Community Benefits Clauses: An Introduction

1. Community Benefits Clauses: An Introduction Fraser Millar Forth Sector Development fraser.millar@forthsector.org.uk

2. Community Benefit Clauses- An overview • Community Benefit Clauses are contractual requirements on suppliers in order to deliver a wider social benefit as part of the core purpose of Public Sector contracts. • The major development work around community benefit clauses has often been in relation to targeted training or employment outcomes. The aim is to support socially excluded and long-term unemployed people to move into permanent employment.

3. Community Benefit Clauses – An Overview Community Benefits can also include- • Equal Opportunities • Training for the existing workforce • Supply chain initiatives • Community Consultation • Contributions to Education • The promotion of social enterprises • Resources for community initiatives

4. Community Benefit Clauses- Are they legal? Community benefit clauses can be included into public contracts as long as they do not contravene EU procurement rules, directives and general EU laws. A Public Body must have a legal and policy basis for incorporating community benefit requirements into any commissioning or procurement processes. To ensure that they have a legal justification for including community benefit clauses, the public body must make sure: • The community benefits they seek fit with their strategic objectives. • The community benefits form part of the “core purpose” of the contract. • Use of the community benefits still represents value for money/Best Value for the public body.

5. CBC’s- The Importance for Employability focussed Organisations. • The major development work around community benefit clauses has often been in relation to targeted training or employment outcomes. • CBC’s can offer opportunities for Third Sector Organisation’s focussing on employability to become involved in the delivery of public sector contracts, either as the primary contractor or as part of the supply chain (particularly relevant for large scale contracts e.g. – large construction contracts). • CBCs can help to level the playing field for Third Sector Organisation’s when bidding against private sector companies for public sector contracts as they take into account the “social value” created through the delivery of the contract.

6. CBC’s- Delivering as the primary contractor. Solstice Nurseries Grampian Housing Association decided to incorporate Community Benefit Clauses into their £100,000 annual contract for the provision of open space maintenance works in various Grampian Housing Association Estates. Within the tender they asked organisations to respond to: • The number of new jobs created through the contract. • The number of unemployed people who gain employment as a result of securing this contract. • The number of people completing recognised training courses as a result of securing the contract. • The number of people completing programmes to help increase job related skills as a result. A number of the bidders were able to demonstrate how they recruited and supported long term unemployed people in the workplace and were able to be given credit for this in the assessment. However the wining combination of price and quality/community benefit was Solstice Nurseries, an established Social Firm working in the Aberdeen area that provides training and employment opportunities for people recovering from mental illness. It delivers garden maintenance services and runs a wholesale nursery that specialises in growing heather.

7. CBC’s- Delivering as a sub-contractor. Action for Children Youth Build Project and the Commonwealth Games: Action for Children Youth Build Project aims to help people back into employment but also to contribute significantly to social and economic development in the community. Youthbuild has developed an action plan which builds significant business relationships with key partners and contractors in order to deliver community benefit requirements. Youthbuild assists business partners at key stages: • Pre Qualifying Questionnaire (PQQ). • Tender Documentation. • Targeted Recruitment and Training Plan (TRTP). • Community Benefit Method Statements. • Positioning Youthbuild as a mechanism for delivering community benefit. requirements which meet with the KPIs.

8. Action for Children and The Commonwealth Games Glasgow City Council has been proactive in including Community Benefit Clauses, particularly in its programme to develop infrastructure for the 2014 Commonwealth Games. Their approach is to focus on three strands; • Targeted Recruitment and Training, • Supply Chain Development, • Developing Social Enterprises. Commonwealth Games contracts that involve Community Benefit Clauses include the: • Games Village Site Remediation, Contractor – VHE – 6 job opportunities (10%) • NISA Velodrome, Contractor - Sir Robert MacAlpine - 20 job opportunities (10%) • Games Village Contractor, - City Legacy Consortium - 100 job opportunities (10%) The Glasgow City Council approach was to proactively engage with contractors and a host of agencies in the city including Glasgow’s five local Regeneration Agencies, Sector Skills Councils, The Supplier Development Programme and Third Sector groups so as to ensure contractors were clear on how they could successfully fulfill community benefits clause requirements of the contract. Action for Children’s Youthbuild project engaged with this process and is now working with Sir Robert MacAlpine in the delivery of community benefit clause element of the Velodrome Contract.

9. Scottish Government Position on Community Benefit Clauses: “In these challenging economic times it is especially important that we get the maximum possible benefit for our communities from public spending. Community Benefit clauses need not cost more and they require contractors working on public sector projects to put something back into the community. “The first question that we should ask when developing any contract specification should be: ‘Can we include a Community Benefit clause?’.” John Swinney, Cabinet Secretary for Finance and Sustainable Growth.

10. Scottish Government Support: Business Support Contract- Business Support Contract- Projected start date May 2011. Aims of this contract include: • Third Sector organisations win more contracts, including with the Public Sector and: • The response of the Third Sector to the opportunity presented by the use of Community Benefit Clauses.

11. Opening Up Public Sector Contracts: Opening up Public Sector Contracts: Aims of this contract include: • Community Benefit Clauses are routinely used in public procurement where appropriate. • Social and economic impact value measures are appropriately applied when designing services. • Procurement/Commissioning leaders in the public sector are more confident in understanding and working with third sector suppliers and collaboration with the third sector is improved.

12. Article 19: Another examples of a Social Clause: Scottish Government- “Scottish Sustainable Procurement Action Plan” “Where appropriate aim to have a strategy for awarding at least one contract to a Supported Business or Factory by 30 November 2010” • By indicating in the Contract Notice that a particular contract is “reserved for sheltered workshops under Article 19 of the Directive” only organisations with more than 50% disabled employees (not just within the UK) can bid for that contract or framework agreement. This effectively allows a public body to reserve contracts for established Social Firms. • Article 19 is currently underused by public sector agencies, however, the Scottish Government was keen to see all public agencies offer at least one contract under Article 19 by November 2010.

13. CBC’s and Article 19- What are the future for them? • To date; both Article 19 and Community Benefit Clauses have been underused. • There are reasons for this, however there is a clear strategic direction from the Scottish Government and political pressure for them to be used more widely. • The Scottish Government is targeting specific resources to ensure there use becomes more mainstream. • Over the forthcoming months and years, it is likely that more and more contracts that include Community Benefit Clauses and Article 19 will emerge. • The Third Sector, particularly those involved in employability need to be prepared to respond the opportunity that this will present.