Community Benefits Clauses:
An Introduction
Fraser Millar
Forth Sector Development
fraser.millar@forthsector.org.uk
Community Benefit Clauses- An overview
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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.
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
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:
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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.
CBC’s- The Importance for Employability
focussed Organisations.
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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.
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:
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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.
CBC’s- Delivering as a sub-contractor. Action for
Children Youth Build Project and the Commonwealth
Games
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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.
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;
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Targeted Recruitment and Training,
Supply Chain Development,
Developing Social Enterprises.
Commonwealth Games contracts that involve Community Benefit Clauses include the:
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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.
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.
Scottish Government Support: Business
Support ContractBusiness Support Contract- Projected start date May 2011. Aims of
this contract include:
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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.
Opening Up Public Sector Contracts:
Opening up Public Sector Contracts: Aims of this contract include:
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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.
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”
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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.
CBC’s and Article 19- What are the future
for them?
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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.