Achieving community benefits through contracts: law, policy and practice

The Joseph Rowntree Foundation

Author +
Richard Macfarlane and Mark Cook

Year: 2002

To make employment, training and other ‘community benefits’ key outcomes of public expenditure programmes, they need to be incorporated into the specification of what is being purchased or funded.

The legislative and policy frameworks for doing this are complex and detailed guidance has been lacking, especially in relation to UK policy and legislation, the European Treaty and EC Procurement Directives. This report provides the first clear guidance on these matters, drawing on discussions with the Treasury, the Scottish Executive and the Office of Government Commerce.

Download Achieving community benefits through contracts: law, policy and practice


This research examines ways of including ‘community benefit’ requirements – such as creating new job and training opportunities – in procurement contracts, partnership agreements, funding agreements and planning agreements. It focuses on employment, training and regeneration, but the findings also apply to other community benefits. Key findings are:

  • Contrary to common perceptions, the inclusion of community benefits in procurement is not prohibited by either the Government’s policy or the EC rules.
  • To comply with the policy and legal framework, the community benefit requirements must be part of the core purpose of the contract and must provide a benefit to the authority at award stage.
  • To comply with EC rules the community benefit requirements must not disadvantage non-local contractors and must be consistent with the specific requirements in the Directives for specifications, selection and award criteria.
  • Local authorities in England and Wales can include employment matters in contracts provided that these are supported by their ‘best value’ policies (e.g. the Community Strategy), ‘best value’ is demonstrated, and EC rules are complied with. Similar arrangements are being introduced in Scotland.
  • Community benefit requirements can be included in planning agreements, funding agreements and grant conditions provided that they do not require either party to act in an illegal or discriminatory way.
  • To avoid contravening the UK equal opportunities legislation and disadvantaging non-local contractors, it is best to use general categories of beneficiary (e.g. unemployed people, trainees, young people) and then target the benefits through ‘supply-side’ activities (e.g. training and job-matching services).
  • The use of community benefit requirements needs to be supported by supply-side actions and good monitoring and evaluation processes.
  • The use of community benefit requirements in contracts and other agreements is complex and contracting authorities should seek expert advice to ensure that they comply with all relevant legal and policy requirements.

Download the Summary of the report 

Table of contents

Executive Summary
The legal framework
Using social consideration in the procurement process: practical guidance
Including community benefits clauses in other agreements
Getting organised for delivery