Spending Scotland's Money Ethically

Posted by Jamie Livingstone Head of Oxfam Scotland

7th Jan 2014

They say money talks. If that's true, the way we spend public cash should send a clear message.

Right now, Scotland's public sector spends over £9 billion per year on goods and services.They form a crucial part of the public services we all use and rely on. But how ethically are they sourced? 

While examples of good practice do exist, too often the goods and services we procure at the public's expense are done so the basis of cost or, more precisely, which is cheapest in the short term.

Whether it be social care, large building projects or school meals - there is a lack of recognition of broader, but important concerns - including what is good for workers, the environment and local communities. In each of these areas preventative spending secures long-term dividends.

That is why Oxfam is calling for sustainable procurement to be the core purpose of the Procurement Reform Bill, which is currently making its way through the Scottish Parliament.

We're doing so alongside the Scottish Council for Voluntary Organisations, the Scottish Fair Trade Forum, the Scottish Trade Unions Congress and Stop Climate Chaos Scotland.

Together we've agreed a set of 10 priorities we want to see addressed through the Bill.

These include action to cut greenhouse gas emissions, improve employment standards, tackle tax dodging and promote fair trade.

Fundamentally, we must use procurement to stimulate a better economy, not just faster economic growth without regard to its quality or distribution.

Currently, the economy is not delivering for the poorest communities in Scotland.

Even before the financial crisis we saw economic growth rates averaging 2% a year for 30 years, yet throughout that period a significant proportion of our children remained in poverty.

For too long the benefits of economic growth have failed to 'trickle-down' to those at the bottom. While there is a growing recognition of in-work poverty, 80% of jobs created  in the UK since 2010 pay less than £7.95 an hour. We are still pursuing a model of economic development premised on low-pay.

The Procurement Bill could help change that, but not as it currently stands.

The living wage, for example, is not mentioned at all in the bill. Ensuring that public money doesn't go to employers that pay poverty wages has been estimated to cost an additional £20 million. From a £9 billion pot, this seems a small price to pay for the social and economic benefits a living wage would bring.

As well as addressing poverty in the UK, ethical and responsible procurement has the potential to transform lives around the world. The opportunity to sell products for a fair price and to work in safe and decent conditions could help millions work their way out of poverty. The Procurement Bill should be used to help Scotland cement its status as a Fair Trade Nation and to lead the way in ethical procurement.

Unless the Government makes significant changes to the Procurement Reform Bill, we'll fail to realise the potential of public money to promote the development of a better, fairer economy.

So yes, money does talk. Let's just make sure it says the right thing and speaks to a better Scotland.

Blog post written by Jamie Livingstone

Head of Oxfam Scotland

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