Scottish Government

Context

The National Food Policy

In Autumn 2007, the Scottish Parliament agreed with the Scottish Government that a national food policy was needed for Scotland.

Subsequently, a discussion document "Choosing the Right Ingredients" was launched in January 2008. This allowed anyone who wished to respond to have their say on what is important to Scots and Scotland in terms of food produced and food consumed.

As a result the plan to produce a food and drink policy was announced in June 2008 with the intention to "promote Scotland's sustainable economic growth by ensuring that the Scottish Government's focus in relation to food and drink, and in particular its work with Scotland's food and drink industries address quality, health and wellbeing and environmental sustainability and recognises the need for access to affordable food for all."

To ensure consistency and coherence on such a broad spectrum of cross-cutting objectives a high level Food and Drink Leadership Forum was set up led by the Cabinet Secretary for Rural Affairs and the Environment, Richard Lochhead MSP. Five workstreams were also established to provide information to the Leadership Forum.

http://www.scotland.gov.uk/Topics/Business-Industry/Food-Industry/national-strategy

Workstream 4, 'Walking the Talk'

There is an emerging consensus that a national policy would help ensure a more joined-up approach to food in Scotland, covering every part of the food chain from farm gate to plate. The Public Sector guided by a Food Strategy can play an important role in leading change.

'Walking the Talk', is aimed at cultivating an agile and proactive public sector which understands food and drink and which supports sustainable economic growth. This report considers how food producers, suppliers and purchasers can contribute to the delivery of sustainable development and how small and medium sized enterprises can compete successfully for public sector food contracts. This is particularly important in food procurement terms given the predominance of SMEs in the food industry in Scotland. The workstream involved producers and producer organisations, processors, foodservice distributors, the hospitality sector, public sector procurement specialists and caterers to inform future guidance to Scotland's public sector on becoming an exemplar for sustainable growth.

Terms of Reference

This workstream is about ' helping public sector food procurement in Scotland become an exemplar for ' sustainable economic growth in terms of quality, health and wellbeing, affordability and sustainability'.

The following objectives were allocated to the group;

1. That Public Sector Organisations should in the future make greater use of 'Sustainable Food Procurement - Guidance for Public Purchasers' that is issued.

2. To promote increased understanding in the public sector of Scottish Government policies and their impact on food procurement including in the delivery of catering services.

3. That there is an increased awareness in the private sector of public procurement processes.

The Scope of Work

In a forward looking and wide ranging way the review process sought both to challenge and to elicit thoughts, experience and future proposals from, food producers, farmers and farming organisations, the fishing industry, academics, catering and procurement staff in the NHS, the Scottish Prison Service, local authorities, Scotland Excel, private sector catering companies and the major purchaser and distributor of food servicing Scotland.

A Public Sector Procurement Steering Group was established and met on three occasions between November and March with around 15 invited delegates at each meeting (see Appendix 7 for a list of worksteam members). Unfortunately, CoSLA were unable to attend WS4 meetings but asked to receive minutes and any other output. Through the Chair of workstream 4 of the Association of Public Service Excellence ( APSE) were represented.

Three regional workshops were held in Dumfries, Perth and Inverness where seventy five people representing the key stakeholders attended (see Appendix 8 for a list of organisations represented). Discussions at these meetings focussed on ten key questions specific to the for the public sector five key questions relevant to producers ( Appendix 1). Following the first meeting some individual public procurement officers and producers later supplemented their contribution at the meetings in writing.

In-depth face to face meetings were undertaken with key organisations as follows:

• Public sector public procurement representatives: Scottish Prison Service and NHS
• Principal procurement organisation for Local Authorities: Scotland Excel,
• Major private sector catering companies: Sodexo and Aramark
• Major purchaser and distributor of food to the public sector: 3663 and Brakes.

As a result of these meetings the participants forwarded responses to key questions which are reproduced Appendix 5

Information gathering at formal events:

• A UN sponsored meeting on a Bio-regional response to public sector food procurement organised by CIFAL,
• A meeting of the Highlands and Island Food and Drink Forum
• A Soil Association Food for Life event
• The annual seminar of the Sustainable Scotland Network
• The Association of Public Service Excellence, Conference 'Healthy Communities'.

