Public Sector Food Procurement in Scotland: An Overview of Current Evidence

This overview was prepared as part of the evidence base in support of the development of Scotland‟s Food and Drink Policy. It informed Workstream 4 on Public Sector Food Procurement. It summarises current evidence but is not a systematic review of the literature.

Rural and Environment Analytical Services Rural and Environment Research and Analysis Directorate

The Scottish Government 2009

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Contents Executive Summary ................................................................................................... 3 1. Introduction ...................................................................................................... 5

1.1 Background .................................................................................................. 5 1.2 Defining sustainable food ............................................................................. 5 1.3 The food supply chain to public bodies ........................................................ 6 1.4 Types of Procurement .................................................................................. 6 1.5 Structure of paper ........................................................................................ 7

2. Potential Benefits of Sustainable Food Procurement in the Public Sector ....... 8

2.1 Types of benefit ........................................................................................... 8 2.2 Environmental .............................................................................................. 9 2.3 Economic ..................................................................................................... 9 2.4 Social ......................................................................................................... 10

3. The Size of the Market: Demand and Supply ................................................ 12

3.1 Expenditure on public sector food procurement in Scotland ...................... 12 3.2 Local authority practice on procuring sustainable food .............................. 16 3.3 Demand for public sector food ................................................................... 18 3.4 Capacity to Supply Primary Produce ......................................................... 18

4. Barriers and Opportunities in Public Sector Food Procurement .................... 22 5. Good practice examples ................................................................................ 25 Annex A: References ............................................................................................... 27 Annex B: Agricultural Production by Local Authority ................................................ 29

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Executive Summary Introduction

There has been considerable interest in the role of public sector food procurement in providing opportunities for local and Scottish produce.

Sustainability in food procurement 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.

The three largest parts of the public sector purchasing food and drink are education (including social work), health and prisons.

The food supply chain to public bodies is complex and primary producers can supply direct to public sector bodies or indirectly via wholesalers or manufacturers.

Benefits

The case for sustainable food procurement is based around a wider range of environmental, economic and social benefits.

The evidence on these benefits is uncertain and in some cases overestimated. For example, food miles as a concept is increasingly being challenged. Environmental benefits do not use life cycle analysis and economic models used often assume local economy is closed and therefore overestimate the benefits.

There is stronger evidence that sustainable food procurement can contribute to the regeneration of rural economies and should encourage the growth of the Small and Medium Sized Enterprises sector and can lead to environmental benefits in the form of reductions in packaging and waste.

Size of market

Public sector expenditure on food and drink procurement is £129.3 million which represents approximately a third of the total catering and canteens market.

Around three quarters of total spend is by local authorities (education, social work), health and prisons. Other public bodies account for the remainder of spending but are more disparate.

Frozen food accounts for a third of spending by local authorities.

Local authorities spend 34% on Scottish produce. Scottish produce is particularly predominant for bread, backer supplies, meat, poultry and fish milk and dairy in local authorities.

Smaller suppliers account for 55% of the market for local authorities (compared to 30% for NHS and 11% for prisons)

Local authorities indicate a desire to support local and regional economies with “Supporting local and regional economies” the most important criterion when local authorities are asked to rank sustainable food criteria in order of importance.

Awareness of guidelines on Sustainable Food Procurement is low – with around half of local authorities aware.

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Demand and Supply

There are nearly 700,000 pupils in local authority schools in Scotland and 2,720 local authority schools in Scotland.

The production of primary produce in Scotland is concentrated on a regional basis. The main areas of agricultural production are the North East (cereals and livestock) and South West (dairy). The top three local authorities account for between 47% and 85% of output.

This suggests that the focus of public sector food procurement should be on sourcing Scottish produce rather than local produce as it will be difficult for some local authorities to source locally.

Barriers and opportunities

For suppliers, there is evidence that barriers exist which mean that SMEs cannot always compete for contracts on an equal footing. For smaller businesses there is confusion regarding access to tenders and the tendering process itself can be a burden.

For procurers, there is evidence that Scottish products are often beyond public sector budgets and that there are insufficient quantities of Scottish produce to meet demand. There is also an administrative burden of contracting with smaller suppliers.

There are opportunities for producers including the fact that some products suited to a shorter supply chain e.g. fruit & vegetables, milk, bread, eggs and the Healthy eating agenda creating a demand for new products

Good practice

There is evidence of creative procurement practice in Italy and Scotland.

In Italy the school meals programme is more integrated into education and incorporates teaching children about the seasonality of foods and the school.

In Scotland, the East Ayrshire school meals programme has adopted creative food procurement practice by specifying requirements on time scale from harvest to delivery and fair trade, seasonal attributes.

