Final Project Report to Defra Sustainable Procurement Task Force Secretariat

Pilot OpenStrategy® for Sustainable Procurement in the North West

Prepared by:

Matthew Wilkinson Sustainable Development Policy Team North West Regional Assembly Wigan Investment Centre Waterside Drive Wigan WN3 5BA Tel: 01942 776724 [email protected]

Executive Summary

This is the final project report of the Pilot phase of the OpenStrategy® (OS) for sustainable procurement in the North West. This has been funded jointly by Defra’s Sustainable Procurement Task Force (SPTF) Secretariat, North West Regional Assembly (NWRA) and Northwest Regional Development Agency (NWDA). In August 2005, these organisations embarked on a project to provide a basis for a sustainable procurement strategy for the North West using the OpenStrategy® technique. This document is complemented by an Independent Evaluation Report of the OS technique by Forum for the Future (Forum), using this pilot as the primary case study, whilst also drawing upon other applications across the country. The report is available from the Forum for the Future website1.

The overall aims of this project were to pilot the OS technique and, in the process, work towards the development of a sustainable procurement strategy for the North West region. A total of 11 stakeholders were engaged with this process and the pilot was supported over a period from the end of September 2005 to May 2006.

This pilot has shown that sustainable procurement is extremely wide-ranging with implications and impacts of good and bad practice being experienced in many different areas of society. The benefits of sustainable procurement practice to wider society relate strongly to: economic development, more efficient resource use, improved health, reduced poverty and better environmental quality. The activities in which mainly public sector stakeholders are currently engaged include, broadly speaking, the development of guidance, provision of information and addressing skills needs.

Using the OS system has demonstrated that the public authorities tend to be almost exclusively involved in running projects that produce results. The vital next step – the application of the results – is carried out by the suppliers which, in turn, generate benefits to wider society. This shows that, if the government and public authorities are serious about supporting and promoting good practice as widely as possible, their attentions should include creating and supporting markets for sustainably produced goods and services, and in building capacity within the private sector to deliver this.

Forum’s independent evaluation of the OpenStrategies system points out that resource constraints around stakeholder capacity, availability and authority are issues remaining must be resolved to ensure success. Certain aspects of the OS system have not been used to their fullest extent. Forum concludes that this shows that careful consideration must be given to resource availability and endorsement for the technique to give the support required to ensure an OS approach to a strategic planning situation will succeed.

The stakeholders of this pilot OpenStategy agreed that there is a recognisable need for strategic direction to address procurement practice in the North West and that OpenStrategy is the mechanism by which it can be delivered. The findings of Forum’s independent evaluation and stakeholder experience has shown the that most important issues that must be in place for success are that: (1) sufficient time and resources are available for training facilitators and stakeholders; and (2) senior level (chief executive officer) staff members give endorsement to both the need for a Sustainable Procurement strategy for the North West,

1 Forum for the Future (June 2006) An evaluation of OpenStrategy®: the Sustainable Procurement North West Pilot. Forum for the Future, Cheltenham. URL: http://www.forumforthefuture.org.uk/publications/openstrategy_page408.aspx 2 http://openstrategies.co.uk/

Pilot OpenStrategy® for Sustainable Procurement in the North West - Final Report. Page 1 agreement that the OpenStrategy is the mechanism by which it should be delivered, and that they engage actively in delivery by means of the technique.

Officers of the NWRA are now working on engaging senior level officers to gain support and agreement about what is required and possible. This will ensure that what emerges in the next stage, as a result of this pilot exercise, is both sufficiently resourced, realistic, and supported by strong leadership.

Pilot OpenStrategy® for Sustainable Procurement in the North West - Final Report. Page 2

Table of contents

Executive Summary...... 1 Table of contents ...... 3 1 Introduction ...... 4 2 Background...... 4 3 Pilot aims and objectives...... 4 4 What is OpenStrategy® and how does it work?...... 5 4.1 The Information Structure ...... 5 4.2 The Prioritisation System ...... 6 4.3 Support Systems ...... 7 5 North West Stakeholder involvement...... 7 6 Summary of process ...... 7 7 Survey of goods and services suppliers...... 8 8 Key Findings ...... 9 8.1 Existing NW projects and activities ...... 10 Development of Codes/Guidelines/Policies ...... 10 Promotion and marketing ...... 10 Research and sharing best practice...... 10 Training, capacity building and supply chain support...... 11 8.2 Benefits identified ...... 11 THEME 1: Health and Poverty ...... 11 THEME 2: Economic Development...... 11 THEME 3: Resource Use ...... 12 THEME 4: Environmental quality ...... 12 THEME 5: Better governance ...... 12 9 Conclusions and the Future ...... 12 9.1 Sustainable procurement practice in the NW ...... 13 9.2 OpenStrategy as a method for implementing strategic planning sustainable procurement...... 13 9.3 Towards the development of a NW Sustainable Procurement Strategy...... 14 9.4 Concluding remarks and the wider context ...... 15 Appendix 1: Projects listed in the Pilot NW OpenStrategy for Sustainable Procurement ...... 16 Appendix 2: Benefits of Sustainable Procurement as listed in the Pilot NW OpenStrategy for Sustainable Procurement...... 17 Appendix 3 – Suppliers Survey...... 18 Appendix 4 – Clean Merseyside Centre’s Buy Recycled Code Sub-Strategy ...... 21 Appendix 5 – Envirolink Northwest’s Environmental Technologies Support Sub-Strategy ...... 22 Appendix 6 – NWDA Sustainable Construction Policy Sub-Strategy...... 23 Appendix 7 – Groundwork Environmental Business Service NW NHS Suppliers Bureau Sub-Strategy ...... 24 Appendix 8 – Defra Sustainable Procurement Task Force Sub-Strategy...... 25

Pilot OpenStrategy® for Sustainable Procurement in the North West - Final Report. Page 3 1 Introduction

This report provides the final project report of the Pilot phase of the OpenStrategy® (OS) for Sustainable Procurement (SP) in the North West. This has been funded jointly by Defra’s Sustainable Procurement Task Force (SPTF) Secretariat, North West Regional Assembly (NWRA) and Northwest Regional Development Agency (NWDA). In August 2005, these organisations embarked on a project to provide a basis for a sustainable procurement strategy for the North West using the OpenStrategy® technique. As an agreed condition of funding from Defra SPTF, this document provides the final report of this project, and is complemented by an Independent Evaluation Report3 of the OS technique by Forum for the Future (Forum), using this pilot the primary case study, whilst also drawing upon other applications across the country.

