Environmental and economic impact of UK government spending revealed millions invested in high-risk supply chains and energy-inefficient suppliers
Research out today by AMEE, a company that helps businesses become more energy efficient, and Spend Network, who analyse government procurement, shows more than £844m was spent on high financial risk companies by central government in 2013/14.
The analysis, using open spending data, also shows wide variations in carbon efficiency. Over the same period, £4.6bn was spent with companies who have low energy and carbon efficiency (when compared to better-performing peers).
Today’s study is the first of its kind and uses each Department’s open spending data to identify spending with companies. This amounts to £44 billion of expenditure in 12 months. This data has been supplemented by data about supply chains and carbon efficiency for individual companies sourced from AMEE. Using this information, the researchers were able to estimate that Government procurement could influence up to 97 million tonnes of carbon emissions from all supplier activities, representing 15% of total UK emissions, with 4.7 million tonnes directly related to Government activities. A concerted effort by Government, engaging all suppliers to reduce their total carbon footprints, would provide a large contribution toward reducing total UK emissions and achieving the UK’s carbon budget.
Click here to view all the data via AMEE Monitor:
Best and worst performers
The findings show which central government departments are the least efficient and which have supply chains with the highest financial risk. Of 17 departments assessed, the Department for Education comes out as the least energy-efficient with a ratio of 193 grams of carbon emissions per £1 spent. This is compared to the best performer, HM Treasury, with just over 15 grams for every £1 spent.
The study found the Home Office to have the most financially risky supply chains with 25% of spend going to suppliers that have high or very high risk. In contrast, The Ministry of Justice was found to have the least at-risk spend profile with 0.2% of spend going to high or very high risk suppliers.
It’s hoped that today’s research will provide a useful tool for policy makers and citizens interested in procurement, supply chains and sustainability. Specifically, it helps to address obligations under the Social Value Act 2013, which requires public organisations to incorporate sustainability into procurement decisions.
Tyler Christie, CEO of AMEE said “These findings indicate the immense opportunity for Government to cut costs, reduce risk, and achieve its carbon budget goals through improved data-driven supply chain policies and management. This is the first analysis of its kind and provides specific, public data and guidance to implement the Social Value Act in order to drive carbon reductions and mitigate climate change.”
Ian Makgill, MD of Spend Network said “This is a great example of the potential impact of publishing government spending data as open data. Now, for the first time ever, the public can see the environmental impact of the buying decisions made by Government. AMEE and Spend Network will continue to work together to allow the public to monitor the progress that Government makes with their supply chain.”
Both AMEE and Spend Network are part of the Open Data Institute (ODI) network. The ODI is an organisation committed to unlocking the social, economic and environmental value of open data. The ODI’s Technical Director, Jeni Tennison said:
“If government’s procurement decisions are to factor in environmental sustainability, they need to be able to access data about their prospective suppliers. This study demonstrates how open data about supply chains and environmental impact could help inform those decisions, and lead to greater accountability, driving towards a positive environmental impact.
Departments and companies that release open financial, supply chain and environmental data should be applauded for their transparency, as should organisations like Spend Network and AMEE who clean, aggregate and extract value from this data, particularly when they then publish it as open data. There is much more to do here, in terms of data being available and being exploited, to help inform the decisions that can reduce the government’s environmental impact.”
Tyler Christie, CEO at AMEE. email@example.com Tel: 07554683359
Ian Makgill, MD at Spend Network. firstname.lastname@example.org Tel: 07968348721
Enquiries relating to the ODI: email@example.com Tel: 07879 644805
Notes to Editors:
- Today’s study analysed all available supply-chain data, for 17 government departments, all spending that could be attributed to companies registered with Companies House amounted to a total spend of £44bn. This represents approximately 25% of the overall total spend by these 17 departments in the financial year 2013/14.
- All data and findings are available through a public portal on AMEE’s website here with a infographic illustrating key findings on AMEE’s blog. All data from the research has been made open to improve awareness of the Government’s supply chain risk and climate impact. Visitors can explore the data to compare departments, find detailed analytics for each department, and also search through all listed suppliers to see the spend they received and their risk and environmental performance data.
AMEE’s mission is to empower businesses to be resilient, competitive and responsible by making sustainability data more accessible and useful. Businesses face a range of growing pressure due to social concerns, environmental risks, and economic volatility. We believe easy access to data and collaboration with others with enable the innovation businesses need to overcome these challenges and build a more sustainable economy. AMEE technology company based in London backed by leading venture capital investors OATV, Union Square Ventures, and Amadeus Capital Partners.
About Spend Network:
Spend Network is a database of public transactions gathered from published spending statements and OJEU tenders. Spend Network is the most comprehensive UK database of spending by Government, and the only national spend analysis in Local Government. We are a business that publishes data openly so that anyone can access it and make use of it. We charge for access to augmented data and for completing research projects. Spend Network is also part of the Open Data Institute’s start up programme.
About the ODI: http://www.theodi.org
The Open Data Institute catalyses the evolution of open data culture to create economic, environmental, and social value. It unlocks supply, generates demand, creates and disseminates knowledge to address local and global issues. Founded by Professor Sir Nigel Shadbolt and Professor Sir Tim Berners-Lee, the ODI is an independent, non-profit, non-partisan company.