Recommendations

Based on an assessment of the evidence, the following can be recommended:

o There is a need for clarity of definition of sustainable food o There is an evidence gap on the use of life cycle analysis to estimate

the environmental benefits of local food o Supply constraints mean that the public sector food procurement

should recognise that sourcing Scottish produce rather than local food is more potential

o There is a need for improved monitoring of the use of Scottish produce by food type as well as to monitor the number of SMEs being awarded contracts. This could focus on local authority procurement practice in the first instance as it is the largest sector.

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1. Introduction 1.1 Background There has been considerable interest in the role of public sector food procurement in providing opportunities for local and Scottish produce. The interest stems in part from recognition of the role of the public sector food procurement market in shortening the supply chain. It also reflects a growing interest in sustainability issues in the food chain more generally. For example, Morgan and Morley (2002) state that

“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”.

1.2 Defining sustainable food The definition of sustainable food is a complex one. Rimmington and Carlton Smith (2006) set out the following criteria for defining sustainable food (based on Sources: Derived from Sustainable Development Commission, Sustain, DEFRA)

Promoting good health through a balanced diet and safe food

Accessible; socially inclusive, affordable and reflecting local communities, culture and seasonality

Supporting the local economy by buying food from as close by as possible

Sustainable farming, involving high environmental standards and reduced energy consumption

Promoting animal welfare and valuing nature and biodiversity

Fair prices, fair trade and ethical employment in UK and Overseas

Progressing sustainable food procurement will involve trade-offs. For example, sourcing organic food and fair trade food often involves transporting food over longer distances (Rimmington and Carlton Smith, 2006). 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. Indeed, evidence suggests that „local‟ may not always be desirable. For example, Morgan and Sonnino (2008) quote the paper by Born and Purcell (2006) which refers to the „local trap‟ and argues that localisation goes against democracy and equity. There is further evidence that the local food may not always be best and the benefits are uncertain (Edwards Jones et al, 2006). In developing public sector food procurement policy, there is a need to be clear about the definition of sustainable food to be used.

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1.3 The food supply chain to public bodies The three largest parts of the public sector are education (including social work), health and prisons. The food supply chain to public bodies is complex and is shown in Figure 1. Primary producers can supply direct to public sector bodies or indirectly via wholesalers or manufacturers.

The supply chains also differ by type of food. The purchase of fruit and vegetables tends to be more decentralised than with other foods. This is due to the seasonality of the products and attendant variations in price. For the same reasons, contracts for fruit and vegetables can be much shorter. Milk is a bulky item with a short shelf-life and tends to be distributed directly by the supplier, who consolidates their product prior to distribution. Other food groups tend to be supplied to the public sector through wholesalers or distributors (DTZ, 2005). This suggests that there are more opportunities for local suppliers for fruit and vegetables and milk.

Figure 1: Supplying Food to Public Bodies:

1.4 Types of Procurement In Scotland, the public procurement of goods and services are organised into four categories of contract. Table 1 shows the categorisation of procurement contracts. Food and drink procurement contracts are categorised as B, C and C1.

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Table 1: Public Procurement Categorisation

Category Definition and organisations

Category A National Procurement

Procurement Scotland

Category B Sector Specific

Scotland Excel

NHS National Procurement

Scottish Prison Service

Category C1 Regional

Tayside Consortium etc.

Category C Local

Source: DTZ (2009) 1.5 Structure of paper This paper summarises the available evidence.

Section 2 summarises the evidence on the potential benefits of sustainable/local food procurement

Section 3 describes the size of the market in Scotland and the capacity for sustainable/local food and the amount of Scottish/local food sourced

Sector 4 summarises the evidence on barriers to entering the market

Section 5 concludes with some gaps on evidence and recommendations Updated expenditure estimates were commissioned for this study and are published separately (DTZ, 2009). The list of references is presented in Annex A.

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2. Potential Benefits of Sustainable Food Procurement in the Public Sector 2.1 Types of benefit The case for sustainable food procurement in the public sector are discussed in MacLeod and Scott (2007), Morgan and Morley (2002) and Morgan and Sonnino (2008). There is further evidence from evaluations of existing sustainable food procurement programmes. For example, the evaluation of a Council initiative to introduce local/organic food into schools in East Ayrshire (ADAS 2006, Footprint Consulting 2008). Table 2 summarises the evidence on type of benefits. The following sections discuss each in more detail. Table 2: Examples of Type of Benefit from Sustainable Food Procurement

Type of Benefit

Example Source Comments

Environmental Reduction in food miles as a result of shorter supply chains

MacLeod and Scott (2007), ADAS (2006)

Food miles as a concept increasingly being challenged (Edwards Jones et al, 2008)

Reduction in green house gas emissions

Yorkshire Forward (2005)

Few robust estimates. Lifecycle analysis required but very few examples

Reduction in packaging/waste

ADAS (2006)

Footprint consulting (2008)

Waste reduction contribute to sustainable consumption

Economic Local economic benefits from buying food locally

Thatcher and Sharp (2008)

Footprint consulting (2008)

Evidence on economic benefits using LM3 multiplier model but model overestimate benefits as it assumes local economies are „closed‟

Local jobs Footprint consulting (2008)

Difficult to attribute directly to food procurement.