2 Background

Discussions on the idea to trial the OS strategy technique in the North West commenced in early 2005 when staff of the NWRA Sustainable Development Policy Team became aware of it and the potential OS has to offer in the arena of regional governance. The lead regional body on sustainability in the North West - the Action for Sustainability Management Board (AMB) and its Technical Advisory Group (TAG) - gave their endorsement to test the technique in how it could be used in the implementation of the NW Regional Sustainable Development Framework (AfS).

Sustainable Procurement (SP) was chosen as the subject for this pilot as it is currently an important issue in the sustainability debate. As a definable area of activity, it makes a significant contribution to the issue of sustainable consumption and production (SCP), which is identified both as a national priority in Securing the Future –UK Government sustainable development strategy4 and as a regional priority in the North West Regional Sustainable Development Framework: Action for Sustainability5. SCP has also been taken up in the region’s Regional Economic Strategy6 where it is identified as a key social and environmental outcome. It will also help to build on the work that is currently being delivered both nationally through Defra’s Sustainable Procurement Task Force (Defra SPTF) and by a range of organisations in the North West.

3 Pilot aims and objectives

The overall aims of this project were to pilot the OS technique and, in the process, work towards the development of a sustainable procurement strategy for the North West region. More specifically, these aims can be broken down into five objectives, which were to:

1. evaluate OS as a method for implementing the regional sustainable development framework, Action for Sustainability (AfS) and other areas of strategic planning; 2. contribute to the development of the UK Action Plan on sustainable procurement; 3. improve sustainable procurement practice in the NW; 4. take the first steps towards the development of a NW Sustainable Procurement Strategy; and 5. contribute to best practice in strategic planning and sustainable procurement.

3 Forum for the Future (June 2006) An evaluation of OpenStrategy®: the Sustainable Procurement North West Pilot. Forum for the Future, Cheltenham. URL: http://www.forumforthefuture.org.uk/publications/openstrategy_page408.aspx 4 Defra (2005) Securing the Future –UK Government sustainable development strategy. HM Government. http://www.sustainable-development.gov.uk/publications/uk-strategy/index.htm 5 Action for Sustainability is currently in the process of being superseded by a North West Integrated Regional Framework, which is under development at the present time and expected to be adopted in Autumn 2006. 6 Northwest Regional Economic Strategy 2006: http://nwda.co.uk/res

Pilot OpenStrategy® for Sustainable Procurement in the North West - Final Report. Page 4

4 What is OpenStrategy® and how does it work?

The OpenStrategy® (OS) system offers a new and innovative approach to multiple stakeholder associations that enables the processes of communication, negotiation, prioritisation and agreement. It is specifically designed to facilitate these processes in partnerships where large numbers of organisations reside. It enables and facilitates the delivery of more effective outcomes by means of a web-based tool that allows stakeholders to work together in a collaborative, transparent, and strategic manner. Box 1 Box 1: OpenStrategy is based on the following principles, and summarises the underlying assumptions and incorporates them into the OpenStrategy system and web- principles on which the OpenStrategies system is tool: based. Communities are intelligently complex, not chaotic. Therefore, they do not require top-down management, The OS system is comprised of three main and given the right tools can plan their own future in a elements: an information structure, a system of collaborative, transparent, and strategic manner. prioritisation and support systems. The An effective strategic planning tool needs to be open - to information structure provides a framework in new ideas, to people, to time, space, growth, and change which participants can organise the essential Anyone can join an OpenStrategy, and no-one can take information about their activities and how they control of it relate or contribute to the overall outcomes of the An effective strategic planning tool needs a common plan, strategy or scheme in question. The system and language prioritisation system enables this essential An effective strategic planning tool needs to be actions information to be distilled and summarised into and results oriented smaller strategies that can be understood more Communities and groups of individuals can successfully easily by all the members of the partnership. collaborate on large-scale projects following a diverse cluster of motivational drives and social signals - to More extensive information and a fuller review and select which resources to work on, for which explanation of the technique and its underlying projects, and with which collaborators philosophy is available on the OpenStrategies 7 8 website and from the OpenStrategy Book . Source: http://openstrategies.co.uk/how.php

4.1 The Information Structure

The OS works by requiring Figure 1: OpenStrategy core information structure stakeholders to describe their activities using only four essential pieces information: projects, results (outputs), uses/applications and benefits (outcomes). See Figure 1. While most public sector bodies work Projects Results Uses / Benefits Applications in running projects that produce results, it is the wider community that uses or applies the results of these activities and, in turn, benefits to Source: http://openstrategies.co.uk/how.php wider society are created. The ‘handover’ illustrates the change of ownership from public authorities to the wider community.

7 http://openstrategies.co.uk/ 8 Phil Driver & David Armstrong (2004) OpenStrategy Liberating Collective Wisdom. Hazard Press, Christchurch, NZ.

Pilot OpenStrategy® for Sustainable Procurement in the North West - Final Report. Page 5 As stakeholders add more information Figure 2: OpenStrategy information structure on their activities, the OS system builds into a matrix of activities and outcomes (refer to Figure 2). Stakeholders are then able to propose that associations exist between the information boxes. That is to say they judge that an item (e.g. project) affects, positively or negatively, another item, i.e. produces a desirable or undesirable result / output.

Different stakeholders are free to agree that a link exists, or reject it if they believe it not to be the case.

Source: http://openstrategies.co.uk/how.php

Stakeholders can then distil out Figure 3: OpenStrategy and its substrategies essential information that they may be interested in as SubStrategies, which are smaller strategies that exist in one form or another within the full OpenStrategy. SubStrategies are be created by stakeholders and enable them to focus on their own areas of interest, whatever they may be. Figure 3 shows the differently shaded areas representing two SubStrategies within a single OS system.

This ability to search the system, distil and summarise also offers the opportunity to identify similar initiatives and link between them to improve efficiency of delivery, avoid The organisations referred to in this diagram are fictitious and for duplication and identify gaps. presentational purposes only.

