Responsible procurement update and revised targets

Report: 6
Date: 10 June 2010
By: Director of Resources on behalf of the Commissioner

Summary

This report informs members of progress against the Four Year Responsible Procurement plan and, in particular, seeks approval for revising targets provisionally put forward by the MPS.

Please note that environmental targets within the four year plan have not been included within this report as a separate update was provided to the MPA by Environment Team on 18th March 2010.

A. Recommendations

That Members

1. Note the significant progress made against the targets set out in the Four Year Responsible Procurement plan approved by the MPA in January 2009.
2. Approve the revised MPS targets provisionally put forward to the GLA.

B. Supporting information

1. In January 2009 the MPA approved targets put forward as part of the Four Year Responsible Procurement plan. Since approving these targets significant progress has been made. However, changing priorities and lessons learned during the past year have led to the revision of some targets.

2. The aims of the Four Year Responsible Procurement plan are to improve three key areas relating to distinct customer groups within the capital under the banner of:

• Our People - improve standards of living and promote opportunities for sustained employment for Londoners
• Our Businesses - Open up opportunities for London’s businesses and to promote equal life changes for all the business community
• Our City - Promote greater environmental sustainability and make London a better place to live and work

Our People

London Living Wage

3. The London Living Wage (LLW) is a London weighted minimum wage, which takes into account the higher living costs of London and is intended to ensure that those in low-paid jobs are paid a wage that takes into account the high cost of living in the Capital. The figure currently stands at £7.60 per hour; £1.87 above the National Minimum Wage.

4. During 2009/10 the MPS target was to ensure a minimum of 750 people paid below the LLW receive the increase. By working with suppliers to pay the London Living Wage the MPS has contributed to improving the quality of life of 780 Londoners. These people are in typically low paid service industries for example cleaning, catering and temporary labour.

5. During 2010/11 following the announcement from the GLA of the new London Living Wage we intend to increase any MPS staff or supplier’s staff working on MPS contracts in London who would be paid less than the new Living Wage.

Skills and Employment

6. Skills shortages have begun to emerge in London within a number of industries particularly in technical and engineering fields. Furthermore, the current economic downturn has brought forwards short-term training needs, with a necessity to develop a workforce capable of learning and applying new skills.

7. During 2009/10 the MPS target was to support 10 young people into work placements. The MPS established agreements with educational institutions to provide 123 young people one year work placements across a variety of locations and Business Groups within the MPS, including Central Operations, Specialist Crime, Resources, HR and Territorial Policing.

8. During 2010/11 the existing target is to support at least a further 10 young people into work placements in the MPS. However, based on 2009/10 performance we hope to over achieve this target.

9. The MPS is committed to providing a total of 150 apprenticeship opportunities per annum, 50 within the supply chain and 100 internally. During 2010/11 the MPS has 155 internal apprenticeships and 10 apprentices working on facilities management contracts. This is a long term commitment for suppliers and has taken significant partnership working to see results. Meeting this target has been challenging both internally and within the supply chain due to the current economic climate and the financial pressures experienced, the other functional bodies of the GLA have experienced similar difficulties.

10. During 2010/11 we intend to place a further 150 apprentices internally and within our supply chain. In order to support the MPS in achieving this target we have secured support from a Skills Broker funded by the GLA. The role of the Skills Broker is to work with suppliers to support and identify funding opportunities for apprentices.

11. For ex-offenders it is often particularly challenging to find sustainable employment, the MPS has recognised this problem and along with other members of GLA Group we were committed to supporting 5 ex-offenders into work. The MPS requests that all supplier staff members working on MPS sites are fully security vetted. Therefore it is extremely unlikely that any ex-offenders working on our contracts would pass vetting. Therefore it is not practical or realistic for the MPS as a police force to continue with this target.

Our Businesses

Making our Contracts accessible to a wide number of businesses

12. CompeteFor is a website that allows public and private sector organisations to channel procurement opportunities towards local businesses as well as providing purchasing efficiencies and gaining transparency of supply chains. This portal was originally established by the LDA on behalf of the UK regional development agencies for advertising procurement opportunities for the London 2012 Olympic and Paralympic Games. The system qualifies all suppliers in health & safety, sustainability and quality before they are able to tender for business.