Supporting Small and Medium sized Enterprises

ADAS (2006)

HMT (2008)

Highlights the role of procurement in accelerating the SME economic engine

Social Health outcomes (reduced future health conditions)

Footprint consulting (2008)

Uncertainty over how much can be attributed to local food initiative

Higher nutrition value Powys Public Procurement Project (2003)

Higher nutritional values of local food uncertain (Edwards Jones et al (2008)

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Higher quality ingredients

ADAS (2006) Although overall cost of ingredients rose

Food security MacLeod M and Scott J (2007), Morgan and Morley (2002)

2.2 Environmental DEFRA‟s Public Sector Food Procurement Initiative states that:

“There is no firm evidence at present that local sourcing has lower environmental impacts than efficient national distribution networks”.

This supports the work of Edwards Jones et al (2008) who argue that food miles are a poor indicator of environmental benefits. Using local suppliers will only reduce one element of transport costs associated with food production. A report by Yorkshire Forward, the regional development agency for the region, aimed to provide a clear picture of the current food requirements of the public sector in the region, the region‟s ability to meet this demand and to identify an efficient, environmentally beneficial distribution network to connect the producer and customer. The methodology included the use of 12 case studies and modelled distribution systems. It concluded that there was potential for substantial and carbon savings through changes to existing distribution systems. Macleod and Scott (2007) refer to CO2 emissions from different modes of food transport noting that transport by road emits more CO2 than by flight/ship. It also notes that transportation is only one stage in the life cycle of a particular food item and recommends the use of Life Cycle Analysis as a method of calculating environmental impacts of product at each stage production. ADAS (2006) report environmental benefits in the form of reduction in packaging/waste although the amount is not quantified. To date, therefore, the environmental benefits of local/sustainable food are unclear. Only through life cycle assessment can the benefits of local food be assessed (Edwards Jones et al, 2008). The potential benefits in terms of waste reduction have received less attention. 2.3 Economic 2.3.1 Local economy DEFRA‟s Public Sector Food Procurement Initiative states that:

„There is evidence that local sourcing can “contribute” to the regeneration of rural economies – the maintenance of high and stable levels of economic growth and employment being a key objective of sustainable development.‟

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Estimating the economic benefits is, however, complex. The most commonly used tool to estimate the economic impact is the LM3 multiplier model from the New Economics Foundation. The model can be used to show that local economies can be aided by retaining spending in the local area. The model can estimate the amount of money contributing to the local economy for every £1 spent through multiplier analysis. It should be noted, however, that it overestimates the economic benefits as it assumes each local economy is a closed economy whereas in practice economies import and export goods.

The model has been used more widely to estimate the Economic Footprint of Public Services by APSE. In the context of food procurement, Thatcher and Sharp (2008) used the LM3 tool to measure economic benefits of the Cornwall food initiative.

The study by footprint consulting used a similar multiplier type model to estimate the economic benefits associated with the Food for Life School Meals project in East Ayrshire.

2.3.2 Employment As part of their study, Powys Public Procurement Project (2003) commissioned a Health Impact Assessment which also included estimates of jobs. It concluded that the procurement of local food would have a significant impact on the generation of additional local employment. The evaluation of the pilot of the East Ayrshire project found that little in the way of extra jobs to date, the Council officers hope that the true employment benefits to the community would become far more evident once the pilot were rolled out (ADAS, 2006).

The study by footprint consulting also used the multiplier type model to estimate the jobs associated with the Food for Life School Meals project in East Ayrshire.

2.3.3 Small and Medium Sized Enterprises The Evaluation of the East Ayrshire pilot scheme found that all producers were Small and Medium Sized Enterprises (SMEs) (ADAS, 2006). Public sector food procurement therefore is important to the development of food SMEs. Generally, SMEs play a key role in the economy and are a source of future growth because of the fact that there are a large number of small firms (HMT, 2008). In general terms, they can offer better value for money and quality of service (HMT, 2008). 2.4 Social 2.4.1 Food Security Morgan and Morley (2002) argue that the two ends of the food chain (producers and consumers) have become divorced from each other and need to be reconnected. Re-localising the food chain is one way to reconnect it. The authors argue that this concept is not about restricting access to overseas products that cannot be grown in the UK but its about increasing access to locally produced food by devising a system that makes local food available accessible and affordable. Food procurement is therefore part of the food security debate.