General discussions were undertakenand advice sought from a number of sources including:

• The Scottish Agricultural Organisation Society ( SAOS) whose main purpose is to strengthen the profitability, competitiveness and sustainability of Scotland's food and drink, and related industries
• Jim Fairlie, a food producer
• Various Government departments, notably the Scottish Government's Procurement Directorate as well as the Scottish Government's Environment, Health and Education Directorates

Research was also commissioned and/or undertaken by the Scottish Government's Rural and Environment Research and Analysis Directorate ( RERAD) and the following reports produced http://www.scotland.gov.uk/Topics/Research/by-topic/Agri-Fisheries-Rural

• Public Sector Food Procurement in Scotland An overview of the evidence
• Public Sector expenditure on food and drink in Scotland

Information produced through Alimenterra a European Sustainable Food Network was also used along with a wide range of other research produced on the subject of sustainable food and public sector food procurement.

Note: This report and its recommendations is therefore a synthesis by the author as Chair of workstream 4, Public Sector Food Procurement, from the information gathered and from the approaches described above rather than the definitive view from workstream 4.

A Perspective

'From farm to fork the conventional food chain constitutes one of the greatest challenges to sustainable development today. This awesome logistical phenomenon prides itself on having liberated food production from nature and her seasons and its proudest boast is that it produces cheap food at ever lower prices. On a narrow economic reckoning this may be true but on a wider more sustainable measure the conventional food chain contains hidden costs that show up elsewhere - in burgeoning health bills, in environmental damage and in economic costs to producers and rural economies' Morgan and Morley, 2002.

There are three key messages that resonate from the literature and the many discussions which took place during fact finding on the subject of public sector food procurement for this workstream.

• Food is different
  Because there is the 'economic value' and there are 'food values' that are (equally) relevant;
• The public sector is open for business
  Food sourced in Scotland is currently 34% of expenditure; by local authorites;
• Winning hearts and minds is key to success
  Clear policy, clear guidance, and strong leadership by Government in the area of public sector food procurement would be welcomed.

It is recognised that Scotland has a less than satisfactory cultural view of food. Obesity levels in Scotland are among the highest in the world and diet related disease brings with it major public health issues and financial burdens. In Scotland there is mounting public concern about how food is actually produced, the intrinsic nutritional quality food, and food safety. The public sector through its social and welfare catering activity has to be at the heart of the appeal to address these issues through a new paradigm of sustainable food procurement.

Sustainable Food Strategies are now a critical area of public policy and food should be afforded a prominence by national and local government where food is regarded as strategically important in its own right, rather than a less significant component of a major policy area such as education, health or economic development.

The era of cheap food and plentiful choice is coming to an end. Big changes are looming for the global food supply chain through the future consequences of oil production having peaked, with the inevitable impact on future energy costs, and the effects of climate change. Demand for food is rising. By 2050 it is estimated that global food production will have to double to meet population growth and more immediately as the western diet pervades India and China increasing global competition for food. Swathes of productive agricultural land are being lost for the production of bio-fuels. In recent years droughts in grain producing countries have increased the pressure on staple supplies. The challenge is for the National Food and Drink Policy, to develop in this policy area what makes sense in others too by linking economy, society, and the environment with the delivery of Sustainable Development.

A Food Strategy involving the public sector as a proponent of change will place Scotland at the forefront of developments by being one of the first nations to bring coherence to a range of food relevant policy issues integrated with the economy, agriculture, fisheries, health, social justice, education, and the environment by providing;

• Stimulus for the local and regional economy of Scotland
• Improving efficiency and security in the food supply chain
• Reducing Scotland's ecological footprint
• Promoting social justice, health and environmental improvement through the provision of good quality sustainably produced food, and by
• Engendering cognitive and cultural change with an increased awareness of the value of food to the health of the individual, the environment and sustainable communities.

A sustainable food strategy for Scotland also fits in with the priority areas given by the European Commission which are based on the Lisbon, Leipzig and Gothenburg agendas which address threats to human health, climate change, the management of natural resources, sustainable transport, economic and social renewal and growth of jobs.

The following are priorities for Scotland and the whole of the UK:

• Sustainable consumption and production: achieving more with less. This includes reducing the inefficient use of resources, looking at the impact of products and materials across their whole lifecycle and encouraging people to think about the social and environmental consequences of their purchasing choices.
• Climate change and energy: securing a profound change in the way we generate and use energy, and reducing greenhouse gas emissions.
• Natural resource protection and environmental enhancement: protecting our natural resources, building a better understanding of environmental limits, and improving the quality of the environment.
• Sustainable communities: creating communities that embody the principles of sustainable development locally.