13. During 2009/10 the target for CompeteFor usage was for 3 opportunities to be advertised through the portal, with an additional 10 agreed late in 2009. The original target was set during the implementation of Bluelight, in order not to detract from the Bluelight implementation a discreet trial for CompeteFor was set up. We have over-achieved this combined target by publishing a total of 30 opportunities on CompeteFor.

14. During 2010/11 we intend to run a pilot across 5 boroughs utilising CompeteFor for purchases below the £50,000 threshold. In line with the MPA contract regulations utilising CompeteFor will support local boroughs in sourcing 3 quotes for each procurement exercise whilst enabling them to target market to SME’s across London and surrounding areas. Therefore we are proposing to increase the target to 50 opportunities for 2010/11

15. We therefore, propose an amended target to run a pilot for CompeteFor across 5 boroughs for under £50,000 expenditure by the end of the financial year, with a decision to proceed or not in December 2010 for full implementation.

Payment to SME’s

16. The Mayor’s Economic Recovery Action Plan (ERAP), launched in December 2008 sets out practical measures to help businesses and Londoners through the recession. The plan includes wide-ranging activities to stimulate economic recovery, one of which is for the GLA group to reduce standard payment terms for SME’s to 10 working days.

17. During 2009/10 Finance Services enhanced payment processes to increase the speed of payments to SME’s from an original baseline of 14% paid within 10 days to 77% reported in March 2010.

18. During 2010/11 the MPS proposes a further target to work towards 90% of SME’s paid within 10 days by March 2012.

Diversity Works for London

19. Diversity Works for London is a Mayoral programme that encourages and supports businesses by providing a comprehensive suite of tailored business support products. The programme enables companies to improve their diversity proficiency.

20. The MPS’s target was to encourage 10 suppliers to sign up by March 2010, at present we have 4 signatories. During the course of the year the programme has been re-designed including an intermediary level which will enable more suppliers to work towards the standard. The MPS has a target for 1 key supplier to achieve gold by March 2012. This has not been met, however, currently 1 supplier is working towards achieving gold.

21. During 2010/11 the MPS will continue to work with new and existing suppliers to encourage signatories to the scheme - there is no target for 2010/11. However, the MPS will continue working with a number of key suppliers to ensure at least 1 will achieve the gold standard by March 2012.

The Mayor of London’s Green Procurement Code

22. The Mayor of London’s Green Procurement Code is a support service for London based organisations committed to reducing their environmental impact through responsible purchasing. They provide practical advice and online resources to help embed green purchasing into all aspects of an organisation, including sourcing green products.

23. During 2009/10 the MPS committed to a target of 10 suppliers signed up to the Mayor of London’s Green Procurement Code by March 2010. At present 8 suppliers have signed up to the Code. There are, however, a number of potential suppliers in the pipeline that will enable us to meet this target by end of July 2010.

24. The MPS currently has a target of 5 key suppliers to achieve gold by March 2012, 1 supplier is currently reporting bronze and 5 other are applying for bronze/silver during May 2010.

25. In recognition of the process improvements made by Procurement Services and the Environment Team, the MPS has been successful in achieving a Gold Award for the Mayor London’s Green Procurement Code (the highest level available). The MPS intends to retain the gold award for 2011.

26. The MPS was also chosen by the Mayor of London’s Green Procurement Code as the case study organisation for our work on policy, strategy and communication.

27. Following the success on the Mayor of London’s Green Procurement Code the MPS requested an external consultant to validate our position on the Government’s benchmarking tool for Sustainable Procurement (Sustainable Procurement Flexible Framework). The MPS achieved the highest level available to public bodies, Level 5. We believe that the MPS was one of the first to achieve this along with London Fire Brigade and Transport for London (TfL). The MPS intends to maintain a level 5 for 2011.

Ethical Sourcing

28. Ethical sourcing is a key issue in a company's responsibility for fair and equitable practices across its supply chain. It takes into account responsibility for working with its suppliers to implement internationally accepted labour standards in the workplace. It aims to ensure that, through good supply chain management, workers' rights are respected. The MPS has adopted Sedex, the Supplier Ethical Data Exchange, to monitor the management processes of organisations within the MPS supply chain. Sedex is a membership organisation for businesses committed to continuous improvement of the ethical performance of their supply chains.