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2.4.2 Nutrition As part of their study, Powys Public Procurement Project (2003) commissioned a Health Impact Assessment. It concluded that the procurement of local food would have a significant impact on the nutritional impact of locally produced and processed (including organic) food. The report also included a recommendation that specific, tangible links between health and food and farming strategies should be identified and published to reinforce public awareness of the links between sustainable farming practices and healthier communities (in the widest sense). Morgan and Morley (2002) also argue that locally sourced nutritious food offers a number of benefits - the multiple dividend including healthier diets. Determining improvements in nutrition arising from local/sustainable food is complex. Edwards Jones et al (2008) note that the nutritional quality of fruits and vegetables is determined by a range of characteristics. Nutritional quality relates to essential nutrients and biologically active compounds. Both of these aspects of quality may be affected by the various activities that occur across the food supply chain but they are not straightforward to estimate. 2.4.3 Health outcomes The study by Footprint Consulting, estimates the reduced future health conditions associated with the Food for Life School Meals project in East Ayrshire. Reductions in future health conditions associated with cancer and coronary heart disease and stroke were estimated. There is, however, a degree of uncertainty over how many of these health outcomes can be attributed to the project.

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3. The Size of the Market: Demand and Supply 3.1 Expenditure on public sector food procurement in Scotland 3.1.1 Total expenditure The evidence on expenditure is taken from a recently completed study by DTZ (DTZ, 2009) and is published separately. The total food and drink expenditure on food and drink in the public sector was £129.3 million in 2007/08. This includes all public bodies (including police, fire stations). The three largest parts of the public sector are education (including social work), health and prisons and these are studied in more detail. It has not been possible to conduct in-depth analysis of the other parts of the public sector given their disparate nature. Public sector expenditure on food and drink procurement represents approximately a third of the total catering and canteens market.1 In total, £99.2 million was spent on food and drink in the education and social work, health and prison sectors in 2007/08, which accounts for 77% of total public sector expenditure. Local authority spend for education and social work accounts for 75%. 3.1.2 Expenditure by type of food provision Expenditure by type of food provision provides an indication of the opportunities for local suppliers producing fresh food. Opportunities are greatest for fruit and vegetables. Meat, poultry and fish and milk/dairy products (tables 3 local authorities and table 4 NHS). Frozen food accounts for 30% of total cost of food and drink procurement for local authorities. Table 3: Type of Provision and Share of Total Cost – Local Authorities

Type of provision2 Share of total cost

Frozen 30.5%

Provisions/Pre-packed/Ambient 22.3%

Fruit and Vegetables 12.3%

Drinks 8.8%

Meat, Poultry and Fish 8.0%

Milk and Dairy 5.9%

Confectionary 4.6%

Bread and Bakery 4.1%

Chilled goods 2.6%

Catering and Sundries 1.0%

TOTAL 100%

Source: DTZ Local authority survey, DTZ (2009)

1 In 2006 the total value of sales in the catering and canteens market in Scotland was £339m (SIC code 55.5, source Annual

Business Inquiry). 2 Food type definitions vary and there are overlays between different types. For example one local authority may include

confectionary under a general provisions or grocery category while another might not.

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Table 4: Type and Share of Provision through NSS NHS Scotland Procurement

Type of provision Share of total cost

General provisions 28%

Frozen food 15%

Fresh meat and poultry 14%

Milk 11%

Chilled and dairy 9%

Frozen readymade 7%

Fresh fruit and prepared vegetables 7%

Bread 5%

Prepared sandwiches 4%

TOTAL 100%

Source: NHS NSS, National Procurement Division, DTZ (2009)

3.1.3 Expenditure on small suppliers Expenditure by contract type gives an indication of the extent to which procurers are using small suppliers and food service companies. Generally, local authorities spend the highest share of expenditure on food and drink procurement on small suppliers (those with less than 2% off market share) compared to NHS and Prisons sectors. The foodservice industry dominates in the NHS and Prisons food and drink procurement markets. Figure 2 shows that, for local authorities, 55% of the local authority food and drink expenditure is sourced through relatively small-scale suppliers. This suggests that much of the food and drink procurement is managed and administered locally by the local authorities, and there are few large contracts for the education and social work sectors, with Brake Bros, 3663 and Robert Wiseman and Sons representing the largest contractors. Figure 2: Local Authority Spend by Supplier

Source: Scottish Procurement Information Hub, DTZ, 2009

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Figure 3 shows that, for NHS, around 30% of food and drink expenditure is sourced through relatively small-scale suppliers. Figure 3: NHS Catering Spend by Supplier

Source: Scottish Procurement Information Hub, DTZ, 2009

Figure 4 shows that, for prisons, around 11% of food and drink expenditure is sourced through relatively small-scale suppliers. Figure 4: Prison Catering Spend by Supplier

Source: Scottish Procurement Information Hub, DTZ, 2009

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3.1.4 Expenditure on Scottish produce Table 5 shows the estimated shares of Scottish produce in local authorities. These estimates are derived from a survey of local authorities (DTZ, 2009). Scottish produce is particularly predominant for bread, backer supplies, meat, poultry and fish milk and dairy. The frozen food and pre-packed categories, which represent more than half of total expenditure, have low shares of Scottish produce. As noted above, these contracts are smaller in value. Table 5: Estimated Shares of Scottish Produce – Local Authorities