The 'well-being powers' of local authorities can be seen as the cascading of sustainable development to a local level. Including social issues in procurement can be a way of achieving sustainable development objectives as described above.

Examples of relevant policies in Scotland include: the Schools (Health Promotion and Nutrition) (Scotland) Act 2007, Healthy Eating Active Living an action plan to improve diet, increase physical activity and tackle obesity, Equally Well, Concordat and Single Outcome Agreements ( SOA) with Local Authorities, the Climate Change Bill, the Government's economic strategy. Also notable policy guidance on" Integrating sustainable development into public procurement of food and catering services" (2004) and "National Catering and Nutrition Specification for Hospital Food in Scotland (2008).

A Food Strategy which brings these policies and supplementary guidance together can produce significant benefit to the economy of Scotland and the health and well-being of people.

What is Sustainable Food?

The definition of sustainable food is complex. Sustainability in food purchase does not necessarily always imply local suppliers, but is more likely to imply local food in the case of provision of fresh, seasonal and unprocessed food.

Sustainable food procurement is generally considered to be good for business, economic regeneration, social cohesion, and the environment.

The United Nations World Commission on Environment and Development defines sustainability as "ensuring that we meet our needs without compromising the ability of future generations to meet their own needs." From a purchasing perspective, this means considering not only the cost and quality of products, but also social and environmental factors associated with each purchase. As a practical matter, it requires seeking both 'value for money' and to uphold 'values' inherent in food while assuring security, continuity of supply and food service requirements.

In 2005 the Sustainable Development Commission defined sustainable food and drink in the following terms;

• Safe, healthy and nutritious food for consumers in shops, restaurants, schools, and Hospitals;
• Providing a viable livelihood for farmers, processors and retailers, whose employees enjoy a safe and hygienic working environment, whether in the UK or overseas;
• Respecting biophysical and environmental limits in its production and processing, while reducing energy consumption and improving the wider environment; it also respects the highest standards of animal health and welfare, compatible with the production of affordable food for all sectors of society;
• Supporting rural economies and the diversity of rural culture, in particular through an emphasis on local products that keep food miles to a minimum;
• Meeting the needs of less well-off people.

Sustainable development has become the most powerful ideological tool to catalyse attention on the social and ecological conditions necessary to support human life at a certain level of wellbeing through future generations (Earth Council, 1994).

Ethical traceability advocates a shift in thinking from 'value for money' to 'values for money' by considering of food in relation to human health, animal welfare, methods of production and environmental impacts, terms of trade (fair price, etc), quality (nutrition, taste, composition), origin and place, trust, voice (participation),transparency, and working conditions . Coff Korthals, Barling (2007) Source: Ethical Traceability

Developing a Sustainable Purchasing Policy in the Public Sector

'Sustainable Procurement is a process whereby organisations meet their needs for goods and services, works and utilities in a way that achieves value for money on a whole life basis in terms of generating benefits not only to the organisation, but also to society and the economy, whilst minimising damage to the environment.

A successful sustainable food purchasing policy will be fully integrated with the overall goals and objectives of the institution. It will clearly state coherence with corporate social and environmental goals, identify a procurement strategy, and commit resources to its strategy. It will also set targets and timelines, and establish means for evaluating progress and making course corrections.

By sustainable food we mean food that, through it's production, processing, distribution, sale and consumption provides a wide range of associated benefits, such as good quality food, food which promotes good health and education, protects the environment, avoids unnecessary use of natural resources, and contributes towards economic development. In other words food that supports sustainable development.

Local Food

For the purposes of this report local food refers primarily to fresh food from Scotland as a whole rather than sub-regional food from within Scotland. This is because food production is concentrated on a few regions in Scotland. However it should also be recognised that food and drinks produced and processed in Scotland and elsewhere are sold locally and benefit the Scottish economy.

Public bodies cannot discriminate in favour of domestic producers. Public procurement law regulates the purchasing by public sector bodies of contracts for goods, works or services. It is designed to open up the EU's public procurement market to competition to prevent "buy national" policies and to promote the free movement of goods and services. It does not allow public bodies to give greater weight to locally produced food and drink or to suppliers based in any particular location, at any time during the procurement process.

