APPENDIX 5: FALKIRK COUNCIL case study
A5.1 The Falkirk Approach
It was agreed that management of the community benefit initiatives should be through the Community Regeneration Theme Group of the Falkirk Community Planning Partnership. However, practical responsibility for implementing the strategic objectives rests with a project manager based within the Council's Procurement Services but funded from its regeneration budget. The role of the project manager has been described as:
- to explore the scope and potential for the inclusion of voluntary agreements and contractual clauses with suppliers of goods, works and services;
- to oversee the progress of all the pilot work streams;
- to identify future contract areas for implementation;
- to encourage Community Planning partners and private developers to adopt a similar approach.
Three streams of activity have been identified to implement this approach:
- to embed the requirements in the procurement process;
- to test the legal framework for incorporating Community Benefits into contracts through pilot projects;
- to build the capacity of local SMEs to become suppliers to the Council.
Proposed actions are summarised in the table below:
Table 1 Proposed actions of Falkirk Council
Key Activities aimed at achieving our strategic objectives
How do we spend more locally?
Policy guidance to change procurement behaviour with the Council;
Work with key suppliers to open up the supply chain to SME's;
Engage with SME's to understand and overcome any trading barriers they face
How do we increase the level of local labour?
Policy guidance to change procurement behaviour within the Council; 102
Use of contracts, planning agreements and voluntary conditions;
Undertake supply side activity to provide local labour.
How do we increase the level of youth engagement in work?
Use of voluntary agreements in contracts. 103
How do we decrease the number of long term economically inactive?
Identify opportunities for "real work" placements on Council contracts;
Encourage suppliers to work with excluded groups to fill vacancies.
How do we increase the number of training opportunities?
Use contracts, planning agreements and code of practice.
How do we increase the level of inward investment?
Use contracts to request cooperation in marketing the Council area.
From the above it can be seen that the Scottish Government's CBIP Pilot Programme has stimulated Falkirk Council and its Community Planning partners to re-examine how they can use their financial leverage to increase employment and training opportunities, especially for those experiencing social exclusion. The result is a number of initiatives that include voluntary actions by suppliers and a focus on increasing the capacity of local SMEs to become suppliers to the public sector, as well as the development of pilot 'new procurement' projects.
The first major pilot procurement including targeted recruitment and training is at an advanced stage of the procurement process. This is considered below.
A5.2 Procurement Case Study - Community Schools 2008
Falkirk Council has appointed Gateway Consortium (consisting of Ogilvies, FES Ltd and AL King) to work with itto design, build and provide defined services (a large proportion of the services are being retained by the Council in-house), to four replacement Secondary Schools under a Non Profit Distributing Organisation ( NPDO) framework, (avariant of Public Private Partnership). The construction cost is expected to be in the region of £100 million and the Council is seeking to achieve targeted recruitment and training opportunities in the construction and maintenance of the facilities.
As mentioned above, the community benefit requirements were included from the very earliest stages of the procurement process.
Under this project the PPP contractors are required to actively participate in the economic and social regeneration of the locality of and surrounding the place of delivery for the project. Accordingly, contract performance conditions may relate in particular to social and environmental considerations.
The above is a quote from the additional information section of the OJEU Notice issued by the Council. The wording was taken from the CBIP Toolkit. 104 This was followed up by the following requirement in the Pre-Qualification Questionnaire ( PQQ) issued to all parties who notified interest in response to the OJEU Notice:
The applicant should set out its approach to supporting the Council's Targeted Training and Recruitment Initiative.
All of the short-listed firms responded to this PQQ question.
Finally, the targeted recruitment and training requirements were included in the tender specification using the wording below (31A). This is based on a set of model clauses included in the English equivalent to the CBIP Toolkit 105 amended to suit local conditions and preferences. This approach is helpful because it sits within the model documentation provided to procuring bodies by Government Agencies - so there is no need to seek agreement to amend the Government standard wording - while utilising the leverage that is provided by the main contract to help secure compliance.
Examination of the amendments made by Falkirk Council raises the following observation.
By identifying a target of 52 weeks per £10m in contract value the Council has reduced the target by 90% compared with the original NAPP model. The rationale for the Council's requirements was to reflect the scale, nature and complexity of the project. Delivery within a tight timescale was also an important consideration for the Council: the construction element of the project is to be delivered in 12 to 18 months.
However, the Council's aim was always to maximise the number of training and employment opportunities and discussions to this effect with the contractor have now concluded.
The Targeted Recruitment, Training and Equal opportunities clause within the contract provides for a method statement from the contractor during both the construction and facilities management phases which detail how the contractor aims to achieve and manage the recruitment, training and employment objectives during both phases.
The outcomes detailed below relate specifically to the construction phase of the contract where the method statement provided by the Gateway Consortium agreed to deliver the targeted recruitment and training outcomes as outlined in Table 2 below:
Table 2: Proposed Training and Employment Outcomes
Sub Total weeks
Construction Phase Totalweeks
Post Construction weeks
General Construction Operative ( GCO)
Heat and Vent Apprentice
Full Time Equivalent
Note Full Time Equivalent ( FTE) is 37 hours @ 52 weeks
The method statement provides for the achievement of 27 trainees obtaining a total of 4,056 person weeks of training. The total number of weeks equates to 78 FTEs of which 37.5 FTEs are beyond the anticipated construction period. The targeted training and employment outcomes proposed if fully realised would be well in excess of the minimum contractual requirement of 10 FTEs.
At the time of writing this Report, the Consortium has employed 16 school leavers as Modern Apprentices and 5 unemployed adults from Community Regeneration areas as General Construction Operatives ( GCO).
A5.3 The Supply-side Champion
While support from the Council Policy and Resources Committee and the Falkirk Community Partnership has been important in developing the commitment to the community benefits initiative a key driver for the process of change has been the Council's Employment and Training Unit ( ETU). This has:
- acted as the project champion;
- been able to offer a range of employment and training schemes that will allow developers and contractors to achieve their community benefit commitments without significant additional costs.
The ETU has a budget of £3 million per year of which 43% is Council funding and 57% external funding e.g. contracts with Jobcentre Plus, Scottish Enterprise Forth Valley and European funding. With this funding they run a variety of training and job-search programmes for non-employed Falkirk residents, with between 200 and 300 beneficiaries 'on programme' at any time. Some of these programmes allow them to provide trainees and returners to the labour market 'free on site' to contractors. This reduces the risk to the contractor since the targeted recruits can be on work experience prior to employment, and/or the employer can obtain a wages subsidy that will off-set any additional costs incurred by taking on a new entrant.
It is through the combination of access to contractors via the procurement/client relationship and the services and support that the ETU was able to offer employers that the Council has been successful in securing voluntary commitments to recruit and train ETU beneficiaries from existing contractors.
A5.4 Critical Success Factors
Officers of Falkirk Council have highlighted the following:
- You won't make progress with achieving community benefits through contracts until the client officers and the procurement officers have bought into the concept and really believe in it;
- It is important to get a consistent, corporate, 'business as usual' approach, and not be too reliant on an individual's decision to participate (or decide at what level to participate) or otherwise;
- A good 'supply-side' service is important: this will help win the support of suppliers (they will see that they are not 'on their own' with the commitment) and off-set additional costs, this should be balanced against the Authority taking responsibility for trainee skills;
- It is important to introduce the community benefit provisions at the very earliest stage in a way that will require bidders to take cognisance of them.
A5.5 EXTRACT FROM THE FALKIRK COMMUNITY SCHOOLS PPP TENDER DOCUMENT
31A -TARGETED RECRUITMENT & TRAINING, AND EQUAL OPPORTUNITIES
31A.1.1 The Contractor has provided the Council with a Construction Training and Employment Method Statement (the " Construction Method Statement") detailing how they will aim to achieve and manage the following recruitment, training and employment objectives during theWorks Period:
(a) 52 person-weeks of employment for ten new construction trainees and/or unemployed persons returning to the labour market, who are recruited from a source 106 agreed by the Contractor with the Authority (the " Scheme");
(b) each construction vacancy on the Sites (including those in subcontractor organisations), be advertised in Job Centreplus in the Falkirk Council area and, at the cost of the Authority, in the Falkirk Council Employment and Training Unit (" FCETU");
(c) the application of good equal opportunities recruitment procedures and management practices by the Contractor and subcontractors;
(d) the development of an operating framework to encourage sub-contractor compliance in order to achieve these recruitment, training and employment objectives;
(e) that local 107SME's are offered the opportunity to tender on a level playing field basis for all appropriate packages of the Works; and
(f) the provision of quarterly and cumulative annual (1April to 31 March) monitoring information in respect of the following, thereby evidencing the implementation of the Construction Method Statement:
1. The number of new construction trainees employed in connection with the Works, including their length of employment, gender, postcode district and ethnicorigin
2. Salary costs (including national insurance) incurred in respect of those new construction trainees
3. External training costs in respect of those new construction trainees and, where available, internal training costs in respect of those new construction trainees
4. A register of vacancies advertised in accordance with the requirements of Clause 31A.1.1(b)
5. A register of works packages tendered including the identity of the successful tenderers, as referred to in Clause 31A.1.1(e)
Provided that the Contractor shall not be required to divulge any Personal Data and/or sensitive personal data within the meaning of the DPA.
