Community benefits in public procurement

This report presents the findings of a pilot programme which was intended to promote the use of 'community benefit'.


A relatively low level of commitment, despite policy commitments, was reflected in the way these pilots were undertaken. Officers in economic development and regeneration negotiated with procurement officers for theinclusion of the targeted recruitment and training requirements in the procurement for the pilot sites. Appropriate wording was included, but it appears that the procurement officers did not give the matter any priority in the award and management of the contract. Unfortunately, the lead officer for the work (within Economic Development) was transferred to another post early in the pilot process but continued to manage the Community Benefits pilot within the new remit.

Consideration is now being given to whether the Council should be asked to agree a new policy paper providing support for the inclusion of targeted recruitment and training requirements in future works contracts.

A3.1 Homezone Robert Street Contract

This contract was for approximately £1m in streetworks in an area with high levels of deprivation. The procurement officer agreed that it should be a CBIP pilot and included clauses prepared by a consultant to the CBIP programme. This was done with minimal (telephone) discussion between the consultant and the Council officers involved. The clauses were then passed to the Council's contract agents who converted them to the text included below as CBIP Requirements for the Robert Street Contract.

The lack of discussion about the recruitment and training clauses and the 'system' they inserted into the contract may help to explain the lack of engagement with the targeted recruitment and training part of the tender by the contract officers, and the implications for how this element of the contract should be managed.

As can be seen, the requirement was for an Employment and Training Method Statement to be submitted as a part of the tender using the pro-forma provided. This requirement was not complied with by all bidders and it is understood that there was no scoring of the method statements. The result of the procurement process was that a contractor was appointed that had made no prior commitment to the employment and training requirements. Outputs were achieved through direct negotiations between the Council's employment officers and the contractor. This resulted in two long-term unemployed local residents obtaining 18-20 weeks of work experience on site. One of these was then retained by the contractor.

The outcomes were the result of quasi-voluntary action 94 and a commitment to the general principle of giving unemployed people a chance. The matter was raised at site meetings and all parties felt that the outcome was satisfactory: 2 people had jobs out of a workforce that varied between 7 and 20 people: so a 10% target was reached. However, the contractor and the Council's contracting team did not implement the following specific requirements of the contract:

  • time was to be measured in person-weeks not numbers of people;
  • recruits should be employed by the contractor in addition to work placement opportunities (the recruits were on work experience);
  • the contractor had to notify all vacancies to local Job Centres;
  • the contractor had to provide a report setting out key performance indicators at each site meeting.

It is estimated that had the recruits been employed on the contract, they would have contributed 5.7% of the total labour time required to deliver the contract. 95

A3.2 Pottery Street

The second Inverclyde pilot contract also related to streetworks. These were on a redevelopment site that the Council was preparing for the market. This was the subject of an OJEU Notice and PQQ process in 2003 (before the CBIP Pilot Programme commenced) that made no reference to employment and training requirements. The contract had a value of £839,000.

The Bill of Quantities for the works included a section entitled "Compliance with Employer's Targeted Training & Recruitment Programme - Partnering Agreement" that comprised:

  • details of the Council's objectives in promoting 'well-being' and combating social exclusion;
  • a requirement that all vacancies be advertised in the Port Glasgow area (a contact at the Job Centre was given);
  • a requirement that a site security system be adopted that would record data on people engaged on the site;
  • a disclaimer similar to that in 1.4 of Appendix 1;
  • a requirement that tenderers submit a Method Statement with their tender showing how they will implement the above;
  • a requirement that data on recruitment be reported to the Council or their agent four-weekly in a format to be agreed with the Council;
  • a requirement that the cost of delivering the Method Statement be identified in the Preliminaries Bill, including a breakdown of how this was calculated.

The key difference between these requirements and those for Homezone was the absence of targets for new entrant trainees and work placement opportunities, and that the Council did not provide a pro-forma Method Statement to ensure that all bidders provided the same types of information. This may have been because this was a partnering contract and the goodwill of the contractor was expected to maximise the outcomes.

It appears that all of the bidders did submit a Method Statement and that all submitted a zero cost for the targeted recruitment and training elements. It is understood that this was because they were told that additional costs would be met from employability budgets. In terms of securing VfM, it was not appropriate to make this commitment.

The Method Statements were assessed by the independent consultants that were advising the Council on the procurement. Their tender assessment notes that the preferred contractor merely included their Equal Opportunities Statement in response to the requirement to submit a Method Statement and the consultants ask the Council to "advise if this does not satisfy the requirements of the Inverclyde Council Targeted Training Programme". Itappears that this response - that is unlikely to have satisfied the above requirements - was not contested.