Type of provision Estimated share (where stated)

Average share

Milk and Dairy Mostly 100% 97%

Bread and Bakery High, 85-100% 92%

Meat, Poultry and Fish High, 75-100% 88%

Fruit and Vegetables Ranges from 10-100% 57%

Drinks/Soft drinks Ranges from 5-100% 45%

Frozen Low, 5-45% 14%

Provisions/Pre-packed/Ambient

Low, 0-25% 9%

TOTAL - 34%

Source: DTZ (2009)

3.1.5 Monitoring use of Scottish produce The DTZ study notes that information on the share of Scottish produce is currently limited. The larger the contract, the more difficult it is for both suppliers and buyers to identify the share. The contracts which are administered on a local level by local authorities or NHS Boards tend to be of a smaller scale, and are commonly sourced from a Scottish or local supplier. Due to these disparities it is advisable to monitor Scottish share by food type as these tend to correspond with size of contract and type of supplier. It is less problematic to identify and record the Scottish share for locally administered contracts. However, for sector specific contracts the individual suppliers may need to be contacted, or Scotland Excel, the administrator of these contracts, who may have further information on Scottish produce. This is consistent with the approach adopted by Defra (2008) where the proportion of domestically produced food by Government departments is monitored by product type e.g. meat, vegetable etc. The amount of Scottish produce used will also depend on the capacity of local authorities to supply local food (see section 4).

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3.2 Local authority practice on procuring sustainable food The DTZ local authority survey, found the following (DTZ, 2009)

Around half of the local authority respondents said they were aware of the guidance – „Integrating sustainable development into procurement of food and catering services‟ – and some of those stated that it influences their food and drink procurement, however only for certain types of contracts and not all.

Assurance standards and nutrition are most commonly stated as criteria considered by local authorities when food and drink contracts are awarded. Fair trade and organic criteria are least influential when awarding contracts. (see figure 5)

Supporting local and regional economies emerges as the most important criterion when local authorities are asked to rank criteria in order of importance. Figure 6 suggests a desire to support local and regional economies

Sustainable procurement is considered and implemented where possible, but with cost pressures in local authorities some find it difficult to source certain food and drink types which meet sustainability criteria.

Figure 5: Sustainable Food Criteria Considered by Local Authorities When Awarding Food and Drink Contracts

Source: DTZ Local authority survey

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Figure 6: Sustainable Food Criteria Ranked by Order of Importance

Source: DTZ Local authority survey

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3.3 Demand for public sector food The three largest parts of the public sector account for most of the demand for public sector food in Scotland: Schools

There are nearly 700,000 pupils in local authority schools in Scotland. In 2007, there were 375,485 primary school pupils in Scotland with 308,974 secondary pupils and 6,387 in special school pupils.

There are 2,720 local authority schools in Scotland (primary, secondary and special).

NHS

The Scottish health sector consists of fourteen territorial and two hospital boards. National Services Scotland (NSS) is responsible for the national procurement of hospital food in Scotland and is an umbrella body covering all the NHS Boards.

There are around 200 NHS hospitals in Scotland (includes small hospitals).

The total number of hospital discharges (episodes) were 1,339,000 in the year ending 31 March 2008.

The number of elective inpatient discharges (episodes) were 198,000 in 2008.

The number of emergency inpatient discharges (episodes) were 530,000 in 2008.

The number of day case discharges (episodes) were 398,000 in 2008 Prisons

There are on average around 8,000 inmates in Scottish prisons.

There are 16 prisons in Scotland (http://www.sps.gov.uk//Default.aspx?DocumentID=8f9b6e6e-8483-4019-b75e-e73064869ce2)

3.4 Capacity to Supply Primary Produce This section explores the capacity of local authorities in Scotland to supply their local authority area with food produced locally. Given the emphasis of local and fresh food in public sector food procurement, data on agricultural outputs from different local authorities are presented. 3.4.1 Map of farm types in Scotland The capacity for primary producers to supply agricultural output to the public sector food procurement market is driven by availability of suitable agricultural land and associated farm types. The map below shows farm types by agricultural parish (main and minor holdings). It shows the main areas of production are the North East (cereals and livestock) and South West (dairy). This gives an indication of the producing areas in Scotland.

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3.4.2 Agricultural output by local authority area The Agricultural Census records areas under agricultural production. Unfortunately yields are not available at a local level so the tables below show area production area by local authority area and for Scotland as a whole. Details are presented in Annex B. The figures show a high degree of regional concentration in the production of agricultural products with three local authorities accounting for between 47% and 85% of output. Some local authorities do not produce some agricultural outputs. As would be expected, rural local authorities are main producers.

