Agenda item

PROCUREMENT REVIEW: LOCAL PROCUREMENT VIA SECTION 106 OBLIGATIONS

A briefing is provided from lead officers.

 

In addition a submission has been received from GoodPeople on local procurement and Section 106 opportunities.

Minutes:

The commission heard from Councillor Johnson Situ, Cabinet Member for Growth, Development and Planning and Danny Edwards, Strategy & Partnerships Manager.

 

Councillor Situ welcomed the fact that the Commission was looking at this piece of work because there were 16,000 registered businesses in the borough, and the vast majority of them SMEs.  The council was absolutely committed to SMEs and there were ambitious plans for growth in the borough which was all hinged and centred around the small and medium businesses.

 

There were a number of ways of achieving this.  The role section 106 and planning plays, the route through procurement the role that we have through our local economy and our partnerships, and as planning authority, the role the council plays through Section 106 agreements.  Councillor Situ explained that through a commitment within a S106 agreement which encourages and requires that 10% of construction contracts for developers go to local businesses and SMEs.  How this was currently encouraged was through specific wording in the agreements which make reference to ‘reasonable endeavours’.  What this meant in practice is that the council would encourage developers, as they're developing their contracts to put clear links with both the local economy team, and also to advertise locally.  Discussions also took place around monitoring as well.

 

The council also looked at how it built up strategic relationships with developers right across the piece and how it could encourage working with local SMEs and also employment.  The vision was to ensure that the council was growing and supporting SMEs, and also providing and acting as a facilitator between big developers who are investing in the area and smaller businesses.  There was a question mark as to whether the council can go further in respect of the relationship with SMEs and that commitment of 10% of construction, and ideas of how this could be taken further had been explored.

 

Councillor Situ stated that it was recognised that whilst the council monitor at the moment, it could go further in monitoring, and there is specific work being undertaken as to this could be developed. So requiring developers at each stage to have a statement of intent, which is at each phase, talk about how they will go about ensuring that 10% of their contracts are going to local SMEs and this enable the council to monitor more proactively.

 

There was significant town centre growth right across the borough.  A key question was, how the council could have a specific pilot in town centres - the Old Kent Road seemed like an immediate example in which it could be shown what was possible, and set a standard for other developers. 

 

Councillor Situ informed the commission that the council was looking to review the guiding policy document that supports the S106 and CIL SPD and that would provide an opportunity to strengthen the wording around particular areas of focus. 

 

Councillor Situ then answered questions from the commission members.  Questions were asked around the following:

 

·  Plans in terms of online campaigns to assist small businesses to make them aware of the opportunities that exist.

·  Helping BAME businesses, from a regeneration perspective.

·  Willingness to pilot innovative ways that can increase local benefit from activity in the borough.

In response to the questions, Councillor Situ informed the commission that there was opportunity to support BAME businesses within regeneration - a significant proportion of small businesses were BAME owned and in terms of wider projects this was a specific area of focus.  He felt the challenge for regeneration projects was ensuring that the projects were reflective of the diversity of the communities that they represent and the way the council was seeking to address this was by empowering community groups and businesses through these projects.  Councillor Situ stressed the importance of remaining open to what works, acknowledging that the economy was significantly shifting (and was shifting even before the pandemic).  The council was constantly reviewing what worked in terms of getting people into employment and supporting businesses as well.

 

Danny Edwards reported that the council had had several conversations with GoodPeople on their proposals and welcomed any innovative way to deliver positive outcomes for residents.

 

The chair thanked Councillor Situ and officers for their attendance at the meeting.

 

RESOLVED:

 

That the briefing note on Local procurement via S106 obligations and the Southwark Procurement Commission – GoodPeople recommendations be noted.

Supporting documents: