Terry McGivern of the Institute for Sustainability on a new resource for contractors building local supply chains.
Many contractors and subcontractors will be aware of an increasing interest in local supply chains and making use of local suppliers, particularly by large public and some private procurers. The key reasons include legislation and the realisation that using local supply chains can make real sense.
The 2012 Public Services (Social Value) Act requires all public bodies in England and Wales to consider how the services they procure can improve the economic, social and environmental well-being of local areas. Publicly funded projects will be increasingly impacted by these requirements, in turn obliging contractors to establish, or strengthen, their local supply chains for building projects. Other obligations will require councils to consider local suppliers, including granting planning consents for both public and private projects.
It is clear to see why the government wants a more local focus: using local suppliers provides jobs to local people, who, in turn, will spend their money in the area, resulting in the “multiplier effect”. This means that £10 spent locally circulates two-and-a-half times, being worth £25 to the local economy. It can also often be far more sustainable to use local and smaller suppliers as they tend to have a lower carbon footprint because of reduced travel and local sourcing solutions.
Contractors and other large procurers are increasingly acknowledging a range of benefits of utilising local suppliers. In many cases they are more flexible and innovative, allowing them to be more responsive. Contrary to perception, they are often able to compete on price too. They can be an extremely good fit for opportunities in the growing renewables and low carbon retrofit market because the nature of the work means local, trusted businesses can be an important factor in successful delivery.
"Contractors and other large procurers are increasingly acknowledging a range of benefits of utilising local suppliers. In many cases they are more flexible and innovative, allowing them to be more responsive. Contrary to perception, they are often able to compete on price too."
However, opportunities are sometimes missed by trade subcontractors and other local suppliers because they think they are too small, cannot compete or simply do not know where to find, or how to respond, to tenders.
So the Institute for Sustainability has launched its Local Procurement and Supply Chain Toolkit to provide guidance to both large contractors and specialist trade subcontractors on local procurement and supply processes. For contractors and other large procurers, the toolkit has guidance on developing a local procurement strategy, enabling them to incorporate local suppliers into formal procurement programmes.
It particularly focuses on the opportunities emerging within large renewable energy and low carbon retrofit contracts, supported by government schemes such as the Green Deal, ECO, Feed-in Tariff and Renewable Heat Incentive. It also includes case studies highlighting best practice.
For specialist subcontractors and other trade businesses, the Toolkit provides practical guidance to help increase their chances of winning business tendered by contractors and other large public and private sector organisations. It provides simple guides and useful templates making tasks that may otherwise seem onerous and daunting easy to complete. For example, writing an environmental policy may seem challenging if you have no idea what one is, where to start, or what good practice is.
The Toolkit also gives an insight into the investment plans and procurement methods adopted by a range of different large procurer organisations, including councils and housing associations. Understanding how these key large buyers procure will help subcontractors and other trade businesses to find opportunities, decide which services to offer and understand what is needed to apply for them.
The Institute’s Local Procurement and Supply Chain Toolkit is part funded by the European Regional Development Fund (ERDF) and can be found here.
To complement this, the Institute for Sustainability will also be publishing a Renewable Energy Toolkit. This will provide more detail on the renewable energy market and the potential scale of the opportunities for each onshore renewable technology, and highlight those most relevant to subcontractors and other trade businesses in the supply chain. Constraints and barriers to development of each technology are also explored, as well as the opportunities for their deployment. Further information can be obtained by contacting [email protected].
Terry McGivern is head of resource efficient buildings at the Institute for Sustainability