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Table 6: Indicative estimates of capacity to supply agricultural output (2007)

Scotland total

Number of 32 local authorities NOT producing

% accounted for by the top 3 producing local authorities

The top 3 producing local authorities

Hectares of potato production

29,835

5 63% Angus Perth & Kinross Aberdeenshire

Hectares of vegetable production

12,266

5 67% Angus Perth & Kinross

Fife

Hectares of fruit production

1,913

4 85% Perth & Kinross Angus

Fife

Number of pigs 435,903

1 73% Aberdeenshire Angus

Highland

Number of sheep 7,104,688

0 45% Scottish Borders

Dumfries & Galloway Highland

Number of dairy cattle

276,581

1 58% Dumfries South

Lanarkshire East Ayrshire

Number of beef cattle 1,014,532

0 47% Aberdeenshire Dumfries &

Galloway Scottish Borders

Hectares of oats 21,719

4 49% Aberdeenshire Highland Scottish Borders

Hectares of cereals 456,785

1 50% Aberdeenshire Scottish Borders

Angus

Fowls for eggs 3,989,110

2 80% Scottish Borders

Fife Aberdeenshire

Poultry 13,815,958

1 52% Borders Aberdeenshire

Fife

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3.4.3 Fish output by port Scottish Fisheries statistics provide figures on tonnes of fish landed by UK vessels in Scotland. Table 7 shows tonnes of cod and haddock landed in 2007 (the main demersal fish). The table shows that cod and haddock landings are regionally concentrated around Peterhead (with Shetland the next largest port) Table 7: Indicative estimates of capacity to supply cod, haddock, mackerel

Port Cod Haddock Mackerel

Aberdeen 272 1,929 -

Buckie 39 34 -

Eyemouth 21 214 -

Fraserburgh 591 2,385 6,866

Lochinver 41 811 811

Orkney - - -

Peterhead 3,562 16,529 46,581

Pittenweem - - -

Shetland 1,627 3,786 42,183

Stornoway - - -

Wick 623 1,665 -

- no breakdown figures available 3.4.4 Summary The figures above show that for some local authority areas it will be difficult to source local food as primary production is highly concentrated on a regional basis. This suggests that the focus should be on using Scottish produce but not necessarily from the same local authority. The regional concentration will also affect the lower proportion of Scottish produce in some local authorities Evidence from Defra on proportion of domestically produced food by Government departments (Defra, 2008) shows that where home production is a lower percentage of total food supply, is it more difficult to source high levels of home produced food.

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4. Barriers and Opportunities in Public Sector Food Procurement 4.1.1 Barriers There have been a number of studies exploring barriers to public sector food procurement. The National Audit Office report (NAO, 2006) highlights further barriers to sustainable procurement in the UK: cost (i.e., value for money is perceived to be inconsistent with paying a premium to achieve sustainability objectives); knowledge (or lack of awareness of the need for procuring sustainably and lack of information about the most sustainable options); a risk-averse culture that hinders the adoption of innovative approaches; legal issues (uncertainty as to what can and cannot be done under the existing rules on public procurement); lack of leadership, or ownership and accountability, at all governance levels; inertia (lack of personal or organizational incentives to drive change). Table 8 summarises constraints for procurers and producers in entering the market in Scotland in Scotland. Table 8: Constraints in Public Sector Food Procurement

Procurers (in buying Scottish produce)

Producers (in supplying the public sector)

Scottish products are often beyond public sector budgets

Prices offered by the public sector are extremely low and restrict suppliers profit margins: other sectors are more appealing

Admin burden of contracting with smaller suppliers

Complexity of the supply chains (who buys what and when?)

Foodservice industry can offer better prices through economies of scale

Complex distribution requirements (location, timing and frequency of deliveries)

Foodservice industry simplifies the procurement process and offers a superior distribution service

(for smaller businesses) there is confusion regarding access to tenders

LAs within a consortium are constrained by the need to buy "off the contract"

The burden of the tendering process itself

Insufficient quantities of Scottish produce to meet demand

In some cases variable quality of Scottish produce vs. imported supplies

Confusion regarding what is "allowed" under EU rules

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EU legislation tends to favour larger companies although it is not intended to do so

Source: DTZ (2005)

More recent research has confirmed that although there are some success stories, many local producers are deterred from supplying to public sector customers because of the perception that they are principally concerned about price (Brown and Geldard, 2008). 4.1.2 Overcoming barriers The evaluation of East Ayrshire pilot study found that the following lessons could be learned:

More training for catering staff, both with regard to using fresh, seasonal produce and encouraging healthy eating.

More education was needed for children and parents to encourage uptake of the scheme.