Source: http://openstrategies.co.uk/how.php

4.2 The Prioritisation System The prioritisation system enables stakeholders to indicate to Figure 4: OpenStrategy ratings system other stakeholders how important they think any item in the OS system is, based on whatever conditions or principles Ratings: Build a New they may have. It enables them to express whether they Cycleway to Central City think an item is important or of interest to them and their organisation’s work. It also enables stakeholders to register Health Board +2 their disapproval. Environment Council +5 Business Association -3 Figure 4 shows how different stakeholders could view a Central Government 0 proposed project, in this case a cycleway. Education Department -2 Traffic Department +2

The organisations referred to in this diagram are fictitious and for presentational purposes only.

Source: http://openstrategies.co.uk/how.php

Pilot OpenStrategy® for Sustainable Procurement in the North West - Final Report. Page 6 4.3 Support Systems OpenStrategy is supported by conventional communication practices and requires workshops and meetings as well as emails and telephone calls. OpenStrategy does not replace these normal systems, instead it provides a format in which the essential content of these communications can be captured and used effectively. It also enables a much larger and therefore broader range of stakeholder involvement – a key part to running an effective and manageable participation process. While this greater breadth of involvement can be accommodated, it also recognises that not everyone will be interested in everything. In other words, it allows efforts to be focused and for the right people to come to the table for any discussions.

5 North West Stakeholder involvement

A total of eleven NW stakeholders and Defra’s Sustainable Procurement Task Force have been engaged with the process. These include:

• Centre for Construction Innovation (CCINW) • Clean Merseyside Centre (CMC) • Community Recycling Network North West (CRN) • Envirolink Northwest (ENVIROLINK) • Government Office for the North West (GONW)* • Groundwork Wirral (GRNDWK) • North West Centre of Excellence (NWCE) • North West Community Waste Network (CWNNW)* • North West Development Agency (NWDA) • North West Regional Assembly (NWRA) • North West Food Alliance (NWFA)

* GONW and CRN were engaged late on in the process and so have not had the chance to contribute substantially to the process. However, both stakeholder representatives have confirmed that they are committed to the process and continue to contribute as full stakeholders in the OS. This can be accommodated by the system, since a principle of OpenStrategy is that stakeholders can join at any time. Strategy can therefore be developed dynamically and on an on-going basis.

Over the period of the pilot, a total of 162 boxes of information have been filled throughout the OS system and these are as follows:

Projects = 51 Results/Output = 49 Uses = 24 Benefits/outcomes = 38

6 Summary of process

The pilot commenced with start up workshops held at the end of September 2005. Table 1 presents a summary process of events that took place during the course of the pilot OpenStrategy.

Table 1: Summary of Pilot NW Sustainable Procurement OpenStrategy process

Time Event End of Sept Start up workshops lead by OpenStrategy UK staff: 2005 Training of NWRA facilitators Inception meeting for NWRA stakeholders which included: NWDA, Envirolink Northwest, NWCE, NWRA. Oct 05 Individual meetings with stakeholders Groundwork Wirral engaged as a stakeholder

Pilot OpenStrategy® for Sustainable Procurement in the North West - Final Report. Page 7 Table 1: Summary of Pilot NW Sustainable Procurement OpenStrategy process

Time Event Nov 05 Individual meetings/workshops with stakeholders CCINW engaged as a stakeholder Dec 05 Individual meetings/workshops with stakeholders Progress Report submitted to Defra SPTF Facilitators meet with OpenStrategies staff Meeting with Defra SPTF representatives and NWRA Jan 06 Individual meetings/workshops with stakeholders Facilitators meet with OpenStrategies staff Feb 06 OpenStrategy workshop held with stakeholders and OpenStrategy staff: Defra SPTF, Groundwork, NWCE, NWRA, Envirolink. Facilitators meet with OpenStrategies staff Mar 06 Individual meetings/workshops with stakeholders Forum for the Future conduct stakeholder interviews Apr 06 Individual meetings/workshops with stakeholders

May 06 End of pilot workshop held for stakeholders, OpenStrategy staff and Forum for the Future – stakeholders agree to continue work on developing a NW regional strategy on sustainable procurement and to use OpenStrategy as the method of delivery. Preliminary findings report circulated to stakeholders. Pilot NW OpenStrategy ends. June 06 End of project report completed and submitted to Defra SPTF Forum for the Future independent evaluation report published and also submitted to Defra SPTF

7 Survey of goods and services suppliers

During the course of the pilot OpenStrategy, a decision was made to carry out a targeted survey of suppliers. The OS system had demonstrated this gap in thinking through its information structure in that it illustrated the need to understand the important role played by the suppliers in delivering benefits to society. The survey helped with two issues:

Firstly because of the lack of suppliers within the Stakeholder group. This was acknowledged as being a shortcoming within the membership of the system and, although moves were made to rectify this by inviting representative organisations such as Envirolink and CCINW, it was felt that the views of the suppliers were still not sufficiently represented within the OS system. Secondly, members of the Defra SPTF required hard- hitting examples of where the public sector had missed out on achieving sustainability gains through not engaging with organisations capable of supplying sustainable goods or services.

The suppliers’ survey was conducted by members of the NWRA facilitation team by means of short telephone interviews targeted at organisations known to be providing goods and services of a sustainable procurement nature. Summaries of the findings are presented in Table 2 and full copies of the interview notes are available in Appendix 3.

