BLUEPRINT Model - Procurement

Summary notes

This page aims to provide insight and inspiration from the BLUEPRINT to a Circular Economy Project (BLUEPRINT Project) and industry leading organisations. Its objective is to support local authority procurement officers to take steps to become more circular. This page will:

Outline the role of local authority procurement in a circular economy.
Introduce the procurement hierarchy and circular business models.
Consider opportunities to embed circular economy principles in procurement policies, strategies and plans.
Touch on the importance of circular economy expertise in public procurement.
Detail how procurement processes and communications can accelerate the move to a more circular economy.
Share opportunities and examples for circular procurement from local authority project partners: Brighton & Hove City Council, Essex County Council, and Kent County Council.
Summarise monitoring and evaluation tools.

Introduction

As populations grow, so will the demand for products, services and already constrained natural resources. The circular economy proposes a more resilient economic system that can thrive in the long term and supports a healthy environment.[1] In 2021/22 public sector spending in the UK was £379 billion[2], and €567 billion[3] in France. While the waste management industry is implementing circular practices to move ‘stuff’ away from disposal to being kept in use for longer, embedding circular economy principles in public procurement can lead the way in rethinking how the goods and services are purchased in the first place.

By definition, circular procurement is “the process by which public authorities purchase works, goods or services that seek to contribute to closed energy and material loops within supply chains, while minimising, and in the best case avoiding, negative environmental impacts and waste creation across their whole life-cycle.”[4] For the purpose of this report, circular procurement and circular economy in procurement have the same meaning.

As part of The Paris Agreement (an international treaty on climate change), countries around the world agreed to work towards reducing their greenhouse gas emissions to ‘net zero’ by around 2050. Both the UK[5] and France[6] have committed to this target. Embedding circular economy principles in public procurement provides a unique opportunity to kickstart circularity within localities. This is thanks to the purchasing power involved in procuring goods and services through suppliers and supply chains. Circular procurement also supports the United Nations Sustainable Development Goals (SDGs), particularly Goal 12 – Responsible Consumption and Production, which call for action by all countries.[7]

Before reading about procurement and the circular economy further, it is recommended that your local authority completes the BLUEPRINT Baselining Activity. This will provide an indicator on where you are now and support local authorities in identifying opportunities to improve circularity.

The procurement hierarchy

The waste hierarchy and the procurement hierarchy have many similarities as depicted in figure 1. The challenges are also similar, with a need to move away from end of life and disposal, to only purchasing what we need and keeping those products in use. A shift towards a circular economy (by considering end of life and disposal at the beginning of a product’s lifecycle when purchasing goods and services) will have benefits for procurement as well as waste management.

Figure 1: Waste and Procurement Hierarchy (Source: Procuring the Future, DEFRA).[8]

Procuring products and services that use circular business models (sometimes referred to as circular economy strategies) can help to close resource loops and slow the flow of materials through these loops. This involves looking beyond short-term needs and considering the long-term impacts of purchases. This could be through redesigning the way products are made, eliminating the need for products, keeping products and materials in use, and as a last resort, recycling products and materials (figure 2).

Figure 2: Circular Business Models (Source: Business Models for the Circular Economy, OECD).[9]

An example of the ‘reuse’ circular business model could be through procuring products as a service – the concept of selling the outcome of a product, rather than the product itself. For example, purchasing light rather than lightbulbs. One of the main benefits is the supplier is incentivised to keep the product in good working order for longer and therefore products tend to be designed in a more circular way. The risk also tends to sit with the supplier, providing the customer with assurance that the product will meet the intended use for the contracted period. The supplier is often responsible for maintenance, repair or product replacement, with goods returned to the supplier at the end of the contract.

There may be concerns over the cost of procuring products as a service, as the cost may not be fixed and could change over time, or there may be low confidence in the quality of repair services. Contracts for products as a service, for second-hand goods, and for repair services would need to set out clear expectations and Key Performance Indicators (KPIs) for the products or services of a supplier. This can help to balance the risk and provide greater assurance to the local authority.

The role of policies, strategies and plans in procurement

International, national and local policies influence how local authorities procure goods and services. When done correctly, circular economy principles embedded in procurement policies, strategies and plans will:

- Challenge the need to procure in the first place.

- Consider products as a service.

- Encourage reuse and repair of existing products.