More flexibility of menus and an appreciation of the local context. Cardiff University have researched and analysed examples of best practice in the field of sustainable procurement, both within the UK and abroad. They found that all the barriers to sustainable (especially local) food procurement exist only in countries (like the UK and the US) where cost-based contracting tends to be extolled over all other values. 4.1.3 Opportunities and Incentives Although the Scottish Executive commissioned research from 2005 (DTZ 2005) found that there are generally more constraints in getting Scottish produce to the public sector marketplace than there are incentives to do so, incentives do exist. Table 8: Incentives for Public Sector Food Procurement

Demand-side Supply-side

Procurers (in buying Scottish produce)

Producers (in supplying the public sector)

Achieving local procurement goals

Steady year-round business

More sustainable local food chains

Reliable payment

The wide geographical spread of delivery points means that picking up additional business can be cost effective.

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Healthy eating agenda creating a demand for new products

Some products suited to a shorter supply chain e.g. fruit & veg, milk, bread, eggs

The public sector is only one customer but the appeal of the public sector business takes a number of forms:

It presents steady demand which can counter-balance seasonal demand from the hospitality industry,

Demand is channelled through several contracts which reduces the impact on the supplier if a contract is lost and awarded to another firm,

Contracts for the more remote/ rural parts of the country can open up further business opportunities in these areas, i.e. it can make a delivery run more viable if hospitality/ retail deliveries can be secured in the area on the backbone of the schools/ hospital supplies (DTZ, 2005)

The main opportunity is the fact that procurers are under pressure to open up opportunities for small and medium-sized businesses. As a result, the public sector food market should give small local producers more opportunities.

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5. Good practice examples There are some examples of good practice in sustainable food procurement that are useful to explore to identify lessons learned for Scotland. 5.1.1 Italy Macleod and Scott (2007) report that Italy has a history of sustainable food procurement that goes back to the mid-1980s. Examples include organic meals in schools, hospitals, and university canteens in various Italian cities, as well as emphasis in some locations on traditional Mediterranean foods. A key part of its approach relates to education and this includes teaching children about the seasonality of foods. Figure 7 summarises Italy‟s creative approach. Figure 7: Italy’s approach to sustainable food procurement

Vision School meals are recognised as an integral part of people‟s right to education and of consumers‟ rights to health and are not seen as merely a commercial service. How the vision shapes Italy’s School meals

o By embedding school meals in a broader educational project, the Italian system allows contractors retain control of the service and the law allows them to introduce changes to the food service in order to preserve its link to food education within the school

o By assigning to school meals the function of conserving local traditions, the Italian system legitimates the possibility of „discriminating‟ that is, or privileging local operators and all expertise linked to local food.

o The awarding of catering contracts is based on a notion of „best value‟ that is interpreted and evaluation by taking into consideration not just economic issues but also hygienic, nutritional aspects.

Source: Morgan and Sonnino (2008)

5.1.2 East Ayrshire The local food in schools project by East Ayrshire Local authority in Scotland is one project that is well known as adopting creative food procurement practice. It has also been the subject of several evaluations (ADAS, 2006, Footprint Consulting 2008). Figure 8 summarises the approach adopted in East Ayrshire to creative procurement. Figure 8: Creative procurement in practice in East Ayrshire

Quality is defined as o Ability to supply to deadlines (15%) including time scale from harvest to

delivery o Quality and range of foodstuffs (15%) including fair trade, seasonal, shelf life,

assurance schemes o Food handling arrangements and facilities (10%) including training o Use of resources (10%) minimising packaging and waste

Source: Morgan and Sonnino (2008)

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5.1.3 London Figure 9 summarises the approach adopted in London to sustainable procurement in general. It recognises the leverage of procurement and the sustainability issues, particularly waste. Figure 9: London’s approach to sustainable procurement

Responsible sustainable procurement in London has seven distinct strands o Encouraging a diverse base of suppliers o Promoting fair employment practice o Promoting workforce welfare (London‟s living wage) o Meeting strategic labour needs and enabling training opportunities o Providing community benefits o Practising ethical sourcing o Promoting greater environmental stability.

London food strategy – 6 priority actions o Ensuring commercial vibrancy o Securing consumer engagement o Levering the power of procurement o Developing regional links o Delivering healthy schools o Reducing waste

Source: Morgan and Sonnino (2008)

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Annex A: References ADAS (2006) Evaluation of a Pilot Scheme to Encourage Local Suppliers to Supply Food to Schools‟ Scottish Executive. http://www.scotland.gov.uk/Resource/Doc/138163/0034389.pdf APSE (2008) Creating resilient local economies: Exploring the economic footprint of public services http://www.cles.org.uk/files/102868/FileName/EXECUTIVESUMMARYFootprints.pdf Brown and John A Geldard (2008) Supplying Local Food to Local Customers.

http://www.effp.com/Documents/publications/Supply%20Local%20Food%20To%20Mainstream%20Customers.pdf).