Pilot OpenStrategy® for Sustainable Procurement in the North West - Final Report. Page 8

Table 2: Summary of findings from Suppliers Survey

Case study Type of service and Sustainable Procurement benefits identified by suppliers Supplier Councils allowing waste to Waste and productions Reduced travel for waste products be exported rather than from recycled materials Reduction in exporting waste used as a resource for Using waste streams to create UK jobs business growth in their Centriforce Products Ltd, Diversion from landfill localities. Liverpool Good for small and micro-enterprises - businesses that are supplied by waste reprocessors are good job creators

Lack of opportunities for Local food procurement Fair prices to farmers and small scale producers supplying to public sector High farm standards – animal welfare and environmental Lakes Speciality Foods, care Cumbria Food miles saved Supports regional and local economy Regional marketing and image Health benefits of quality food consumption (diet, nutrition)

Social Enterprise looses Waste Management and Waste minimisation, re-use and recycling of waste contract to conventional Recycling Local employment opportunities and training for the long- service supplier term unemployed EMERGE, Manchester Promotion of neighbourhood participation in sustainable recycling – provides incentives for residents to recycle (as and it creates local jobs) Contribution to local economic development through Energywise Recycling social enterprise Ltd, Liverpool Reduced environmental impact of waste management services, as the enterprise is based on sustainable development principles and operates to high standards of environmental care Health benefits of sustainable waste management and employment Increased education and awareness through additional schools projects Innovative waste solutions and flexibility

8 Key Findings

We will begin by focusing on the projects/activities identified and listed in the OS system and the benefits/outcomes identified by the stakeholders. These findings will also be supported with results from the suppliers’ survey, as discussed in Section 7.

Since this is a pilot project, certain aspects of the OS system have not yet been tested or utilised in full. These include making greater use of the substrategy facility, forming links between items, and limited use has been made of the rating system for prioritising projects.

Furthermore, and as noted in Forum for the Future’s Independent Evaluation, achieving consistency in the way that projects, results, uses and benefits are described in the OpenStrategy has been challenging for the stakeholders. Applying the traditional way of developing strategy that the stakeholders were used to has meant that the contents of some of the boxes are incorrectly placed. In most cases, this has occurred within the benefits column where items are, in fact, results. While these traditional mindset approaches in the OS system can limit the quality of communication between stakeholders, they can normally be relatively easily

Pilot OpenStrategy® for Sustainable Procurement in the North West - Final Report. Page 9 rectified by consultation with the stakeholder involved. In the case of this OS, lack of time availability from the stakeholders has prevented the facilitators carrying this out thoroughly and, if further funding is successfully secured to enable a full OS to be rolled out in the North West, correction of these inconsistencies will be undertaken at the outset.

However, with these inconsistencies in mind, it is still possible to gain some useful general impressions of Sustainable Procurement in the North West and some of the important issues surrounding it. These are described in the following two sections which focus on the projects currently underway and the benefits that have been identified.

8.1 Existing NW projects and activities This resulting pilot OS identifies 51 projects existing or suggested, covering a wide range of subjects (see Appendix 1 for a complete list as they appear in the OS system or log on to the OpenStrategy system for read-only viewing9). It shows the highly diverse range of activities currently being undertaken or considered by the 11 stakeholders. Some broad categories of projects have been identified, as follows:

Development of Codes/Guidelines/Policies Several of the stakeholders are involved in the production of codes and guidelines. These include the 'Buy Recycled Code' being delivered by CMC (see substrategy in Appendix 4), which is aimed at both public and private sector organisations. When signed up to the Code, organisations receive free technical advice, support and information on the benefits and opportunities available to their organisation through specifying and buying recycled products. CCINW is involved in the development of a 'Sustainable Construction Policy' (see Appendix 6 for more detail) for the NWDA, which relates to NWDA funded projects but also has potential as a region-wide policy tool.

Promotion and marketing CCINW is running a marketing and implementation plan for the NWDA's Sustainable Construction Policy, which includes sustainable procurement, and is designed to progress awareness and use of the policy to NWDA members and beyond. NWFA provides a weekly e-bulletin to its members to market UK and EU tenders. Envirolink's supply chain directories (Wind; Water and Wastewater; Contaminated Land Remediation) are designed to promote NW Environmental Technology companies and enhance the profile of the sector and the region. More detail on this range of activities is available in Appendix 6.

Research and sharing best practice NWCE is supporting three research projects designed to provide essential information to Local Authority officers. The first is the Tender Threshold Research Project which looks at whether a regional tender threshold should be proposed consistently across the NW, or whether individual council thresholds be raised to encourage SMEs to tender for contracts. A Purchase Spend Analysis project is currently underway and will be rolled out across the NW to provide an 'economic footprint' of the region to understand the impact of the region’s spending. The third is the Price Benchmarking Pilot Project which looks to compare the prices paid for a range of commonly procured low value items across 10-12 authorities within the North West. Price comparisons will then be made between the sampled local authorities and prices paid by other public and private sector organisations. It is hoped that savings will be identified and achieved, perhaps by collaborative procurement.

Groundwork is also active in this field with their sharing of best practice across the EU through ‘Healthclusternet’. This enables the identification of good practice within the health sector to benefit the local economy and contribute to a healthy region.

9 Full details of all the projects and other activities in the OS system are available for viewing by non-stakeholders by means of read-only usernames and passwords. Interested parties should contact the NWRA Sustainable Development Team or OpenStrategies UK for help with this. Contact details for NWRA Sustainable Development Team: [email protected] or tel: 01942 776724. Contact details for OpenStrategies (UK) Ltd are available here: http://openstrategies.co.uk/contact.php

Pilot OpenStrategy® for Sustainable Procurement in the North West - Final Report. Page 10 Training, capacity building and supply chain support Groundwork Business Support is responsible for funding and setting up the NW NHS Bureau which works to develop a support programme for SMEs in the North West by increasing awareness and capacity to tender and supply the NHS (See Appendix 7 for more detail as a sub-strategy). CCINW has suggested a project to increase skills in sustainable construction amongst SMEs.

NWCE has also run a series of workshops in conjunction with the IDeA around the new EU Procurement Rules which came into force at the end of January 2006. The NWFA has held seminars, training programmes, and meet-the-buyer events for organic farmers to aid them in tendering for public sector contracts. CCINW is also supporting supply chain development with a view to promotion within business clusters rather than within a specific sector. This means working with the network of businesses associated with a particular production process, rather than focusing narrowly on all firms or companies of a particular type. This is being supported by the Envirolink supply chain directories.

8.2 Benefits identified

A total of 38 benefits have been identified and listed within the existing OS system (see Appendix 2 for full list). As mentioned earlier, it is important to acknowledge at this stage, that some of the benefits listed are not actually benefits to society as a whole, which is a critical element of the OS paradigm. In the OS system, benefits are understood as being observed outcomes, which result in an enhanced sense of well-being or quality of life for the members of a community, organisations within the community, or for the community / environment itself. For example these might include a stronger economy, healthier citizens, increased revenue for industry, and/or cleaner neighbourhoods.