While sustainability in food purchases does not necessarily always equate directly to "local" suppliers in many instances it does particularly in the case of provision of fresh seasonal unprocessed food. It is however possible to specify such qualities as fresh, seasonal, organic and certified produce if it is set out in a non-discriminatory way. It might be possible, for example, to set a timescale from harvest to delivery, provided that the timescale is reasonable and not likely to discriminate against non-local suppliers.

Micro Small and Medium Enterprises ( SMEs)

Since the average European enterprise employs no more than six people, most can be considered as SMEs. The EC definition of a small or medium sized enterprise is contained in European Commission Recommendation 2003/361/ EC. The definition requires that the enterprise will;

• have less than 250 employees and
• have either an annual turnover not exceeding €50 million
• and /or an annual balance sheet total not exceeding €43 million.

SMEs are particularly important in the food industry where the majority of food businesses are SME's.

A Food Strategy Involving the Public Sector

Public services should be high quality, continually improving, efficient and responsive to local people's needs. The Public Sector through food provided in its hospitals, prisons, and the education sector has a uniquely multi faceted role in promoting sustainable development through; health, social justice, economic growth, reducing harmful environmental impacts and education.

The Scottish Government has a single Purpose -"To focus government and public services on creating a more successful country, with opportunities for all of Scotland to flourish, through increasing sustainable economic growth". The Government Economic Strategy sets out a clear and achievable way forward that will deliver the Purpose and secure Scottish success over the long term. Higher sustainable economic growth is the key which can unlock Scotland's full potential and create benefits for all our people.

A challenging set of high level Purpose targets, that include specific benchmarks, are designed to track progress in boosting Scotland's economic performance and ensure that the benefits of higher growth are sustainable and shared by all of Scotland. These are supported by the National Outcomes Strategic Objectives of Wealthier and Fairer, Smarter, Safer and Stronger, Healthier and Greener.

High level Purpose Targets.

The contribution which Public Sector Food procurement can make is relevant to all 15 stated National Outcomes which support the Purpose Targets particularly employment opportunities; young people as effective contributors and responsible citizens; that children should have the best start in life; that we all should live; longer and have healthier lives; tackling inequalities and improved life chances for those at risk; strong resilient communities; the environmental impact of consumption and production; and high quality public services.

In terms of Economic Growth and Productivity the Scottish Government's aim to raise the GDP growth rate to the UK level by 2011 will require an increased contribution from a food industry. A Public Sector Food Strategy can help promote the economic value of Sustainable local food production in Scotland and can produce a range of social and environmental benefits. The purpose target entitled Solidarity aims to increase overall income and the proportion of income earned by the three lowest income deciles as a group. Participation to maintain Scotland's position on labour market as the top performing country in the UK can be assisted by an increase in the diversity of food businesses to offer a wider choice to suppliers and consumers, making local food more accessible and affordable, facilitating a greater retention of income within communities through increased use of locally produced food within the public sector.

The prospect that Cohesion within Scotland can narrow the gap in participation between Scotland's best and worst performing regions by 2017. In this, food increasingly has a defining role in reflecting local culture. At the same time there is a crisis in the financial viability of farming, the age profile of farmers and in the seafood industry and disappearing skills. There is a growing understanding among governments, business, environmentalists, the agricultural community, health professionals and academics that the current model of food production and the effect on the health of the population and climate change, is unsustainable.

A healthy Population is essential and the target is to match average European population growth over the period from 2007 to 2017 supported by increased healthy life expectancy in Scotland. The poor nutritional value of food currently consumed by a proportion of the Scottish population is partly responsible for the rise in obesity, cardiovascular disease, and diabetes. The current total annual cost to the NHS of overweight and obesity has been estimated at £1 billion and the total impact on employment as £10 billion. Predictions are that if left untreated by 2050 60% of males and 50% of females in the UK population could be obese with cost to the NHS rising to £6.5 billion with the wider cost to society being at £45.5 billion (Foresight report 2007).

The Sustainability target is to reduce emissions over the period to 2011 and then incrementally by 80 percent by 2050. Food production, harvest, transportation, preparation, consumption and waste, account for 30 % of green house gas emissions which cause global warming and this underlines why there is a need for a Food Strategy within which 'Green Issues' are addressed. The use of food produced in an efficient sustainable way which is sensitive to the energy required in its production leads logically towards greater use of seasonal, unprocessed or lightly processed and possibly organic food. At a time when it is predicted that the problem of food shortages and the rising economic cost of food rivals that of climate change, local food production can become significant in ensuring food security within Scotland while also enhancing opportunities for education, training and employment.

