What are they and why should your organisation care about them?
What are Community Benefit Clauses?
Community benefit clauses are, as the name suggests, contractual clauses that provide “community benefits”, which is a part of a wider range of “social issues” which in turn forms part of “sustainable procurement”.
Under the Public Contracts (Scotland) Regulations 2012 and the European Procurement Directives, organisations and authorities are enabled to include Community Benefits Clauses (CBC) in their procurement process. Community benefit requirements must be included in the contract notices and terms and be providing a benefit to the purchasing agency.
In simple terms they are about delivering a wider social benefit in a sustainable way as part of a contract generally issued by a public authority body.
Community benefit clauses tend to be used in relation to the provision of targeted recruitment and training, but they can also be used in relation to supply chain initiatives, equal opportunities, the promotion of SMEs and social enterprises and community engagement.
Why are Community Benefit Clauses important for third sector organisations?
CBCs are used to deliver wider social benefits by building economic, social and environmental conditions into the delivery of public contracts and since local authorities spend millions of pounds on purchasing goods and services, the procurement function has the potential to act as a powerful mechanism for social change in addition to the process of purchasing what they need.
The CBCs will usually be included in contracts which do not have social outcomes by themselves. A construction contract might not have clauses for helping people, or a contract of supply of services, but by including CBCs, then the contracts will include social and economic matters. This will make organisations think carefully about how to benefit their communities, as well as deliver the best service for value.
Social issues addressed by CBCs
Example of social issues which CBCs could address are those concerned with disability, gender, race, equality, employment and training issues. CBCs can include equal opportunities, contributions to education, promotions of social enterprises and so on. One practical example can be the inclusion of “TR&T” in a contract, which is a CBC for targeted recruitment and training.
In Scotland, organisations and authorities must address certain priorities in terms of sustainable development. Authorities seek to address the following through their CBCs:
- sustainable consumption & production
- climate change
- environmental protection and resource management
- sustainable development in communities
According to the Scottish Government “Choosing Our future: Scotland’s Sustainable Development Strategy (http://www.scotland.gov.uk/Publications/2005/12/1493902/39032) these are priorities and by including these in procurement through CBCs, authorities will achieve their objectives.
When are CBCs needed to be in a contract?
Typically, contracting authorities must include social considerations and use of CBC where the EU procurement rules apply. Where the EU rules do not apply then procedures which are less costly could be adopted.
Under EU procurement rules and the Public Contracts (Scotland) Regulation 2012, the CBCs must be included where the value of the contract exceeds a certain limit. One exception to this however is where there are contracts which have a cross-border interest then the EU procurement laws must be followed even if the contact does not exceed the certain set limit.
For contracts which are below threshold and have no cross-border interest, then there will just be a statutory duty imposed on the authority (which is to provide “best value” for their services).
Public authorities contracting with social enterprises
Social enterprises work across a wide range of industries and it is common for public authorities to be involved in contracting with social enterprises. Services may include: employability, climate change engagement and renewable energy, health care, youth and community education, advocacy, etc. There are numerous examples of local authority bodies buying goods and services from social enterprises within Edinburgh.
Public sector bidding – a huge opportunity for the social enterprise sector
Public sector bidding, especially for large opportunities, is not a simple process. However it can be very rewarding for those bidders who have integrity, openness, and commitment. To be competitive in bidding in this environment there are key principles that a social enterprises must follow (The Guardian, 2013):
- Demonstrate ability to deliver the core services – you may have the best of intentions but your ability to deliver the services being tendered is the key. The buyer needs to believe that you can deliver what they’re buying.
- Demonstrate your credibility in delivering change and social impact – you must provide evidence in the form of a roadmap for change with tangible action steps.
- Adjust your offer to the buyer’s needs –What are the problems they are trying to solve? Why are they buying? One size does not fit all.
- Emphasize your uniqueness – make sure the buyer knows what your impact is and support that with data, testimonials and examples – make it real for the buyer, and explain how it applies to their situation.
- Integrate your social impact with your core offer – explain the operational and commercial models you will deploy. How will your social impact be delivered? Funded? Measured? Reported?
So the benefits of these CBCs (hopefully) are that authorities will think of new strategies and form a new innovative approach to implement the strategies and include the community. For example, unemployed local people could be employed and deprived areas could be improved and regenerated as a result. Thus a partnership with third sector organisations is not only beneficial to the buyer and the contractor, but also to the community at large.
Consider also partnering with companies that are bidding (such as house builders) and offer them your community benefits (for a price).