Michael Harty (Clare, Independent) | Oireachtas source

As far back as 2012, the Department of Public Expenditure and Reform issued a circular to all public bodies on the importance of maximising the value for money achievable when procuring goods and services. The public service managers were told that the Office of Government Procurement and the National Procurement Service were designed to optimise benefits to the public service through the strategic aggregation of its buying power. Public bodies were reminded that such central procurement was targeted at securing best value for money and facilitating contracting authorities to deliver services within their budgetary constraints. The managers were also told that certain centralised procurement frameworks would be mandatory. Public bodies were told that central buying would bring cash savings, administrative savings, greater purchasing expertise, improved consistency and enhanced service levels and legal certainty. One will search in vain for a reference to social value or to the impact such a policy would have on local communities and local business. It was all about saving money. The Government was strapped for cash so such a policy might have been understandable at the time but now it is penny wise and pound foolish.

To illustrate the folly of this approach, let me take the example of the local school. The local school is not just a provider of education for our children, it can also be an important economic driver in our towns or villages. The school spends money on stationery, printer ink, cleaning services, electricity, books and IT services. Suppliers of services to schools can be former pupils or employees of former pupils. Local suppliers are easily accessible and provide a fast and effective service.

There is often a symbiotic relationship between schools and suppliers who are part of the school community and they are often called upon by schools to sponsor school activities or to assist with fundraising. This does not mean that contracts should be awarded because there is a close and supportive relationship with the institution or the school. It is perfectly possible to have competition between suppliers locally. That is the way to ensure good value for money and social value. There must be proper tendering processes and the concept of value for money is essential but we must also add the concept of social value in deciding with whom the contract should be placed.

Under central procurement, the stationery and printer ink supplier probably has no connection with the school and the company may be a large multinational that nobody has heard of. That is why the concept of social value is very significant so that public bodies, as the Bill states, have regard to economic, social and environmental well-being in public services contracts. Public authorities should consider wider social and environmental benefits when they choose suppliers, rather than basing commissions solely on price and quality.

It is not enough to enact the legislation incorporating social value into public service procurement, we must ensure the public bodies implement that legislation. I support the Bill and commend Deputy Frank O'Rourke for bringing it forward.

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