Procurement can therefore be viewed in a dynamic and adaptive way that procures a solution which meets the intended purpose.[10]

Procurement policies, strategies, and plans can promote circular business models and practices that encourage whole-system thinking to ensure the full lifecycle of goods and services are considered before procuring them. While low-cost goods can be desirable in the short term, it is important to consider whether it meets the intended use and if costs will be incurred in other areas such as waste management for the cost of disposal. This can lead to cost savings in the long term, new sources of innovation, improved customer experience, and more resilient services.[11]

Circular procurement standards, frameworks and guidance

There are many great sources of information on circular procurement standards, frameworks and guidance that you may find useful to view. Please note, there is a charge to access the ISO and BS standards, the remaining links are publicly available resources.

International Organization for Standardization - ISO20400:2017: the Sustainable Procurement Standard provides guidance on integrating sustainability within procurement, “intended for stakeholders involved in, or impacted by, procurement decisions and processes”.[12]
Mandatory Green Public Procurement (GPP): the European Commissioner proposed a list of key actions including “Mandatory GPP criteria and targets in sectoral legislation and phasing-in mandatory reporting on GPP”.[13]
The British Standards Institution - BS 8001: 2017: a framework for implementing the principles of the circular economy in organisations.[14]
The Government Buying Standards (GBS): the Department for Environment, Food and Rural Affairs outlined the standards by which products and services are procured and make up the government procurement policy. They are mandatory for central government departments, but uptake is encouraged for the wider public sector.
National TOMs Framework: updated in 2021, this was created as a solution for the Social Value Act, aiming to support organisations who wish to embed social value into their business processes. There are two measures directly related to the circular economy:
- NT 69 - Support provided internally and to micro, small and medium enterprises (MSMEs) and voluntary, community and social enterprises (VCSEs) within the supply chain to adopt circular economy solutions
- NT 71 - Value of service provided by local partnerships that implement circular economy solutions (specifically measuring donation of materials that can be reuse)
UK Procurement Policy Notes (PPNs): sets out information and guidance for public bodies, issued by the UK and devolved government. It sets out the latest best practice for public sector procurement. UK local authorities can access a full list of PPNs on the UK government website.
The Anti-Waste towards a Circular Economy (AGEC) law 2020 (a French law) has two articles about procurement:
- Article 51 requires the demolition and renovation (for more than 1,000 m2 or industrial use) to have a common diagnostic called “Products Equipment Materials and Waste”. The climate law requires 25% of bio-based materials or low carbon materials to be used in constructions.
- Article 58 identified 17 kinds of products local authorities can buy, where they are obliged to have at least 20% of reuse or recycled materials. In Brittany this is about 30%.
The Institut National de l’Économie Circulaire, Métropole du Grand Paris and the Observatoire des Achats Responsables published an operational guide to integrate circular economy into purchasing strategies for private and public buyers.

Circular economy expertise and resource

To embed circular economy principles in local authority procurement requires individuals or teams in procurement to have circular economy expertise, and an understanding of the value of the circular economy to public procurement.

Some local authorities may have a sustainability or environmental officer role in procurement. However, for many local authorities this is not the case. A good starting place is to understand whether procurement teams have circular economy expertise or if other areas of your local authority have this expertise (such as waste management). Some local authorities may work together to share this expertise by having a procurement officer with circular economy expertise that works part time across a few local authorities.

Ensuring your local authority has circular economy expertise in procurement can help to create a groundswell for the circular economy in your local area neighbourhood and beyond. The right training can make a big difference – with external training solutions available on the market, such as ReLondon’s Embed Circular Procurement Training.

ReLondon Procurement Training

Funded as part of the BLUEPRINT to a Circular Economy Project, procurement officers from each of the local authority partners (Essex County Council, Kent County Council, and Brighton & Hove City Council) attended training to learn more about how to Embed Circular Procurement – an exercise delivered by ReLondon.

The training was tailored to the groups’ current procurement activities and how the circular economy can support future aspirations. An initial one-hour session was held virtually, helping to draw this out with a lead officer attending from each local authority. A group decision was made to hold an in-person full-day session at ReLondon’s offices in London, as this was a central location for all partners.

Partners were requested to provide information to ReLondon ahead of the training session to allow the specialist adviser (Mervyn Jones) to create a programme of topics and activities bespoke to the group. The attendance and level of engagement on the day is testament to the expertise shared by ReLondon’s procurement specialist on the day. The key takeaway is that the procurement officers can now share insights with colleagues and to help embed circular economy principles in procurement. It is also hoped that expertise will continue to be shared across the partner local authorities to accelerate progress.