However, provided these inconsistencies caused by traditional mindset thinking are acknowledged, it is possible to identify broad themes that enable us to understand the outcomes of good sustainable procurement practice that are benefits to society. These themes are summarised below with errors indicated with an asterisk (*), which can be adapted in consultation with the appropriate stakeholders.

THEME 1: Health and Poverty Some of the benefits listed in the OS system can be related to the three UK Sustainable Development Indicators; Employment and Poverty, Health, and Mobility and Access.

• Decrease in fuel poverty • Healthier and better performing students and workforce • Healthier staff through reduced risk of injury • Reduced hospital stays* • Reduced strain on the NHS due to fewer accidents/incidents in the workplace*

THEME 2: Economic Development Economic development is reflected in a range of the Employment and Poverty UK Sustainable Development Indicators. The OpenStrategy represents these as follows:

• Greater profits for NW companies providing sustainable products and services • Increased supplier competition* • Informed local economy decisions can be made* • More competitive small and medium sized suppliers • More sustainable UK rural local economies • North West recycling and reprocessing economy supported* • Stronger North West local economies

Pilot OpenStrategy® for Sustainable Procurement in the North West - Final Report. Page 11 THEME 3: Resource Use Resource use is reflected in two UK Sustainable Development Indicators; Reduction of Resource Use and Reduction of Greenhouse Gas Emissions. These are reflected in the OS as:

• Closer integration of resource allocation and sustainable development objectives* • Commitment to Sustainable Procurement from the highest levels of Government* • Decreased water consumption • Improved procurement practices within local authorities* • Landfill capacity saved • North West recycling and reprocessing economy supported • Protection of our natural resources and enhancement of the environment • Reduced CO2 emissions for the Region • Savings from waste minimisation

THEME 4: Environmental quality A significant number of the benefits identified were associated with environment quality in its widest sense, including regional image and quality of life in our towns and cities and in our rural areas. It demonstrates the breadth and depth of how the benefits can range in a subject that tends to be focused on service delivery and improving local economies.

• Civic pride in local built environment • Flourishing countryside • A more sustainable environment • Improved animal welfare

This is an important agenda in several other areas, one of which is the government programme on ‘cleaner, safer, greener’ topics to address issues such as local environmental conditions in neighbourhoods, crime and green spaces.

THEME 5: Better governance Stakeholders of this OS are aware of the importance of sound governance and have focussed on this as a distinct benefit. However, this is not strictly a benefit but an output and should normally be represented as such. This would then provide an application or use leading to a benefit to wider society. This is included here to show that it is acknowledged as an important subject, though it should not be defined as a benefit, rather an output in the micro level actions and results.

• Closer integration of resource allocation and sustainable development objectives* • Commitment to Sustainable Procurement from the Highest levels of Government * • Improved procurement practices within local authorities* • Increased collaborative working* • Local authorities less likely to be subject to legal challenge*

As discussed above, while these are listed as benefits within the OpenStrategy, it is perhaps more accurate that they should be represented as outputs or results. Subjects being reflected here as benefits is perhaps a reflection of the make up of the stakeholders, which to date has been largely public sector. If developed further, the OpenStrategy would need to revisit these and either rephrase or redefine them or move them to the results section. This is an important aspect of overcoming the perception within parts of the public sector that certain activities lead directly to societal benefits and the practice of assuming benefits lead directly from the outputs of projects.

9 Conclusions and the Future

The aims and objectives of this pilot project (see section 3) can be summarised as follows: • to gain knowledge of and make recommendations for sustainable procurement practice; and • to evaluate the OS system

Pilot OpenStrategy® for Sustainable Procurement in the North West - Final Report. Page 12

These points, as well as the question of ‘what next?’, are addressed in the following sections.

9.1 Sustainable procurement practice in the NW

This pilot has shown that, even with a relatively small number of stakeholders, sustainable procurement is extremely wide-ranging with implications and impacts of good and bad practice being experienced in many different areas of society. The benefits identified as being influenced by this practice are wide ranging and relate strongly to economic development, resource use, health, poverty and environmental quality.

The activities with which stakeholders are currently engaged include, broadly speaking, the development of guidance, provision of information and addressing skills needs. While these are important activities, they alone are not sufficient. The framework provided by the OS system enabled us to understand the importance of involving and engaging suppliers in order to gain a full picture of this important subject. It has demonstrated that the public authorities tend to be almost exclusively involved in running projects that produce results. The vital next step – the application of the result – is carried out by the suppliers which then generate benefits to wider society.

This study has shown that sustainable procurement presents its own unique challenges with regard to the sustainability agenda. Whilst on the purchasing side the public authorities can raise awareness and build capacity amongst procurement officers, the benefits to society are often delivered down the supply chain through more efficient and sustainable practices in the extraction, manufacture and disposal phases of a commodities life cycle. These benefits are produced as a result of these largely private sector organisations producing and providing their services in a manner which stimulates sustainable economic growth whilst retaining the principles of value for money, and minimises adverse social and environmental impacts.

This shows that, if the government and public authorities are serious about supporting and promoting good practice as widely as possible, their attentions should include creating and supporting markets for sustainably produced goods and services, and in building capacity within the private sector to deliver this.

9.2 OpenStrategy as a method for implementing strategic planning sustainable procurement

This section is largely informed by Forum’s Independent Evaluation, which accompanies this report. It has provided an invaluable expert outsider’s view of the OpenStrategies as a technique for strategic planning using this pilot project as a primary case study, whilst also drawing on the experiences of stakeholders involved in other OS projects in other parts of the UK.

Since this has been a pilot study, the time given for testing the OS systems was relatively short. Initially the pilot period was intended to be 4 months and OpenStrategy (UK) Ltd agreed to extend this during the course of the project in order to accommodate the need to address issues around stakeholder time, capacity and other resource availability. The experience gained in this pilot exercise and supported by Forum’s report has shown that further issues remain which can only be addressed if the system is explored more fully.

