Social Firms Scotland (SFS)
2nd Feb 2017
European Directives set a change in scope for the award of reserved contracts that have been transposed into Scottish Law. Whilst there has been some uncertainty created by the change of definition from 50% disabled to 30% disadvantaged, (as there is no singular authoritative definition of ‘disadvantaged’), it is important that we give contracting authorities the support and confidence to use this provision, since it allows them to fulfil their own social objectives in helping more disabled and disadvantaged people into work.
The definition of those businesses who can benefit from access to reserved contracts is in two parts:
Firstly, a supported business’ primary aim is the social and professional integration of disabled or disadvantaged persons. This is an entirely new condition. This may be evidenced in the Memorandum and Articles of Association, or similar documentation that underpin the formation of the business.
Secondly, at least 30% of the employees of those businesses should be disabled or disadvantaged. We realise that the precise proportion of staff may fluctuate over time. However, with this requirement being underpinned by the main aim of the business being the social and professional integration of disabled and disadvantaged people, then assurances should be evidenced through the HR and resourcing policies of the business. In order to be considered for a reserved contract, businesses will need to fulfil both parts of the definition.
For some years now, the Scottish Government has encouraged every public body to reserve at least one contract for supported businesses. SFS has supported this. Scottish Govt introduced a framework for supported businesses a few years back and we are now seeing a few supported businesses winning business through the framework. Given the change in definition, SFS is undertaking a survey to establish whether other social enterprises are now within the scope of being able to be part of reserved contracts.
The Supported Business reserved contract provision is set at EU level under procurement directives and so member states choose to adopt this (or not).
Scotland adopted it previously (in 2006) when the definition was more stringent (i.e. 50% of workforce had to be ‘disabled’) BUT whilst the use of these provisions existed, Scotland’s approach, of late, has been cautionary although the Public Procurement Reform Programme did improve process, practices and awareness of their use. Despite this, there still remains a lack of clarity (amongst some buyers) about the legalities of using Article 20 as its now known and a lack of awareness of how to do so.
Apart from the register work, SFS is also doing some joint work with Scotland Excel and some local authorities to help them to use this opportunity!