Benefits Agreement (CBA) clauses in public contracts. Community benefits clauses are now standard in the public sector. Hosting the 2014 Commonwealth Games in Glasgow was one key project that encouraged public authorities to implement community benefits clauses.
The Procurement Reform (Scotland) Act 2014 applies to the awarding of public contracts. It requires that community benefits be considered as part of all procurements for all projects of at least £4,000,000. The Act came into force in the spring of 2016, but is considered far behind the state of actual practice. Community Enterprise in Scotland, a social enterprise support agency, claims that community benefits are so well accepted that “the question is no longer whether to have community benefits clauses, but how.”
Community benefits clauses in Scotland have focused primarily on workforce training, and only secondarily on local supplier or social enterprise opportunities.
Community benefits clauses are generated “top-down” in Scotland, with little community consultation. A Community Benefits Champions Network, started by the Scottish government in the late 1990’s, brought together procurement officers from public organizations and agencies to exchange best practices about community benefits. The Network provides a discussion forum for current issues and best practices.
Since the government drove community benefits in Scotland, considerable documentation has been generated, about processes, methods, and impact. A report by the University of Glasgow provided a comprehensive analysis of the impact and value of community benefits clauses in contracts. This report was based on a large-scale survey of public organizations and an in-depth analysis of 24 contracts, ranging from £700,000 to £842 million (about C$1.4 million to $1.7 billion).
UNIVERSITY OF GLASGOW STUDY OF SCOTTISH CBAs
62 public organizations used community benefits clauses between 2009 and 2014. Of those, 59 percent had a designated “champion” or procurement officer responsible for community benefits.
Based on 24 contracts analyzed:
- More than 1,000 people from priority groups recruited as a result of the contracts, 38 percent of whom would not otherwise have been recruited
- Over 200 apprentices from targeted groups recruited, 73 percent as a direct result of the contracts
- 650 people from priority groups accessed work placement, 72 percent as a direct result of the contracts
- Over 6,700 people from priority groups received training
- Targets exceeded: job opportunities, apprenticeships, work placements, and training for priority groups
- Employment sustainability reached 75 percent for priority groups recruited through community benefits clauses (many contracts were still ongoing)
While private developers in Scotland have not adopted community benefits clauses as quickly, private contractors have seen community benefits become standard in the public sector and are adopting CBAs to improve their position when bidding on future public contracts. With experience, private contractors are becoming more creative in how they develop community benefits programs.
Many local authorities are implementing community benefits clauses into smaller projects, as small as £50,000. Experience with other CBA projects guides them to determine benefits that they can include without risking quality or slowing the process.
A senior executive at a large construction firm told us of bidding on a school in Scotland. The agricultural community had a wool processing plant that was in financial difficulty. His firm examined the feasibility of using wool insulation in the school, which was common before fiberglass was developed, and proposed this in their bid. This gave the mill both a short-term boost and a new product line to improve its fortunes in the long term.
In 2003, the Welsh Community Benefits in Public Procurement initiative began with a pilot project focused on construction, aiming to incentivize contractors to employ and train a percentage of its workforce from among the unemployed. Of the first 35 projects worth £465 million, 85 per cent was reinvested in Wales, with £124 million directly affecting the salaries of citizens and £366 million towards businesses in Wales. Additionally, 562 disadvantaged people received 15,460 weeks of training. While community benefits were not enacted in legislation, the Welsh Minister for Finance states that adoption is not optional and legislation will be considered if needed.
As of April 2016, Northern Ireland’s “Buy Social” requirements apply to procurement above £2m for construction and above £4m for civil engineering.
The Green Skills Partnership for London is a coalition of trade unions, employers, training providers, community representatives, sector skills councils, local governments, and Job Centre Plus. Its aim is to create local jobs, apprenticeships, and access to accredited courses. One project, the Elephant & Castle redevelopment, created 450 living-wage employment opportunities for unemployed residents, emphasizing the most disadvantaged. It includes employment and sustainability:
- Innovative engagement of local communities to tackle climate change and build sustainable communities;
- Support for vulnerable groups and unemployed to develop environmental literacy;
- Progression routes for job seekers;
- Supporting disadvantaged and young people to find training and work in the green economy.