Third sector accounts for £1 in every £5 of Scottish councils' procurement spend

Gurjit Degun
14 August 2014

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14 August 2014 | Gurjit Degun

Scottish councils are increasingly purchasing from the third sector, spending an average of £33 million during 2012/13.

Research from Ready for Business - a consortium that helps public bodies engage with the third sector - showed the third sector is now a “key supplier” to councils in Scotland. It explained the purchasing power of local authorities in Scotland is “substantial” – between £110 million and £453 million annually for the five councils examined.

On average, each of the surveyed councils purchased services from 443 third sector suppliers. Each council spent an average of £33 million during 2012/13, with the largest council spending £57 million. This means third sector accounts for around £1 in every £5 of Scottish council procurement spend.

The report, Purchasing from the third sector in Scotland, also revealed that Scottish local authorities are conducting an increasing amount of business with the third sector. “For example, one council had increased the value of purchasing from the sector by 25 per cent over the preceding six years, compared with an overall uplift in its purchasing of 16 per cent over the same period,” the report said.

According to the research, the average council in Scotland has a procurement spend of £169 million, and 27 per cent of this is spent with local suppliers. An average of 38 per cent of procurement spend on the third sector is accounted for by local suppliers. The report also said 43 per cent of commissioned social care services are delivered by the third sector.

“These findings are consistent with our research elsewhere which shows that public sector purchasers in Scotland are increasingly aware of the role of the third sector, increasingly value its contribution, and are increasingly doing business with the sector,” the report explained.

The report said the third sector is established in categories such as social care and housing management, so there is an “opportunity to increase its share of business across a number of fields”.

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