Challenges to overcome
Our budgetary processes favour choosing the lowest-upfront-cost option rather than looking at long-term value for money.
An illustrative decision-making model has been developed to show how sustainability issues, including cost, can be taken into account more effectively in day-to-day decision-making processes. It proposes an example methodology, that could be adapted and applied to both products and services, further details can be found here.
Treasury guidance states that the costs of a product or service across the whole of its useful life should be considered when a procurement decision is being made.
Another route is to build social and environmental considerations into the specification of the products; this may be easier than trying to compare whole life costs for different options, and puts the onus on the supplier to seek out the most sustainable solution.
In the public sector an alternative approach is to set up or apply for a grant from an 'Invest to Save' fund which can be used to purchase products or services with a specific sustainability pedigree. An example is the Salix fund which is available for organisations looking to invest in technologies that will reduce carbon emissions. Other organisations such as Welsh Health Estates have set up their own internal funds.
Sustainable procurement is perceived as conflicting with the value for money and efficiency agendas.
The 'Realising Aspirations' report produced by The Prince of Wales Office in partnership with the National Audit Office sought to show how the sustainability and value for money agendas can actually complement each other. Kent County Council is saving over £1.8million over 5 years by replacing their traffic light bulbs with LED lights.
Procura+ have produced a Guide To Cost-Effective Sustainable Public Procurement.
For a wider exploration of this issue explore the Financial management & accounting module.
Are there challenges in this area we haven’t discussed? If so, please tell us about them.
Do you have another example of how these challenges can be overcome? If so, please submit a case study.