Time to fix public procurement

Caterers and campaigners want a more sustainable model for public procurement but are politicians equally hungry for change? Nick Hughes reports.

As the foodservice sector begins the long road to recovery from coronavirus now might seem the wrong time to be tinkering with rules over public procurement.

But leaving covid-19 aside for a moment, there are reasons why there may never be a better opportunity to rethink the way the state purchases food to support a healthy, sustainable food system.

Brexit has given UK lawmakers licence to specify the procurement of local products in ways that were made more difficult (albeit still possible) by EU membership.

Controversial potential trade deals with countries such as the United States and Australia, meanwhile, have led to calls for the public sector to lead by example in sourcing UK food produced to higher standards than could be permitted under future market access arrangements.

More important than both of these reasons, however, is the simple fact that existing government buying standards for food (GBSF) are considered not fit for purpose.

In a hard-hitting report published in April, the House of Commons environment, food and rural affairs committee (EFRA) concluded that the government had largely failed to use the £2bn it spends each year on procuring food and catering services to drive its agenda on food production standards, animal welfare, sustainability and support for domestic producers. “We were surprised and disappointed to find that this lever has not been used more effectively,” wrote the cross-party committee of MPs, who urged the government to “lead by example in setting high standards for food procurement”.

Failed ambition

Current buying rules date back to Defra’s 2014 plan for public procurement which set baseline standards for food alongside an additional ‘balanced scorecard’ of considerations buyers should take into account when putting out tenders with the aim of ensuring more complex quality criteria such as health and resource efficiency are balanced against cost when making procurement decisions.

The EFRA reports notes the “commendable ambitions” of the approach but says these have not been “matched by a similar, longer-term effort on delivery”. Even where food procurement standards are compulsory – which is only the case for central government departments – poor monitoring and enforcement have undermined the ambition making it “difficult to evaluate how successful they have been”.

In evidence submitted to the inquiry, Bristol City Council exemplified the ineffectual nature of the standards when it stated their impact had been “limited” and were considered “nice to have if we have time”.

The lack of monitoring of compliance with the GBSF also came in for heavy criticism from the likes of the Soil Association, the Food Foundation and Consensus Action on Salt, Sugar and Health, with the latter explaining that “there has not appeared to have been any monitoring put in place by the government to ensure the mandatory standards are being followed, and no penalties if these targets aren’t adhered to”.

Summarising the failings of the current system, Soil Association head of policy Rob Percival says: “We need standards that are fit for purpose. They need to be mandated across the public sector and compliance needs to be monitored to ensure implementation. At the moment we have none of those things so schools [for example] are vaguely encouraged to use the government buying standards but are not actually required to do so.”

Ruth Westcott from Sustain, the alliance for better food and farming, is more blunt: “You’ve got to admit [that it’s] a disaster,” she says, with the standards “not driving any kind of change in the supply chain”.

New approach

The government appears to have recognised the flaws in its current approach and is due to publish a review of the standards later this year. Public procurement is also set to feature heavily in the second part of Henry Dimbleby’s national food strategy for England, expected to be published over the summer.

The MPs that make up the EFRA committee have already given their two pennies’ worth of advice on what the government should do to improve matters. First, they believe the GBSF should be made mandatory across the entire public sector in England so that councils such as Bristol, along with other public institutions like schools and hospitals, are brought within its scope.

They also want the government to review the case for making the balanced scorecard mandatory, although Footprint understands from industry sources that a more likely scenario is that the scorecard is scrapped entirely in favour of a new approach.

In addition, the committee wants to see loopholes closed that allow food produced overseas to lower standards than are required in the UK to be served in public settings. The GBSF states that “all food served must be produced in a way that meets UK legislative standards for food production, or equivalent standards”, however the requirement can be sidestepped if this leads to a “significant increase in costs which cannot reasonably be compensated for by savings elsewhere”.

It’s not clear how frequently the loophole is exploited due to the lack of monitoring but the committee urged that even if rarely used the loophole must be closed since it is “inappropriate for the government to advocate high food production standards for imports in future trade deals when any part of our public sector is exempt”.

Campaigners suggest this particular loophole makes it “pretty much impossible” for caterers to select more expensive suppliers, even if they want to for reasons of sustainability. “At the moment we're in a situation where schools and local authorities and hospitals are trying to do the right thing, and then they're facing supply chain barriers that make it difficult,” says Westcott at Sustain.

A number of campaigners want the government to go even further by setting standards that exceed the UK legal baseline in areas such as animal welfare. The RSPCA stated in its evidence to the EFRA inquiry that the GBSF had “not kept pace with the changing consumer market”, giving the example of eggs, where the guidance “is simply not to use the conventional battery cage which has been illegal in the UK (and the EU) since 2012”. It also suggested the GBSF should specify that “a percentage of meat and meat products are RSPCA Assured as a minimum and all are farm assured” as certified by the Red Tractor scheme.

Sustain, meanwhile, called for the standards to be “net zero emissions proofed” including reducing meat and buying smaller amounts of pasture-fed, higher welfare and free range meat, dairy and eggs and more fruit and vegetables. “The government buying standards need to have a mandatory requirement for a maximum amount of meat that can be served across the week,” Westcott adds.

EFRA committee MPs agreed that the public sector should lead by example in setting high standards and called for the government to “review and update the GBSF to take account of new evidence, government commitments, industry practice and consumer preferences on nutrition, animal welfare, sustainability and climate change”.

Price the priority

Percival from the Soil Association, which certifies the standard of food sold in schools and other public settings through its Food for Life programme, says in recent years there has been a shift towards lowest cost purchasing with as much as 80% of the contract tender determined on cost and only 20% on different quality criteria “which creates a race to the bottom”. He suggests that a “60/40 weighting mandated on quality relative to cost would help to fix that”.

As for caterers themselves, the imposition of more stringent buying rules may not phase them quite as much as ministers might assume. One contract caterer notes that there is not always a huge appetite within the sector to pay more for higher quality products like meat and dairy, adding “if the government sets some new rules and regulations then that's going to help.”

Another suggests there will always be a conflict between cost and quality unless the policy “is enshrined in law or mandated in some way”.

With new trade deals potentially opening the door to an influx of lower-standard foods such as meat, setting a higher, mandatory baseline for public procurement is one way in which politicians can provide some protection to domestic producers without torpedoing trade deals. It would also prevent those progressive caterers that are already committed to serving higher quality produce from being undercut by less responsible competitors.

Small and medium-sized suppliers might also get more of a look-in under a revamped framework. The EFRA report notes that the current system favours large contractors because of the high weighting given to price and “unwieldy and complicated” contracts that in practice serve to lock small suppliers out of the market.

A pilot has taken place in local schools by Bath and North East Somerset Council of a new dynamic purchasing system whereby large contracts are broken down into smaller chunks thereby allowing local producers to submit bids to supply specific products rather than the entire contract. The pilot, which the EFRA committee wants to see replicated nationally, demonstrated that food costs did not increase when buying from local SMEs; in fact Greg Parsons, co-founder of the South West Food Hub, told the inquiry that “there was a saving” that was “largely driven by a reduction in food miles”.

Everything points to there being a better, more sustainable model for buying food for the public sector and the appetite among businesses to adopt it. It’s now up to politicians to seize the opportunity.

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