Visit ReLondon’s Embed Circular Procurement Training to find out more.

Procurement processes and communications

Internal and external communication is essential to support circular procurement in local authority procurement. Colleagues need to know how to purchase goods and services in a more circular way, and suppliers need to know in advance of tenders what they can do to meet tender requirements.

Circular economy requirements should be included in all tenders where applicable – this could be mandatory for some areas over a certain value threshold. It is important to consider the market’s ability to respond to requirements; the bar may need to be raised over time to help the market to respond with a successful bid. A minimum weighting could also be applied to tenders for circular economy principles. The local authority project partners agreed 10% or more weighting could be appropriate.

Internal stakeholder engagement

Colleagues in procurement can influence local authority policies, strategies and plans and can create communications and best practice related to purchasing goods and services. However, the responsibility for purchasing is often widespread across the organisation, with most people working at a local authority having responsibility for purchasing goods and services at some stage. Regular, clear and easy to find information on procurement processes is essential to ensure compliance, value-for-money and that procured goods and services meet requirements.

While this may seem obvious, in large organisations this can be challenging to achieve. Support and guidance for higher spend purchases are often in place, however, guidance for lower spend decisions can be more difficult to find. There are a range of ways to do this – from hosting information on the intranet, setting out processes for procuring goods and services, sharing information through colleague communication channels, and hosting online or in-person training.

Balancing priorities can be challenging, while environmental departments often consider environmental impacts, other service areas may be focused on other priorities, such as cost. Stakeholder engagement can help officers, leaders and members to consider the longer-term or wider implications of purchases and grow support for circular economy considerations in procurement. By doing more now, our local authorities can gain in the future. However, these initiatives are not always easy to get approved. Quantifying social value (such as by using the National TOMs framework) can help to balance the argument in favour of more circular products and services. Also, carrying out some small, lower risk activities to build an evidence base can act as a steppingstone towards bigger projects.

Supplier engagement

For suppliers to be able to respond to new circular economy or sustainability requirements in tenders, and for local authorities to receive successful bids from suppliers, early supplier engagement is essential.

Early supplier engagement on tender requirement will help:

- Local authorities to set expectations.

- Allow suppliers the opportunity to deliver products or services in line with requirements.

- To raise any challenges suppliers may have.

- Provide an opportunity for local authorities to offer guidance on how suppliers could meet this requirement and reduce the chance of failed bids.

One of the ways Essex County Council are doing this is through Carbon Reduction Plans for procurements over £100,000. Although in the early stages, pre-market engagement is being designed to help support suppliers to submit successful bids.

The RACI Matrix

The RACI Matrix is a simple technique used to identify stakeholder responsibility and can be a useful tool to plan engagement activities: RACI stands for:

Responsible: a manager or team member who is directly responsible for successfully completing a project task.
Accountable: the person with final authority over the successful completion of the specific task or deliverable.
Consulted: someone with unique insight the team will consult.
Informed: a client or executive who isn’t directly involved, but you should keep up to speed.[15]

Circular economy interventions

Brighton & Hove City Council (BHCC), Essex County Council (ECC) and Kent County Council (KCC) have shared examples on how they have embedded circular economy principles in procurement.

Brighton & Hove City Council circular procurement case study

The procurement team at Brighton & Hove City Council (BHCC) has been considering how processes and interventions can support their organisation to become more circular. From working in partnership with other local authorities to share expertise and create an Environmentally Sustainable Procurement Policy, to processes that support colleagues to purchase goods and services in a more circular way.

Carbon Neutral Programme

Brighton & Hove City Council declared a Climate and Biodiversity Emergency in December 2018. As a result, it has published the Carbon Neutral 2030 Programme and created a cross-party 2030 Carbon Neutral Member Working Group. The programme sets out actions and interventions to achieve net zero emissions.

View Brighton & Hove City Council’s Carbon Neutral Programme.

As part of this programme, guidance has been created to support project managers when assessing their projects for sustainability and climate impacts to ensure projects support the Carbon Neutral 2030 Programme commitments.

In addition, the council has published its Circular Economy Route Map and action plan, with a section on procuring for a circular city.

View Brighton & Hove Circular Economy Route Map 2020 to 2035.