Centre for Human Ecology – Sustainable Food Procurement – Realising the benefits and overcoming the barriers to sustainable food procurement in the public sector in Scotland Defra. Public Sector Food Procurement Initiative (http://www.defra.gov.uk/farm/policy/sustain/procurement/pdf/psfpi-putting-into-practice.pdf). Defra (2008). Proportion of domestically produced food used by government departments and also supplied to hospitals and prisons under contracts negotiated by NHS Supply Chain and National Offender Management Service (previously HM Prison Service) http://www.defra.gov.uk/farm/policy/sustain/procurement/pdf/psfpi-datareport081125.pdf DTZ (2005). Public sector food procurement in Scotland: Incentives and Constraints for Buyers and Producers. Scottish Executive http://www.scotland.gov.uk/Publications/2005/04/26120207/02126 DTZ (Current project) – Financial Impact of introducing Nutritional Standards for Hospital Food provided for Patients DTZ (2009). Public Sector Expenditure on Food and Drink in Scotland. Available on The Scottish Government website 2009. Footprint Consulting Limited (2008). The Social Return on Investment of Food for Life School Meals in East Ayrshire http://www.footprintconsulting.org/resources/44-resources/138-eac-sroi-report Friends of the Earth published a report on re-localising Ireland‟s food economy

(http://www.foe.co.uk/resource/reports/localising_food_economy_ni.pdf).

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HMT (2008). Accelerating the SME Economic Engine: through transparent, simple and strategic procurement. http://www.hm-treasury.gov.uk/d/pbr08_economicengine_2390.pdf MacLeod M and Scott J (2007) Local Food Procurement Policies A literature review http://www.atlanticsustainability.ca/downloads/procurement/LocalFoodProcurementPolicies.pdf Morgan K and Morley A (2002) Relocalising the food chain The role of creative public procurement. Morgan K and Sonnino R (2008). The School Food Revolution, Earthscan. National Audit Office: Smarter food procurement in the public sector: A good practice guide. 2006 http://www.nao.org.uk/publications/0506/smarter_food_procurement_in_th.aspx New Economics Foundation (2001). http://www.neweconomics.org/gen/uploads/m1ujoc45uobd1ubpovxk0555200720041

65302.pdf

Powys Public Procurement Project (2003). Promoting Sustainable Health And Wellbeing Through Local Food Procurement. Health Impact Assessment http://www.wales.nhs.uk/sites3/docmetadata.cfm?orgid=522&id=44699 QMS – Buying Red Meat: Putting into Practice the SG‟s public procurement and sustainable development strategy (7/2008) Rimmington M and Carlton Smith J (2006). Smarter Food Procurement In The Public Sector – Does It Cater For Sustainability? Department of Hospitality Leisure and Tourism Management, Oxford Brookes University Business School available from http://www.nao.org.uk/system_pages/search.aspx?&terms=food+procurement

Scottish Executive – Integrating Sustainable Development into Procurement of Food and Catering Services – Guidance and action sheet for public purchasers, caterers and their internal customers Sustain (2002) Local Food; benefits, obstacles and opportunities.

(http://www.sustainweb.org/pdf/briefing1.pdf

Thatcher and Sharp Measuring the local economic impact of National Health Service procurement in the UK: an evaluation of the Cornwall Food Programme and LM3., in Local Environment, vol 13, April 2008 Yorkshire Forward, the regional development agency for the region, commissioned a report, Food and Drink in Yorkshire and the Humber: Regional Supply Chains Mapping Study (2005). http://www.defra.gov.uk/farm/policy/sustain/procurement/projects.htm

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Annex B: Agricultural Production by Local Authority, 2007 Hectares of potato, vegetable and fruit production

0 1000 2000 3000 4000 5000 6000 7000 8000 9000 10000

West LothianWest

StirlingSouth Lanarkshire

South AyrshireShetland Islands

Scottish Borders,TheRenfrewshire

Perth & KinrossOrkney Islands

North LanarkshireNorth Ayrshire

MorayMidlothianInverclyde

HighlandGlasgow City

FifeFalkirk

Eilean An SiarEdinburgh, City ofEast Renfrewshire

East LothianEast Dunbartonshire

East AyrshireDundee City

Dumfries & GallowayClackmannanshire

Argyll & ButeAngus

AberdeenshireAberdeen City

Potatoes Vegetables Fruit

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Number of fowls and poultry animals

0 500,000 1,000,000 1,500,000 2,000,000 2,500,000 3,000,000

West LothianWest

StirlingSouth Lanarkshire

South AyrshireShetland Islands

Scottish Borders,TheRenfrewshire

Perth & KinrossOrkney Islands

North LanarkshireNorth Ayrshire

MorayMidlothianInverclyde

HighlandGlasgow City

FifeFalkirk

Eilean An SiarEdinburgh, City ofEast Renfrewshire

East LothianEast Dunbartonshire

East AyrshireDundee City

Dumfries & GallowayClackmannanshire

Argyll & ButeAngus

AberdeenshireAberdeen City

Eggs (Fowls) Poultry