The short pilot period meant that certain aspects of the OS system have not been used to its fullest extent. Forum concludes that insufficient time and resources has meant that this pilot has not yet been able to show conclusively that OS can be a primary mechanism for consultation and partnership working. It also acknowledges that it has not been based on a comparative study where the traditional approach to strategy development and OpenStrategy are put side by side – such a study would give a stronger contrast between the approaches enabling the differences, strengths and weaknesses to be identified more clearly. Nevertheless, the evaluation is able to conclude that careful consideration must be given to the resource implications and time/staff available to give the support required to ensure that an OS approach to a strategic planning situation will succeed.

Pilot OpenStrategy® for Sustainable Procurement in the North West - Final Report. Page 13 Another beneficial feature of the OS system that was not explored in this pilot is the ability to identify similar initiatives and link between them to improve efficiency of delivery and avoid duplication. This was not tested fully in this case as the stakeholder numbers were relatively low and the organisations were generally operating in different spheres of activity. We would expect overlaps and duplications to be identified more frequently as the number of stakeholders increases and more organisations of similar and overlapping objectives become involved in the development of the strategy.

Stakeholders who attended the final OS workshop in Wigan 8th May 2006 agreed that work should continue on developing a sustainable procurement strategy for the North West and that OpenStrategy should be the mechanism by which it is delivered. The stakeholders have recognised the potential for improved working offered by the OpenStrategy approach and, for this to be realised more completely, the work in this area must be extended.

Based on NW stakeholder experience of working with OpenStrategy and on the findings of Forum’s independent evaluation, we must ensure the following issues are addressed and in place in order to develop this pilot into a full, region-wide OS:

A sufficient number of trained OS facilitators available with time allocated within their work plans to them to devote time to supporting the stakeholders. That senior level (chief executive officer) staff give endorsement and support to both the need for a Sustainable Procurement strategy for the North West, agreement that the OpenStrategy technique is the mechanism by which it should be delivered, and that they engage actively in the delivery by means of the technique. A clear definition of objectives and expectations are set and agreed by all stakeholders at the outset; Sufficient numbers of staff from the key organisations involved being willing and able to devote time to become actively involved with the regional strategy. Appropriate numbers and types of stakeholders are involved to represent the range of organisations involved in sustainable procurement – in this case involving sufficient numbers of the private sector companies that provide goods and services. Sufficient resource is made available both by participating stakeholders and facilitators to define and agree protocols for engagement between stakeholders and to deliver adequate training. These resources to be maintained throughout the time of the OpenStrategy by its users, in order to provide top-up training caused by unfamiliarity with the tools and to train new members that join later. That participation in the OS aligns as closely as possible with stakeholders’ day-to-day jobs. That representatives from stakeholder organisations are able to make decisions for and on behalf of the respective organisations.

9.3 Towards the development of a NW Sustainable Procurement Strategy

At the final workshop of the pilot held on 8th May 2006, the stakeholders of this pilot OpenStrategy agreed that there is a recognisable need for strategic direction that addresses procurement practice in the North West and how it contributes to the sustainability agenda. Furthermore, when the UK Government has responded to the recently published recommendations for a Sustainable Procurement National Action Plan10, the resulting national framework will provide us with both the structure and direction to enable activity at the regional and local levels to be focused and effective. It will also add much needed support and encouragement to regional and local-level advocates of sustainable procurement in their efforts to make the necessary changes, galvanise action and support, and instigate meaningful activity on the ground.

While agreement to work towards delivering regional activity on sustainable procurement in the North West using the OpenStrategy approach has been achieved with those involved in this pilot, officers of the NWRA are working on engaging senior level officers to gain support and agreement about what is required and possible. This will ensure that what emerges in the next stage, as a result of this pilot exercise, is both sufficiently resourced, realistic, and supported by strong leadership.

10 'Procuring the Future' - The Sustainable Procurement Task Force National Action Plan. (2006) Defra. http://www.sustainable-development.gov.uk/publications/procurement-action-plan/index.htm

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9.4 Concluding remarks and the wider context

“We need a major shift to deliver new products and services with lower environmental impacts across their lifecycle, and new business models which meet this challenge while boosting competitiveness. And we need to build on people’s growing awareness of social and environmental concerns, and the importance of their roles as citizens and consumers… Our new goal is to be recognised as amongst the leaders in sustainable procurement across EU member states by 2009” – Securing the Future – UK Government Sustainable Development Strategy (March, 2005)

In terms of the wider issues regarding the need to Figure 5: Shared UK Principles for achieving Sustainable move towards a more sustainable society, Development sustainable procurement has a great deal to offer our efforts to achieve this. Living within Ensuring a If procurement alone can be understood as the environmental strong, healthy limits and just society acquisition of goods or services at the best possible cost, and that the ‘costs’ are then correctly defined to include total costs; i.e. direct and indirect, then Achieving a Promoting Using sound this subject can help in contributing to the five sustainable good science shared principles set out in the UK Sustainable economy governance responsibly Development Strategy (see Figure 5). Procurement Source: Securing the Future –UK Government sustainable can contribute to achieving a sustainable economy, development strategy (2005) Defra, HM Government. delivering tangible benefits to society and minimising damage to the environment.

This pilot has shown that procurement is a complex subject involving all sectors of society: public authorities, voluntary and community sector organisations and the private sector. If it is to be effective, it must be managed in a way that co-operation and joined-up working are encouraged and supported in every way possible. Good governance and sound science will provide this. We believe that OpenStrategy is an approach that has the potential to enable us to put these essential principles into place and thereby guide, enhance, promote sustainable procurement in the North West and, ultimately, help us get to a strong, healthy and just society for all.

