EXTERNAL PRESSURES FOR ORGANISATIONAL CHANGE:

The Case of Sustainability in Local Government Buying in

England

LUTZ PREUSSSchool of Management

Royal Holloway, University of London

The importance of local government procurement

economic role: annual expenditure £40 billionbut fragmented among 410 Councils in England

type of goods and services: social services, spatial planning, waste disposal

local democracy: wide variation in approaches to sustainability and procurement

Research question

what range of pressures for sustainability do local government procurement managers perceive?

Methodology

pilot studies

benchmarking (Department for Communities and Local Government, Regional Centres of Procurement Excellence; Society of Procurement Officers)

study of leading authorities

Sources of external pressure

Political pressure from the EUHandbook on Green Public Procurement

but also:EU public procurement directives

applicable to all contracts above €200.000seen as barrier in the pastbut no longer the case= major framework but no direct pressure

Sources of external pressure

Political pressure: Central GovernmentUK government sustainability strategy, 2005:

“embedding sustainable development considerations into spending and investment decisions”

DCLG: National Procurement Strategy for Local Government, 2003‘milestones’ local government

Tony Blair: be among the EU leaders in sustainable procurement by 2009

Central Government stringent targets for reducing local government

expenditure 2004 Spending Review: annual savings of 2.5%

of council expenditure

Procurement manager of a district council saw:“a fascinating division in government thinking

between the efficiency agenda, which is all about Gershon and all of this, and the stuff that David Milliband and others are talking about in terms of localism. The two aren’t compatible.”

Sources of external pressure

Political pressure: Members of the CouncilCouncillor interest in sustainability

Procurement officer, a London Borough:“I would say, at least half of the Members that

are on the Executive Committee are fairly committed to sustainable community issues.”

Yet wide variety of performance reflecting party-political and demographic issues

 Procurement Manager, a District Council:“We [concentrate] probably less on economic

development, a bit more on sustainability now than we were under the Tory Administration. We are now Liberal Democrat. They are more mindful of environmental issues. … But, I guess, it is a balance between that and all the other pressures.”

Sources of external pressure

Advisory and professional bodiesImprovement and Development Agency, IDeA- training - tools, e.g. for environmental risk assessment

expertise of IDeA is generally acknowledged Procurement Manager, a District Council: “I think IDeA is useful as a source of advice and

good practice. Their website is quite a useful thing.”

Sources of external pressure

Advisory and professional bodiesRegional Centres of Excellence, set up in

2004national forum for improving service delivery

across local governmentexample: RCE funding to map potential

voluntary sector suppliersbut: RCE focus on efficiency gains direct work on sustainability issues only

where opportunities for a ‘win-win’ situation

Sources of external pressure

Advisory and professional bodiesSociety of Procurement Officers in Local

Government, SOPOissues guidance notes on sustainabilitysteering group on sustainable procurement

Chartered Institute of Purchasing and Supply, CIPS

guide on environmental purchasing in conjunction with the NHS Purchasing and Supply Agency

Sources of external pressure

Economic pressureCost savings from environmental initiatives

Procurement Manager, a London Borough:“The green aspects are not driven by the top-

level Council policy, but again the total cost aspect is important. … When you look at an area like recycling, it is quite clear that landfill tax over the tender period is going to go up significantly; therefore we could weigh much more highly the recycling impact.”

Sources of external pressure

Economic pressureproactive suppliers

Procurement Manager, a London Borough:“Suppliers are very rapidly catching on to

the fact that this is a commercial issue. It is not an ethical issue, it is a commercial issue. They know it is in their commercial interest to sell environmental products.”

Efficiency-based pressures

- cost savings in ‘win-win’ cases

- proactive suppliers

Legitimacy-based pressures

DiMaggio and Powell (1983) - coercive isomorphism

pressure from Central Government- mimetic processes

‘best practice’ advice by IDeA - normative pressures

professional advice from SOPO and CIPS

Central government,e.g. DCLG

Agencies sponsored by central and local government (IDeA)

Elected Members of the Council

Local situation

Professional bodies, CIPS,

SOPO

Public opinion Greening

local government procurement

Cost savings

Supplierknow-how

Legitimacy-based factors

Efficiency factors

Direct pressure

Indirect influence

Competing sources of legitimacyCentral Government versus distinct identity

of Council

Procurement Manager, a District Council: “You get external pressures obviously, but

this Council has not always paid much attention to those. And I think the way it has picked up the sustainability agenda is less to do with government pressure than with the sense of local need.”

Competing sources of legitimacyleading to symbolic action and a degree of de-

coupling from the Central Government agenda

Procurement Manager, a District Council: “We have a very box ticking culture and if there

is a box there to tick, we’d like to be able to tick it. How well the performance is that actually underlies that tick I’d sometimes have a question, but we want to be able to say we’ve done it, tick the box and move on.”

Competing sources of legitimacysymbolic action and a degree of de-couplingroom for individual commitment

Procurement Manager, a London Borough:“I am personally committed, but I think, you

have to be, don’t you, particularly in this field, because it is never going to be easy. In the last year we’ve heard that climate change is something the Government talks about, but … I would say that most people aren’t thinking that sustainability and environmental issues are their number one priority. It’s jobs and taxes, schools and health.”

Legitimacy-based pressures Competing sources of Coercive legitimacyMimeticNormative

Efficiency-based pressures

Interpretation and implementation in the organisation

Symbolic implementationDe-coupling

Organisational culture and values as catalyst

An extended model of pressure for organisational change