Environmentally Sustainable Procurement Policy

Brighton & Hove City Council, Surrey County Council and East Sussex County Council collaborated to create a common “Environmentally Sustainable Procurement Policy”, to be adopted by all three local authorities. The partnership helped to simplify understanding for suppliers in the region with a strong focus on the circular economy. In addition, Brighton & Hove City Council has adopted a default minimum 10% environmental sustainability quality criteria in all relevant tenders.

View Brighton & Hove City Council’s Environmentally Sustainable Procurement Policy case study.

BHCC also has guidance for businesses in making sustainable purchasing decisions. The guidance includes information on the circular economy and how this relates to the council’s corporate plan.

View Brighton & Hove City Council’s guidance on the Climate information for businesses page.

Staff benefits contract

Thanks to feedback from employees at Brighton & Hove City Council, the contract for their staff benefits portal was reviewed and the portal provider was supported to add more local circular options to the platform.

Find out more about how Brighton & Hove City Council’s staff benefits contract now better supports a circular economy.

Essex County Council circular procurement case study

The procurement team at Essex County Council (ECC) has been focusing on understanding current carbon emissions for scope 1, 2 and 3 emissions, and implementing carbon reduction measures, as well as embedding social value in tenders.

Carbon Saving Trust

The procurement team at Essex County Council worked with the Carbon Saving Trust to create a Carbon Footprint Report for scope 3 emissions for 2020-21. It found that over 97% of ECC’s emissions were from scope 3 emissions.

Scope 1 emissions are direct emissions from a company’s owned or controlled sources.
Scope 2 emissions are from indirect emissions from a company’s purchased energy.
Scope 3 emissions are from indirect value chain emissions.[16]

The report found that 95% of emissions come from Purchased Goods and Service, and Capital Goods. This highlights the opportunity that procurement services and working with suppliers play in reducing emissions.

View ECC’s Carbon Footprint Report for scope 3 emissions 2020/21.

Carbon Reduction Plans

In response to the Government’s Procurement Policy Note 06/21: Taking account of Carbon Reduction Plans in the procurement of major government contracts, guidance on Carbon Reduction Plans for ECC procurement staff were created. The guidance defines:

- What is meant by scope 1, 2 and 3 emissions.

- When a Carbon Reduction Plan is required (figure 3).

- Tools which may help organisations to measure carbon.

- And includes an example Carbon Reduction Plan template.

Figure 3: ECC’s Carbon Reduction Plan Decision Tree (Source Essex County Council’s Carbon Reduction Plan buyer’s guidance).

National Themes, Outcomes and Measures

Like many local authorities, ECC has adopted the Local Government Association’s National Social Value Taskforce ‘National Themes, Outcomes and Measures’, or National TOMs, method of classifying and evaluating social value. The National TOMs have been adapted to fit in with the county’s priorities based on Essex County Council Organisation Strategy. The set of measures used by Essex County Council is called the ECC TOMs.[17]

Social value can be a good way to measure the ‘value’ beyond the financial cost of a contract to consider how procured goods and services might improve the economic, social and environmental wellbeing of an area.[18]

ECC has created and published content on the online Essex Provider Hub to support suppliers who wish to find guidance on social value and procurement processes. Visit the Essex Provider Hub for more information.

Equalities Comprehensive Impact Assessment

The Equalities Comprehensive Impact Assessment framework, which is currently being reviewed, is undertaken at ECC for new policies or a change in policy to ensure good decision-making processes. This digital form (hosted on the intranet) asks colleagues a range of questions covering topics on accessibility and equality, and now includes climate considerations. Climate considerations examples include asking whether an activity will create waste, whether recyclability and recycling provision has been considered, and whether locally sourced and second-hand goods could be used

Kent County Council circular procurement case study

The procurement team at Kent County Council (KCC) has been working on a number of activities that support a circular economy, namely the Ethical and Sustainable Procurement Policy, the Social Value Exchange, and employee guidance on sustainable procurement.

Ethical and Sustainable Procurement Policy

KCC are currently working on developing an Ethical and Sustainable Procurement Policy, which will include many aspects on ethics and sustainability such as environmental management, net zero and circular economy principles.

The policy will set out to staff and the public the commitments that KCC will make and procedures that KCC will take to ensure principles of ethics and sustainability are applied to all procurements in future.

