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Sustainable development - The future in Wales and impact on procurement processes

28 February 2013 #Public Sector


Sustainable development (“SD”) is a term most individuals and companies will be familiar with, particularly when working with or for public sector organisations. The principle was first introduced in the United Nations Brundtland Commission’s report in 1987, which stated that:

Humanity has the ability to make development sustainable – to ensure development that meets the needs of the present without compromising the ability of future generations to meet their own needs.”

The Welsh Government (“the WG”) has been proactive in the promotion of SD as a principle in Wales and further afield. The Government of Wales Act 2006 imposes a legal duty on the WG to create a SD scheme. One Wales: One Planet was launched in 2009 and sets out the WG’s scheme for a sustainable Wales.

In addition, the Programme for Government sets out what the WG is doing to improve the lives of people in Wales and how progress will be measured. The programme’s aim for Environment and Sustainability is “...to become a ‘one nation planet’, putting sustainable development at the heart of government”. It proposes to do this by introducing new legislation to force the issue. With this in mind, the WG is currently consulting on a draft Sustainable Development Bill (“the Bill”). It has created a White Paper entitled ‘A Sustainable Wales: Better Choices for a Better Future’ (“the White Paper”) to inform the consultation, which reflects views received from stakeholders during a previous consultation on proposed SD legislation.    

The White Paper sets out the four proposals detailed below:

Proposal 1 - Impose a new duty on organisations delivering public services to embed SD as the central organising principle

This duty will impact on organisations’ strategic decision making processes as the White Paper states that “...the key elements of sustainable development as a central organising principle are:

  • A clear focus on what the organisation is seeking to deliver in support of the future wellbeing of Wales – the ‘Outcomes’; and
  • Ensuring decisions taken on how the outcomes can best be achieved are fully informed by consideration of the effect on economic, social, environmental and long term wellbeing.”

The duty will apply to strategic decision making processes focusing on policy and corporate planning policies rather than prescribing how organisations should make decisions. However, the WG acknowledges that organisations need the flexibility to identify the most appropriate solution for their particular circumstances. Therefore, the resulting legislation is unlikely to be prescriptive in this regard; rather organisations will be required to set out the outcomes they are working towards. There will also be indicators in place for organisations to measure their progress in complying with the new duty, and the WG intends for organisations to demonstrate compliance with the duty through existing reporting requirements.

The WG intends to provide a legal definition of SD and supplement this with statutory guidance. The definition is likely to be based on the WG’s current account of SD set out in the Programme for Government as follows:

“...an emphasis on social, economic and environmental wellbeing for people and communities, embodying our values of fairness and social justice.  We must also look to the longer term in the decisions we make now, to the lives of our children’s children as well as current generations.”

The White Paper lists the organisations that WG proposes to make subject to the Bill, and these include local authorities, fire and rescue authorities, NHS Trusts, higher education institutions and the WG, amongst others.  Essentially, WG will target organisations whose functions will impact greatest on the economic, social and environmental wellbeing of Wales.  There is a general focus on collaborative working within public sector organisations in Wales and this principle will continue to apply under the new SD legislation.

Proposal 2 - to establish an independent body on a statutory basis to support organisations to embed SD and join up in working towards the improved wellbeing of Wales

It is proposed that the purpose of the new independent body will be to support and guide those organisations subject to the draft Bill, and have the power to challenge organisations to improve their commitment to SD.  The body will support collaboration between organisations, and draw on international best practice so it can provide the best guidance and service to the organisations. 

The White Paper includes proposals for the form that the body will take.  It is likely that a commissioner will be appointed and the paper discusses how such an individual will be recruited.  In any event, it is suggested that the body will report to the WG on an annual basis setting out how it has fulfilled its functions.

It is also proposed that the body will have the ability to collaborate with the Auditor General Wales given proposals to incorporate reporting requirements on SD measures into existing audit requirements placed on those organisations listed in the White Paper.

Proposal 3 - proposed phasing and implementation of the duty, including the timing for the creation of the independent SD body

There will be a staged implementation of the new legislation (“the Act”) following formal approval of the Bill.  The WG anticipates the following:

  • 2015: the new independent SD body created to coincide with when the Act comes into force;
  • 2016 – 2017: organisations delivering public services become subject to the Act.

Proposal 4 - to improve the accountability framework with reporting and scrutiny arrangements to ensure that SD is fully embedded within organisations

The WG intends to deal with accountability through the frameworks already in place for those organisations listed in the White Paper.  The Auditor General Wales already has responsibility for scrutiny for most of these organisations, and will also be responsible for scrutinising organisations’ compliance with the new duty discussed in more detail in Proposal 1 above.  Scrutiny will be restricted to the systems and processes that govern strategic decision making and how SD is considered.

The Impact on Procurement Processes

The true impact on the procurement process will not be known until the SD Bill is made available for review.  However, it is bound to be tempered by the Public Services (Social Value) Act 2012 (“the 2012 Act”), which came into force on 31st January 2013. For those interested in an over of the 2012 act, please refer to our article on the Clarkslegal website entitled “The Public Services (Social Value) Act 2012”.

In any event, the WG’s consultation is due to complete on 4th March, and the WG will then progress the draft Bill with a view to introducing it to the National Assembly for Wales in autumn 2013.  Only then will we be able to fully appreciate in what way the draft SD Bill will impact on procurement process in light of the 2012 Act.

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