Pilot OpenStrategy® for Sustainable Procurement in the North West - Final Report. Page 15 Appendix 1: Projects listed in the Pilot NW OpenStrategy for Sustainable Procurement

1. A project called 'NW NHS Suppliers Bureau' 2. Awareness raising of value of specifying organic food in tenders 3. Central point (website) for public sector orgs to advertise tender contracts 4. Design & implement monitoring prog for NW Food and Drink Public Sector Tendors 5. Develop a Buy Recycled Programme construction stream 6. Develop a Buy Recycled Programme Local Authorities stream 7. Develop a Buy Recycled Programme NHS stream 8. Develop a pilot OpenStrategy for sustainable procurement in the North West 9. Develop and run procurement officer training programmes 10. Development of a regional Buy Recycled Code 11. Development of a regional Buy Recycled Programme 12. Development of a Regional Food and Health Action Plan 13. Development of a Sustainable Construction Policy for the NWDA 14. Development of a sustainable procurement policy for all NWDA funded projects 15. Development of a sustainable procurement training programme 16. Development of Contaminated Land Remediation supply chain directory 17. Development of Energy Efficiency supply chain directory 18. Development of Microgeneration supply chain directory 19. Development of Regional Tendering processes for NHS PASA contracts 20. Development of Water and Wastewater Treatment supply chain directory 21. Development of Wind supply chain directory 22. E-Bulletin to NWFA members 23. Education (Sustainable Development Indicator) 24. EU Procurement Directives Workshops 25. For Community Sector and Local Authorities re. waste and partnering 26. Forecasting supply and demand across sustainable construction supply chain 27. ISO 14001 fast-track project 28. IT procurement courses for SMEs to enable access to e-procurement 29. Marketing and Implementation Plan for the NWDA's Sustainable Construction Policy 30. Monitoring of the Sustainable Construction Policy in NWDA projects 31. Price Benchmarking Pilot Project 32. Production of catering guidelines 33. Project to increase awareness & skills in sustainable construction amongst SMEs 34. Project to increase capacity of small and local suppliers to meet demand 35. Project to increase consumption of healthy and nutritious food 36. Project to increase tenders from small and local producers 37. Project to raise food production and process standards 38. Project to reduce the environmental impacts of the production and supply chain 39. Project to tackle risk in sustainable construction 40. Promotion of NW Environmental Technology companies nationally and internationally 41. Promotion of Sustainable Construction Policy/Code to non-NWDA projects 42. Promotion/marketing campaign to consumers re. sustainably constructed homes 43. Provision of high quality urban design and maintained heritage 44. Purchase Spend Analysis 45. School Fruit and Vegetable Scheme 46. Seminars/training/meet-the-buyer events for organic farmers 47. Sharing Best Practice across EU through Healthclusternet 48. Supply chain cluster development 49. Sustainable Procurement Task Force 50. Tender Threshold Research Project 51. Training LA procurement officers in working with SMEs

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Appendix 2: Benefits of Sustainable Procurement as listed in the Pilot NW OpenStrategy for Sustainable Procurement

1. A more sustainable environment 2. Benefits to Society (SD indicator) 3. Civic pride in local built environment 4. Closer integration of resource allocation and sustainable development 5. Commitment to Sustainable Procurement from the Highest levels of Government 6. Decreased water consumption 7. Decrease in fuel poverty 8. Employment and Poverty (SD indicator) 9. Flourishing countryside 10. Greater food choice for ethnic and religious groups 11. Greater profits for NW companies providing sustainable products and services 12. Health benefits (SD indicator) 13. Healthier and better performing students and workforce 14. Healthier staff through reduced risk of injury 15. Housing (SD indicator) 16. Improved animal welfare 17. Improved procurement practices within local authorities 18. Increased collaborative working 19. Increased supplier competition 20. Informed local economy decisions can be made 21. International Assistance (SD indicator) 22. Landfill capacity saved 23. Local authorities less likely to be subject to legal challenge 24. Lower environmental impacts from the government estate and its supply chain 25. Mobility and Access (SD indicator) 26. More competitive small and medium sized suppliers 27. More sustainable UK rural local economies 28. Protection of our natural resources and enhancement of the environment 29. Recycling and reprocessing economy supported 30. Reduced CO2 emissions 31. Reduced hospital stays 32. Reduced strain on the NHS due to fewer accidents/incidents in workplace 33. Reduction of Greenhouse Gas Emissions (SD indicator) 34. Reduction of Resource Use (SD indicator) 35. Savings from waste minimisation 36. Stronger North West local economies 37. Supplier monitoring 38. Sustainable transport and access

Pilot OpenStrategy® for Sustainable Procurement in the North West - Final Report. Page 17 Appendix 3 – Suppliers Survey

Case Study: Councils allowing waste to be exported rather than used as a resource for business growth in their localities.

Organisation: Centriforce Products Ltd., 14-16 Derby Road, Liverpool, L20 8EE. Contact: Barry Keeling, Sales Manager. Tel: 0151 2078109. http://www.centriforce.info/ Email: [email protected]

Description: Centriforce Products pioneers the use of extruded plastic products all over the world for a variety of industrial, agricultural and leisure applications. From fencing and walkways to sports grounds, pig pens to pallets, underground utility protection to hygienic linings. Many of products use recycled material from the waste stream.

Procuring from Centriforce Products Ltd offers the following benefits:

Reduced travel: Centroforce are trying to concentrate our supply to the NW region, concentrating initially on Merseyside Reduction in exporting waste to China: 80% of all the UK’s waste plastic bottles are exported to China. Over 50% of all UK waste plastic exported to China. Using waste streams to create UK jobs. Diversion from landfill. “Plastics are It’s never going to rot, so let’s use it on the surface.” The Fabrication businesses that are supplied by Centriforce are good job creators, particularly for small and micro businesses.

Lost Opportunities: Exporting waste products to China or elsewhere misses the opportunity for local business development. Need good leadership from the Council Leader or Chief Executive. Tameside have a particularly pro- active approach from the Leader. The council has been doing this for some time and have had to face up to financial difficulties in some cases. But this has enabled them to allow local businesses that use waste as a resource to flourish over time. Need to use whole life costing (WRAP did comparative study on timber vs plastic and found that, while the up front cost of plastic is higher, the full life cost is lower than using timber). Local authorities need a centralised buying system. It is costly to businesses to spend time reforming links with up to 50 different individuals in councils in order to offer their goods and / or services.

Case Study: Undesirability of supplying to the public sector

Organisation: Lakes Speciality Foods, 5 Bankside Barn, Crook Road, Staveley, Cumbria, LA8 9NH Contact: Dan Weston, email [email protected] , telephone 01539 822713

Description: A small business based in Stavely, Lake District National Park, aiming to supply the best quality food available from the procurement of local food products from Cumbria, outlying counties and other countries. Lakes Speciality Foods is a new business created to enhance the food chain by working very closely with producers that are passionate about pure (quality) foods. Only foods with distinction are sourced and offered for sale ensuring traceability and customer satisfaction that the foods offered are of the highest excellence. Local organic meat can be sourced and full traceability offered in procuring local beef, lamb, and pork.

