4. Barriers and Opportunities in Public Sector Food Procurement
4.1.1 Barriers
There have been a number of studies exploring barriers to public sector food procurement.
The National Audit Office report ( NAO, 2006) highlights further barriers to sustainable procurement in the UK: cost (i.e., value for money is perceived to be inconsistent with paying a premium to achieve sustainability objectives); knowledge (or lack of awareness of the need for procuring sustainably and lack of information about the most sustainable options); a risk-averse culture that hinders the adoption of innovative approaches; legal issues (uncertainty as to what can and cannot be done under the existing rules on public procurement); lack of leadership, or ownership and accountability, at all governance levels; inertia (lack of personal or organizational incentives to drive change).
Table 8 summarises constraints for procurers and producers in entering the market in Scotland in Scotland.
Table 8: Constraints in Public Sector Food Procurement
Procurers
(in buying Scottish produce) | Producers
(in supplying the public sector) |
|---|
Scottish products are often beyond public sector budgets | Prices offered by the public sector are extremely low and restrict suppliers profit margins: other sectors are more appealing |
Admin burden of contracting with smaller suppliers | Complexity of the supply chains (who buys what and when?) |
Foodservice industry can offer better prices through economies of scale | Complex distribution requirements (location, timing and frequency of deliveries) |
Foodservice industry simplifies the procurement process and offers a superior distribution service | (for smaller businesses) there is confusion regarding access to tenders |
LAs within a consortium are constrained by the need to buy "off the contract" | The burden of the tendering process itself |
Insufficient quantities of Scottish produce to meet demand | |
In some cases variable quality of Scottish produce vs. imported supplies | |
Confusion regarding what is "allowed" under EU rules | |
EU legislation tends to favour larger companies although it is not intended to do so | |
Source: DTZ (2005)
More recent research has confirmed that although there are some success stories, many local producers are deterred from supplying to public sector customers because of the perception that they are principally concerned about price (Brown and Geldard, 2008).
4.1.2 Overcoming barriers
The evaluation of East Ayrshire pilot study found that the following lessons could be learned:
- More training for catering staff, both with regard to using fresh, seasonal produce and encouraging healthy eating.
- More education was needed for children and parents to encourage uptake of the scheme.
- More flexibility of menus and an appreciation of the local context.
Cardiff University have researched and analysed examples of best practice in the field of sustainable procurement, both within the UK and abroad. They found that all the barriers to sustainable (especially local) food procurement exist only in countries (like the UK and the US) where cost-based contracting tends to be extolled over all other values.
4.1.3 Opportunities and Incentives
Although the Scottish Executive commissioned research from 2005 ( DTZ 2005) found that there are generally more constraints in getting Scottish produce to the public sector marketplace than there are incentives to do so, incentives do exist.
Table 8: Incentives for Public Sector Food Procurement
Demand-side | Supply-side |
|---|
Procurers
(in buying Scottish produce) | Producers
(in supplying the public sector) |
|---|
Achieving local procurement goals | Steady year-round business |
More sustainable local food chains | Reliable payment |
| The wide geographical spread of delivery points means that picking up additional business can be cost effective. |
| Healthy eating agenda creating a demand for new products |
| Some products suited to a shorter supply chain e.g. fruit & veg, milk, bread, eggs |
The public sector is only one customer but the appeal of the public sector business takes a number of forms:
- It presents steady demand which can counter-balance seasonal demand from the hospitality industry,
- Demand is channelled through several contracts which reduces the impact on the supplier if a contract is lost and awarded to another firm,
- Contracts for the more remote/ rural parts of the country can open up further business opportunities in these areas, i.e. it can make a delivery run more viable if hospitality/ retail deliveries can be secured in the area on the backbone of the schools/ hospital supplies ( DTZ, 2005)
The main opportunity is the fact that procurers are under pressure to open up opportunities for small and medium-sized businesses. As a result, the public sector food market should give small local producers more opportunities.