Minutes of the Site Meetings for the contract show that the employment and training matters were raised at each meeting and through this the contractor was encouraged to meet with a Council employment team member. The minutes of the site meeting eight months after the contract started notes that two work-placement trainees had been recruited with the intention of offering them employment at the end of their work experience. The reason for the delay in taking these recruits appears to have been the specialist nature of the early works that included the removal of a lot of contaminated material. There is no evidence that data on the people engaged on site was ever presented to a site meeting.

A3.3 Conclusions

The Inverclyde pilots demonstrate the dangers of seeking to implement a CBIP approach without sufficient understanding and commitment from the officers and consultants involved, and without an 'employment champion' that has the time and backing to ensure that the requirements are implemented. 96

The outcome from the two pilots - 4 work placements for long-term unemployed people employed by Inverclyde Community Development Trust on an 'intermediate labour market scheme' - are considered good. It seems that three of these beneficiaries obtained permanent employment with the contractor, which is a very positive and probably life-changing outcome for these individuals.

A positive outcome is that the Council has included targeted recruitment and training requirements in one additional contract (that is held up awaiting funding) and has included a requirement to include 12 trainees on another contract that has been let in conjunction with British Waterways. At the time of writing, six work-placement opportunities have been provided for long-term unemployed people obtained from the Inverclyde Community Development Trust ( CRT), and five of these have since been employed by the contractor. It has enabled the Council to better achieve their Economic Development Strategy commitments.

Inverclyde Council is currently reviewing the scope for using Community Benefit clauses in its schools development programme. External funding has been obtained via the Community Planning Partnership for the engagement of a "construction intermediary" to support contract officers and link construction contractors and training providers.

Community benefits from construction represent a major challenge and opportunity for Inverclyde over the next decade. Major investments are planned and it is vital to ensure these generate a high volume of opportunities for disadvantaged residents.

Staff within the local authority are working to link opportunity to need, developing formal linkages between supply and demand in the labour market. As a result of lessons learned from the pilot programme, community benefits have become integral to the new schools construction programme and discussions are ongoing with the Riverside Inverclyde Urban Regeneration Company and Riverclyde Homes. There are plans to recruit a dedicated "champion" of community benefits.

A3.4 extract from inverclyde tender documentation


Extracts from APPENDIX 1/25: Training and Recruitment Requirements

1. It is the intention of Inverclyde Council in accordance with its aims to combat social exclusion and deprivation within Inverclyde by promoting opportunities for vocational training, education and employment for long term unemployed. The Contractor must be able to demonstrate its intention to integrate trainees and long term unemployed persons into the labour market without distinction of sex, marital status, race, ethnic origin or political or religious beliefs.

2. Inverclyde Council also specifically wishes to encourage and intends to support the education and training of young people in order that they can be equipped to work successfully in the building and construction industries. The Contractor is therefore encouraged to recruit and train such young people.

3. It is the intention of Inverclyde Council that all vacancies on the site (including those of the Contractor and all sub-contractors) should be filled through a recruitment process that accords with best equal opportunities practices.

4. The Contractor is required to operate a site security system that records the following data for each person engaged on site in any capacity:

  • The full post code of their home address (rather than a local accommodation address);
  • Their gender;
  • Their ethnic origin (using categories provided by the Employer 97 or their Agent);
  • If they are registered on a training programme; and
  • Whether they were employed for over 25 weeks or engaged on a full time training programme (12 hours per week or more) immediately prior to engagement on site.

A summary of this data must be provided to Inverclyde Council or their Agent, in the format they request, on a weekly basis, not more than one week after the completion of the recording period.

The above information is required for Inverclyde Council as this project is subject to external audit by the third party European funding sources. This information is part of the basis for the grant funding of the project and requires to be addressed by Inverclyde Council and the successful Contractor.

5. The performance of the Contractor in relation to training and recruitment will be an item on the agenda of each Employer's site meeting.

6. The inclusion of employment and training requirements does not comprise or imply any promise on the part of the Employer or their agents to provide suitable labour/firms. Any action taken by the Employer to broker relationships between the Contractor and local individuals/firms/ agencies does not imply and should not be deemed to imply and should not be deemed to imply that the Employer or their agents consider the individual/firm/ agency as suitable for engagement by the Contractor. Within this context the Employer will work with local agencies to help facilitate the achievement of the employment and training elements of this specification.

7. Tenderers shall submit a Method statement or Service delivery plan with their tender showing how they will implement each of the above objectives, including management and monitoring arrangements. 98

8. The Contractor is required to provide a cost (after allowing for potential grant income from the CITB and other sources) for implementing service delivery plan or method statement relating to the Employers requirements on employment, training and equal opportunities, including a breakdown of the price between management/administration, training costs, and any wages subsidy element relating to the engagement of operatives who are not yet fully productive. The basis of calculation for each element must be provided. This figure will be used to calculate a provisional sum for training and employment to be included in the contract in series 100 of the Bill of Quantities.



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