Procuring from Lakes Speciality Foods offers the following benefits: Fair prices to farmers and small scale producers High farm standards – animal welfare and environmental care Food miles saved Supports regional and local economy Regional marketing and image

Pilot OpenStrategy® for Sustainable Procurement in the North West - Final Report. Page 18 Health benefits of quality food consumption (diet, nutrition)

Lost Opportunities: The lack of public sector food procurement opportunities represents a lost opportunity for both the supplier and the public sector. The public sector has been identified by LSF as a potential market but as yet the benefits of entering this market are not sufficient to warrant a significant investment of resources. Supplying to the public sector remains an unattractive proposition for LSF because of the following reasons: Most public procurement contracts involve a third party/preferred supplier. Going through a preferred supplier means the margins on the profit for LSF would be significantly less. Some of the criteria in the accreditation schemes are prohibitive, for example ISO9002 requires the supplier to have a loading dock. Small scale producers would struggle to attain the Red Tractor logo. True sustainability costing needs prices to come from the bottom up, starting at the farmer getting a fair price. Currently public procurement and pricing is driven from the top down - this will not ensure quality product or operations as it simply drives standards down in an effort to reduce costs and win contracts on a price preference basis. Need to have smaller contracts – individual small farmers could supply for example to a school but across a whole LEA area they may not have the produce.

Case Study: Social Enterprise looses contract to conventional service supplier Organisation: EMERGE

Description: EMERGE (http://www.emergemanchester.co.uk) is a not-for-private-profit community business that aims to reduce Manchester's environmental impact and improve social and economic conditions in Manchester and Greater Manchester.

EMERGE offers the following: specialises in collections for both household (domestic) and office waste (commercial) runs occasional petitions and campaigns in support of better local recycling services has a very strong policy of employing local people and a number of New Deal people where it has raised the skill levels and expectations of long-term unemployed. Also employ some people with learning difficulties. As a social enterprise, their focus is about promoting the 3 ‘R’s ethos (reduce, recycle, reuse) and improving quality of lives for local people. Offers a high quality of customer care and has been very good at providing services to hard to reach communities: particularly East Manchester. Follows the ethos of resource management, not waste management.

Lost Opportunities: EMERGE recently lost Manchester City Council contract for curb-side recycling collection to large conventional waste management company. Local Council said in added value terms, there was very little to choose from them and conventional waste management company. Contract was lost because waste management company were able to bid at lower cost.

Key Lessons: LAs don’t want to carry any burden of risk. It is perceived as a problem and that social enterprises are less able to manage risk – logistical, mgmt. E.g. if trucks fail, GM waste has much greater resources to call upon if things go wrong. Some social enterprises may have a perception problem as not being seen as serious providers of services to the public sector. Tensions may also exist between community sector organisations who both operate as social enterprises and who campaign for service improvements. E.g. EMERGE campaigns on recycling to encourage officers and councillors to do more. The authorities may see the traditional waste industry companies as easier partners. This has implications on how to conduct relations with potential clients, while performing a campaigning role.

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Case Study: Failure to win Local Authority waste contract Organisation: Energywise Recycling Ltd, 49 Jordan Street Liverpool L1 OBW Telephone: 0151 709 6113 Email: [email protected] Contact: Annie Barker, Director

Description: Energywise Recycling Ltd is a not-for-profit social enterprise based in Toxteth, Liverpool. It is dedicated to creating local employment and enterprise through progressing sustainable waste management (recycling, re-use and waste minimisation). Energywise Recycling sees waste as a resource which can be used to create new products and new jobs. A new enterprise called "Energywise Recycled Glass" has recently been established, which will be making new glass products out of the glass collected by leading collections. Its overriding objectives are to protect the environment and improve health through the development of sustainable waste management services. It aims to create employment and training opportunities for local unemployed residents, and contribute to local economic development through social enterprise activities.

Procuring waste services from Energywise Recycling Ltd. offers the following benefits: Waste minimisation, re-use and recycling of waste Local employment opportunities and training for the long-term unemployed Promotion of neighbourhood participation in sustainable recycling – provides incentives for residents to recycle (as it creates local jobs) Contribution to local economic development through social enterprise Reduced environmental impact of waste management services, as the enterprise is based on sustainable development principles and operates to high standards of environmental care Health benefits of sustainable waste management and employment Increased education and awareness through additional schools projects Innovative waste solutions and flexibility

Experience: Energywise currently run a successful kerbside box and bag collection service for 27,000 households, a wheeled bin service to 10,500 multi-occupancy households, and a schools recycling service to 84 schools. They have adopted a multi-objective approach (linking recycling service provision to jobs, enterprise growth and regeneration).

A key issue for them is cashflow, as delays to projects and payments mean a loss of income. The involvement of SME’s and SE’s in strategic planning is also essential to gain external funds.

Energywise lost out on a kerbside contract three years ago: their level of turnover was too low to meet the Accounting Equation. They had intended to form a consortium with other social enterprises to overcome this, but due to the short amount of time given for the pre-qualification questionnaire stage, they were unable to do this and therefore didn’t get short-listed. This was something that could easily have been prevented, had the local authority understood the timescales the SME’s and SE’s need to prepare bids. Part of the contract that was finally let included a ring-fenced area where Energywise were given service delivery, however they would have had the capacity to go for the whole contract.

Pilot OpenStrategy® for Sustainable Procurement in the North West - Final Report. Page 20 Appendix 4 – Clean Merseyside Centre’s Buy Recycled Code Sub-Strategy

Pilot OpenStrategy® for Sustainable Procurement in the North West - Final Report. Page 21 Appendix 5 – Envirolink Northwest’s Environmental Technologies Support Sub-Strategy

Pilot OpenStrategy® for Sustainable Procurement in the North West - Final Report. Page 22 Appendix 6 – NWDA Sustainable Construction Policy Sub-Strategy

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Appendix 7 – Groundwork Environmental Business Service NW NHS Suppliers Bureau Sub- Strategy

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Appendix 8 – Defra Sustainable Procurement Task Force Sub-Strategy

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