29. The MPS has an existing target to encourage 5-10 suppliers to be registered to Sedex by the end of 2011. At present 3 uniform suppliers have registered with Sedex as a result of direct engagement by the MPS.

30. During 2010/11 the MPS intends to review and enhance their ethical sourcing strategy.

Carbon Reduction

31. The Carbon Reduction Commitment is the UK's mandatory climate change and energy saving scheme launched in April 2010. Although the Scheme currently has no requirement to report “scope 3” emissions (those emissions emitted on your behalf by your suppliers) it is likely that this will be a requirement in the future. Carbon disclosure of “scope 3” emissions is a relatively new area and MPS, together with the GLA group, are keen to be at the forefront of these developments. We propose to encourage key suppliers to sign up to Carbon Disclosure Project (CDP).

32. CPD is an organisation based in the United Kingdom that works with companies to disclose their greenhouse gas emissions.

33. During 2010/11 the MPS intends to monitor the environmental and carbon performance of suppliers and work with them to reduce their carbon emissions. The first step and new target we propose is to ask at least 3 suppliers to sign up to the CDP by July 2010.

Road Safety

34. The Freight Operators Recognition Scheme (FORS), an initiative backed by TfL, forms part of the plan for sustainable freight operations across London. It sets a quality standard for freight operators designed to bring benefits in efficiency, road safety and environmental performance. FORS is free, voluntary and open to any company operating vans or lorries in London. TfL has made membership of the scheme a requirement in cases where it is relevant to their suppliers. The MPS wishes to do the same.

35. The MPS proposes a new target to encourage at least 5 suppliers to sign up to the FORS by March 2012.

Our City

Leadership

36. In conjunction with the Association of Chief Police Officers (ACPO) and the National Police Improvements Agency (NPIA), the MPS is leading the other police forces in England and Wales on Sustainable Procurement. This includes creating a document repository of tools and case studies to allow easy access to the work done by the MPS and others. The MPS also chairs a working group to share best practice and aims to set the national standard for sustainable procurement in the Police Service that can be used to set the standard to compare others against.

37. The Director of Procurement Services is the ACPO lead on Responsible Procurement via the ACPO Procurement Portfolio

Training

38. During 2009/10 72% of people within Procurement Services have been trained in a full day face to face course on Responsible Procurement in order to up skill new starters and existing procurement staff. We have also, in conjunction with the GLA, implemented an e-learning portal which provides a high level overview of Responsible Procurement which is aimed at all staff with buying responsibilities and also our suppliers to increase their knowledge of MPS requirements.

39. During 2010/11 we intend to run a further two face-to-face Responsible Procurement training courses and role out the e-learning portal. We therefore propose a new target to encourage 95% of Procurement staff to use the new Responsible Procurement e-learning portal and encourage suppliers to review the supplier version.

Waste Reduction

40. In order to continue waste reduction and increase energy from food waste the MPS proposes a new target to recycle all waste food oil and pilot Thermophilic Aerobic Digestion (TAD) across 5 sites by March 2011. TAD is a composting process which can be used to treat waste food or other organic materials in a liquid slurry or semi-solid form.

Environmental implications

41. Responsible Procurement will have a positive social, economic and environmental impact. The environmental impact will be particularly positive in relation to suppliers signing up to the Carbon Disclosure Project, Mayor of London’s Green Procurement Code and FORS.

C. Race and equality impact

The revisions to the four-year plan aim to further improve the diversity of the workforce within London and increase the life opportunities for those who suffer prejudice and discrimination. Furthermore, revised targets will drive diversity within our supplier base and open opportunities to a broad range of organisations. Any impact would be positive.

D. Financial implications

The activities carried out and proposed, as set out in this report, are all covered by existing business wide budgets as set out in the 2010/13 Business Plan approved in April 2010. The implementation of revised targets will not impact on budget requirements.

E. Legal implications

There are no legal implications identified.

F. Background papers

• Report 09 - 22 January 2009
  MPA commitment to GLA four year Responsible Procurement plan

G. Contact details

Report authors: Fay Davis, Supplier Diversity and Environmental Manager, MPS

For more information contact:

MPA general: 020 7202 0202
Media enquiries: 020 7202 0217/18

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