Note: Other than fisheries, within the 45 National Indicators there is no explicit reference of the importance of food or drink, and its significance for 'sustainable economic growth in terms of quality, health and wellbeing, affordability and sustainability'. It is recommended that this be reviewed in order to support the implementation of the National Food and Drink Policy.

The Regulatory Framework

Directive 2004/18/ EC of the European Parliament and The Council 2004

The coordination of procedures for the award of public works contracts, public supply contracts and public service contracts.

The adoption of the EU sustainable development strategy at the Gothenburg European Council in 2001 marked a turning point. The aim was to promote economic growth and social cohesion while paying due regard to environmental protection. It implies that environmental objectives will need to be weighed against their economic and social impacts so that 'win-win' solutions should as far as possible be devised for the economy, employment and environment. In 2002, the Council and European Parliament adopted the set out the EU environmental roadmap for the next 10 years and identifying four priority areas where action is urgently needed: climate change, nature and biodiversity, resource management, and environment and health. The public procurement directives adopted in 2004 specifically mention in their recitals and provisions the possibilities for adopting environmental considerations in technical specifications selection and award criteria, and contract performance clauses. Contracting authorities are legally allowed to include social and environmental criteria in the evaluation and award of contracts as long as the criteria are linked to the subject matter of the contract as stated in Recital 1 and Article 26 of the Directive.

Directive 2004/18/ EC of the European Parliament and of the Council which was adopted into Scottish legislation in the Public Contracts and Utilities Contracts (Scotland) Amendment Regulations, 2007.

Green Public Procurement

Means that contracting authorities take into account environmental elements when procuring goods, services and works at all stages of the process and within the entire life-cycle of procured goods.

Sustainable Public Procurement

Means that contracting authorities take into account all economic, social and environmental objectives of sustainable development when procuring goods, services and works, at all stages of the process.

An Overview of Scottish Government Guidance on Integrating Sustainable Development into Procurement of Food and Catering Services'

The local authority representatives who took part in the survey were asked if they were aware of this guidance. Around half of the respondents said they were aware of it and half responded they were unaware. Some of the respondents aware of the guidance stated that it influences their food and drink procurement however only for certain types of contracts and not all.

Scottish Government policy is that public sector buyers should take account of relevant sustainable development objectives when awarding contracts for food and catering services. Adoption is critical if public sector procurement in Scotland is indeed to become an 'exemplar of sustainable economic growth' in the food sector. The benefits are holistic and cross cutting. Food is a key driver of sustainable growth and security for Scotland. Public sector organisations should be required to lead by example in the implementation the Food Strategy. Otherwise lowest price will most often override the delivery of sustainable development through the procurement process.

In taking forward the concept of sustainable food procurement the then Scottish Executive published guidance on "Integrating sustainable development into procurement of food and catering services" (2004).

The document stated:

" While it is not possible to discriminate in favour of local suppliers, public sector buyers can support local sourcing by considering and removing obstacles to tendering by local suppliers, especially as this may help to achieve value for money. Given the opportunity to tender, local suppliers may have a competitive edge over competitors from further afield as a result of lower overheads, e.g. reduced transport costs."

The guidance contains an action sheet with recommendations to integrate sustainable development considerations into food procurement:

• By specifying that food has been produced in accordance with assurance schemes (or equivalent standards)
• Specifying organic food
• Encouraging small local producers/suppliers to collaborate on organising collective responses to demand
• Making sure that potential suppliers know how to identify and compete for public sector contracts
• Specifying fresh produce, seasonal produce that can be grown in the UK or EU and fewer exotic fruit and vegetables that local growers are unable to produce, where such requirements meet users' needs
• Where purchasing is decentralised (e.g. health trusts and education authorities and schools) structuring contracts in relatively small sizes
• Tendering more frequently for smaller quantities and establishing more flexible specifications (e.g. for more limited ranges of produce per contract) where this takes account of EU aggregation rules and is consistent with value for money and public expenditure requirements.

Unfortunately its adoption was not widespread, perhaps because it was issued ahead of its time and this is discussed later in this report where it is recommended that this guidance is reviewed and as it will become a key part of the National Food Strategy consideration should be given to this becoming statutory guidance.