31A.1.2 108 In the event that the Contractor, in relation to the Works during the Works Period, does not:
(a) provide 520 person-weeks of employment in accordance with the Scheme (in calculating whether 520 person-weeks of employment have been provided, nosingle trainee may count for more than 52 person-weeks), the Contractor shall pay to the Authority within 14 days of written demand the sum of £76 per person-week not so provided;
(b) advertise each construction vacancy in accordance with the provisions of Clause 31A.1.1(b), (other than where the Contractor has given FCETU details of the relevant post and FCETU has failed to advertise the post) the Contractor shall pay to the Authority within 14 days of written demand the sum of £250 per vacancy not so advertised;
(c) provide the quarterly/annual information in accordance with the provisions of Clause 31A.1.1(f), the Contractor shall pay to the Authority within 14 days of written demand the sum of £2,000 per occurrence,
provided that, in each case, the Authority has first served a notice on the Contractor notifying it of its non-compliance with this Clause 31A and the Contractor has failed to rectify that non-compliance within 20 Business Days of such notice and further provided that, in the case of Clause 31A.1.2(c), if the relevant information is provided to the Authority after the Authority has levied the £2,000 charge but within one month of the Authority's written demand relevant to Clause 31A.1.2 (c), that £2,000 charge shall be refunded in full to the Contractor by the Authority within 14 days of written demand.
31A.1.3 The Authority's exclusive and sole remedy in respect of a breach of Clause 31A.1 shall be the payments provided for in Clause 31A.1.2. Notwithstanding the foregoing, the Contractor's maximum liability in terms of this Clause 31A.1 shall be the sum of £50,000 in aggregate.
31A.2.1 The Contractor shall, not less than 26 weeks prior to the first Service Availability Date provide a Facilities Management Training and Employment Method Statement ("the FM Method Statement") detailing how they will aim to achieve and manage the following recruitment, training and employment objectives for roles/staff wholly or substantially engaged in the provision of the Services to the Project Facilities (" the Posts"):
(a) at least 30% of the Posts shall initially be offered in writing to persons from priority groups (as such priority groups are notified by the Authority to the Contractor from time to time) who meet the recruitment criteria set by the FM Contractor, acting reasonably, for the relevant roles/staff and are unemployed and/or returning to the labour market (such persons being hereinafter referred to as " Priority Persons") 109
(b) except where at least 30% of the Posts are, at the relevant time, already filled by persons previously Priority Persons, each vacancy in the Posts shall be advertised in Job Centreplus in the Falkirk Council area and (at the cost of the Authority) in FCETU;
(c) except where at least 30% of the Posts are, at the relevant time, already filled by persons previously Priority Persons, the operation of a guaranteed interview scheme whereby disabled applicants and Priority Persons who meet all of the recruitment criteria for the job, will be guaranteed an interview; 110
(d) the application of good equal opportunities recruitment procedures and management practices during the period of implementation of the FM Method Statement;
(e) the development of an operating framework to encourage sub contractor compliance in order to achieve the recruitment, training and employment objectives;
(f) the use, where reasonably possible, of local SME's 111within the supply chains supporting the provision of the Services together with provision of evidence of such use to the Authority; and
(g) the provision of monitoring information that will provide evidence of the implementation of the FM Method Statement, this to be quarterly from the first Service Availability Date until the end of the second Contract Year and annually thereafter. This information shall be provided to the Authority within four weeks after the completion of the applicable recording period.
31A.2.2 In the event that the Contractor does not during the Operational Services Period in relation to the Posts: 112
(a) initially offer in writing 30% of Posts to Priority Persons in accordance with Clause 31A.2.1(a), the Contactor shall pay to the Authority the sum of £4000 per Post not so offered to Priority Persons;
(b) advertise any relevant vacancy where required by Clause 31A.2.1(b) (other than where the Contractor has given FCETU details of the relevant post and FCETU has failed to advertise that post), the Contractor shall pay to the Authority the sum of £500 per Post not so advertised;
(c) provide a guaranteed interview where required by Clause 31A.2.1(c), the Contractor shall pay to the Authority the sum of £50 per Post in respect of which no such interview is offered;
(d) provide the quarterly/annual information in accordance with Clause 31A.2.1(g), the Contractor shall pay to the Authority the sum of £2000 per occurrence
provided that, in each case, the Authority has first served a notice on the Contractor notifying it of its non-compliance with this Clause 31A and the Contractor has failed to rectify that non-compliance within 20 Business Days of such notice and further provided that, in the case of Clause 31A.2.2(d), if the relevant information is provided to the Authority within one month after the Authority has levied the £2,000 charge, £1,000 of that charge shall be refunded to the Contractor within 14 days of written demand.
31A.2.3 The Authority's exclusive and sole remedy in respect of the breach of Clause 31A.2.1 shall be the payments provided in Clause 31A.2.2.