The policy will be public facing to hold KCC accountable to residents of Kent and their suppliers. The policy is currently in the engagement stage of the project, working with teams across the council to ensure it is fit for purpose with the right level of ambition. The policy will commence through governance in early 2023.

In conjunction with the policy, KCC has worked with other local authorities in Kent to produce a Joint Market Position Statement that communicates their intentions to embed net zero in procurement projects to suppliers. This will help to put the policy into practice in terms of the environmental sustainability elements. The Joint Market Position Statement will also go through governance and be published together with the policy.

Social Value Exchange

The Social Value Exchange is a system that has been procured to support staff to effectively seek, value and monitor social value initiatives that are included as part of procurements and contracts with suppliers.

The Social Value Exchange can seek initiatives on different types of social value. The Social Value officer has been working with the system supplier to enhance the system to seek environmental and net zero related initiatives. This will make it easier for staff to use the system to secure environmental benefits through procurements with suppliers. The Social Value officer is currently working on trialling the system with active procurements.

Guidance to employees about sustainable and circular procurement

In 2022, the Commissioning Standards team at KCC produced a suite of guidance, tools and templates to help current staff carry out commissioning and procurement projects and measured against good practice standards. One objective for this work was to routinely include aspects relating to ethics and sustainability in guidance and templates to ensure that staff are naturally and consistently considering them when they carry out projects.

Considerations such as environmental management, waste reduction, better use of materials and net zero have been included where relevant throughout all documentation. The Commissioning Analysis template and guidance are one of the first documents staff will use in the process that has a whole section specifically for environmental analysis.

View Kent County Council’s Commissioning Analysis Template and Kent County Councils Commissioning Analysis Guidance.

Monitoring and evaluation

One of the first steps to monitoring and evaluating progress, as outlined by the steps of the BLUEPRINT to a Circular Economy Model, is to set a baseline. This allows for progress to be then tracked. One of the ways Essex County Council did this, was to work with the Carbon Saving Trust to create a Carbon Footprint Report.

Monitoring and evaluation of circular economy requirements in procurement can often be overlooked. It is something local authorities are striving towards. However, the officer time required to measure the varying KPIs outlined in a successful bid, coupled with the sheer number of contracts each local authority will have in place, means that this can be challenging.

When contracts are being awarded KPIs should be outlined. Reporting frequency and level of detail should also be agreed to ensure accountability and that the product or service is delivered as arranged to meet the intended purpose.

Carbon accounting

While DEFRA provides conversion factors used to calculate ‘activity data’ such as for tonnes of waste disposed, for procurement, ‘spend data’ can be used to measure an organisation’s greenhouse gas emissions. The Local Government Association (LGA) has created reporting guidance for local authorities which can be used to capture scope 3 emissions.

Visit the LGA’s Climate Change: reporting guidance for local authorities page.

Social value

As previously mentioned, reporting on social value can be a good way to measure the ‘value’ beyond the financial cost of a contract, such as through the social and environmental wellbeing of an area.

Visit the Social Value Portal to find out more about the National TOM’s framework.

Research, reports and presentations

Many key organisations lead the way for a circular economy, including:

ADEME (the French Environment and Energy Management Agency) – provides expertise and advice to businesses, local authorities, communities, government bodies and the public to reduce greenhouse gas emissions.
CRESS (Chambre Régionale de l’Économie Sociale et Solidaire) – the Social Economy House of Brittany, a non-profit organisation financed by public authorities to develop the social economy and the circular economy, in helping social enterprises.
Ellen MacArthur Foundation – provides online resources covering all aspects of the circular economy, including procurement such as their Circular Economy Procurement: a Framework for Cities.
Local Government Association (LGA) – is a national membership body for local authorities working on behalf of member councils to support, promote and improve local government.
ReLondon – is a partnership of the Mayor of London and the London boroughs to improve waste and resource management and transform the city into a leading low carbon circular economy. ReLondon shares procurement expertise such as its Embed Circular Procurement Training.
Zero Waste Scotland – is a not-for-profit environmental organisation, using evidence and insight to inform policy, and motivate individuals and businesses to embrace the environmental, economic, and social benefits of a circular economy.
Crown commercial service (CSS) – is a public procurement organisation in the UK using commercial expertise to help buyers in central government and across the public and third sectors to make purchases.
ESPO – is a public sector owned professional buying organisation (PBO), specialising in providing a wide range of goods and services to the public sector.