Tendring District Council (TDC) is undertaking a project to incorporate social value to its existing procurement process, based on the anchor institutions approach. Local authorities, other public bodies, and some large voluntary and private sector organisations form the ‘anchors’ in a place. Having seen examples from Preston, Manchester, and an emerging approach from Essex County Council, the desired outcome is to better communicate the procurement process to local companies and support them to understand how to bid into council contracts to increase the level of spend by anchors on local companies.
The challenge
As part of the LGA’s Economic Growth Advisers programme, consultants were commissioned to review TDC’s spend data and gauge how frequently they are spending money with local firms.
Understanding how large local organisations spend their funding highlights opportunities to increase spend in the local economy. The aim is not to adapt or weight the existing process to favour local companies, but rather to communicate the opportunities better and make changes that could assist them in submitting bids/tenders, to encourage local bidders and also ensure smaller local companies can be considered equally with those from further afield.
A key challenge in ascertaining this was how best to share data to enable it to be accurately analysed, as about a fifth of TDC’s contractors are individuals, which means their details are redacted from data sets, although the percentage of the council’s spend is much lower.
The solution
The consultants used data based on postcode to find out where the spend has occurred, rather than specific details of individuals. The consultants are analysing data from the past five years, to take into account any patterns/trends which were in place before the COVID-19 pandemic, as well as any changes which have taken place as a result of the pandemic itself.
Under GDPR, the council is still able to obtain valuable insight into the ratio of local spend against companies based further afield that the council spends money with, by analysing the following categories:
- council service (eg planning and housing)
- council activity (e.g. car parks, recycling and waste)
- category of payment (e.g gas and electricity)
- date of payment
- amount (exc. VAT)
- post code.
The impact
Once the spend analysis has been completed, TDC will be able to focus on locations/sectors where the council is spending less within the district than might be expected and organise a virtual event/s in summer 2022 for the supply chain to discuss why firms are not bidding into council contracts. This will be an opportunity to hear from businesses themselves about the obstacles they face in submitting bids, but also a key mechanism through which the council can promote the opportunity to become a supplier to the council and share information on how it does business, to encourage future engagement.
How is the approach being sustained?
Engagement with businesses will mean the council can adapt the process where possible to reduce obstacles they may be facing, working alongside procurement teams in the council to react to concerns raised by local businesses where appropriate to update existing strategies and/or processes. In the longer term, the council already works with one of its partners, Colbea, an organisation dedicated to supporting businesses, among others, and will share learning from this project to enable them to better support local firms to understand how to bid into council contracts.
In terms of communicating this approach to other anchors, the council is part of the wider network of anchor organisations across Essex County. The council has outlined this project to the Anchors group, and once the spend analysis is complete, this forum will receive information on the approach, so that they too can understand the areas where there is opportunity to direct more spend locally. Continued engagement will remain important in order to ensure anchors engage with the results in the long term, and therefore the council will monitor the outcomes of the updated approach to internal procurement and continue to communicate relevant findings as a result, as well as incorporating feedback from partners as it becomes available and applicable.
Lessons learned
Lessons learned:
This is an ongoing project but the workaround in order to complete the spend analysis has been one of the first lessons learnt ie effective data sharing to adhere to GDPR requirements whilst also gathering useful data. This informed the focus of the analysis on postcodes rather than sharing individual data sets.
The key lessons learnt will come forward after the gaps have been identified through the spend analysis and the resultant dialogue with businesses to improve local spend.
Relevant resources
Contact
Lee Heley – Interim Corporate Director: Projects Delivery [email protected]