Agenda item

Report by the Strategic Director of Finance and Customer Services.

Recommendations:

That Cabinet:

1. Formalise the support of the UK Steel Charter as the successor to the Sustainable British Steel Charter.

2. Approve the updated Ethical Procurement Policy for 2025.

At the Chair’s invitation the Cabinet Member for Finance and Community Safety introduced the report noting the following:

• The Council spent approximately £425 million annually with third-party suppliers and contractors across a wide range of goods, works, and services.
• Procurement was seen as a key enabler for the Council to deliver its strategic objectives, using its purchasing power to drive social, economic, and environmental improvements for residents and society at large.
• The Council must comply with the Procurement Act 2023, which provided the legal framework for public procurement.
• The Ethical Procurement Policy consolidated a range of measures, decisions, and commitments the Council had made over the years to promote ethical practices.
• Originally approved in January 2020, the policy was reviewed on a three-year cycle.
• The aim was to create a comprehensive umbrella policy that centralised all ethical procurement-related decisions and practices.
• One notable update was the Council’s intention to sign the UK Steel Charter, which replaces the previously signed Sustainable British Steel Charter.

The Strategic Director for Finance and Customer Services made the following points to provide additional context:

• The policy was now reviewed annually, although most changes were typically minor (e.g., updates to dates or legislation titles).
• The UK Steel Charter update was the main reason the policy was brought to members for review this time.
• The policy included a commitment to support the charter through the pre-procurement business case process, ensuring alignment with the Council’s ethical and sustainability goals.

The Chair invited members of the Overview and Scrutiny Management Board (OSMB) to raise questions and queries on the points raised earlier.

Councillor Blackham queried if anyone had assessed how much the Ethical Procurement Policy was costing the Council, considering that requiring suppliers to meet ethical standards was likely to increase their costs? The Assistant Director Financial Services acknowledged that the ethical requirements likely increased costs, but it was extremely difficult to quantify. Procurement tenders did not break down costs by ethical components, so the Council could not isolate or measure the financial impact of these requirements.

Councillor Blackham followed up by asking if the Council was now centralising procurement? The Strategic Director for Finance and Customer Services explained that the procurement process (rules, regulations, tendering) was centralised, but actual purchasing was done by individual services who knew their needs. Centralisation of procurement professionals had been in place since 2016. The Strategic Director for Finance and Customer Services went on to clarify that while purchasing was decentralised, the Council did aggregate spend where possible (e.g. IT, food contracts) to secure better value.

Councillor Yasseen asked how the Council ethically screened what was included in the policy? Who decided what went in, and was there a framework? The Assistant Director Financial Services explained that major procurements were guided by a business case process, which included ethical considerations. The Council used government lists (e.g. for modern slavery) and internal assessments to guide decisions.  The Service Manager explained that before tenders went to market, a horizon scan and market assessment was conducted. Ethical requirements were embedded into tender documents and evaluated through method statement questions.

In her supplementary question Councillor Yasseen raised concerns about a democratic deficit. She referenced the Council’s support for a Palestine motion and a large public petition, suggesting that civic mandates should influence procurement policy. The Strategic Director for Finance and Customer Services explained that officers could consider civic mandates, but the policy was ultimately set by Cabinet. Any civic input must be legally actionable within procurement law. The Assistant Director Financial Services indicated the Council could not legally exclude suppliers based on country of origin or political issues due to national procurement legislation. 

In a follow-up Councillor Yasseen argued that civic mandates, like the modern slavery motion, had been included before and should be considered again. The Leader noted that all elements in the policy were based on previous Council decisions. There was currently no legally compliant way to exclude suppliers based on geopolitical issues (e.g. Gaza). If a legal route was found, the Council was open to considering it.

Councillor A Carter asked if the Council could ensure it was not using suppliers who funded or supported conflicts (e.g. Israel-Palestine, Ukraine-Russia, fracking, fossil fuels)? The Leader explained the Council used tools like the Social Value Policy to encourage ethical practices but could not legally exclude suppliers based on such criteria. The Council was open to exploring options if legal mechanisms become available.

In a follow-up question Councillor A Carter asked if the Council would lobby national government to allow more flexibility in procurement decisions? The Leader indicated he had written to the government following the petition, requesting more flexibility for councils in procurement decisions.

The Chair asked how the Ethical Procurement Policy aligned with the Council’s Climate Change and Social Value policies? The Leader indicated there was some overlap, especially in encouraging suppliers to reduce carbon emissions, but the policies were separate in terms of decision-making processes.

Councillor McKiernan requested a correction in the document: “Sheffield, Yorkshire, Mayoral Combined Authority” should be “South Yorkshire, Mayoral Combined Authority”.

Councillor Allen suggested a minor wording correction: “bed to the Council’s partners” should be “embed with”.

In conclusion the Cabinet Member for Finance and Community Safety said the Council was open to feedback from scrutiny and would continue to report back. The updated UK Steel Charter would be signed before September.

Resolved: That the Overview and Scrutiny Management Board supported the recommendations that Cabinet:

1.    Formalise the support of the UK Steel Charter as the successor to the Sustainable British Steel Charter.

2.    Approve the updated Ethical Procurement Policy for 2025.