What is PPN 06/21 and Why Is It Important?

Procurement Policy Notes (PPNs) offer straightforward guidelines for central government departments, their agencies, and related non-departmental public bodies (so called 'In-scope Organisations') on how to handle procurement under the Public Contracts Regulations 2015. In this blog, we discuss why PPN 06/21 is important.

PPN 06/21 Background and Implementation

PPN 06/21 was published on 5th June 2021 and came into effect for new procurements launched from 30th September 2021. This means that 'In-scope Organisations' must follow PPN 06/21 guidelines when procuring goods, services, and works as per the Public Contracts Regulations 2015. This applies specifically when there is an anticipated contract value of £5 million per annum and above, excluding VAT, unless it is not related to the subject matter of the contract and proportionate to do so.

The main goal behind introducing PPNs is to make government buying more transparent, sustainable, and accountable. It stresses that 'In-scope Organisations' should factor in the wider community, environment, and economy when deciding on contracts.

The Importance of Carbon Reduction Plans

By April 2024, all NHS procurements will need to include a carbon reduction plan, as set out in PPN 06/21. This plan is a crucial element in achieving the government's commitment to reducing carbon emissions and transitioning to a sustainable future. 'In-scope Organisations', as well as companies currently (or planning to) become suppliers to 'In-scope Organisations', should familiarise themselves with the requirements for a comprehensive carbon reduction plan to ensure compliance and contribute to the collective effort in combating climate change. Find out more about the PPN 06/21 timeline.

What Should the Carbon Reduction Plan Contain?

'In-scope Organisations' must ensure that suppliers provide a published Carbon Reduction Plan (CRP) that meets the following criteria:

• Publication on the supplier's website: The CRP should be easily accessible and available on the supplier's website for public scrutiny. This allows for transparency and accountability in the supplier's commitment to carbon reduction.
• Sign-off within 12 months: The CRP should be signed off at an appropriate level within 12 months of the date of the procurement. This ensures that the plan is up-to-date and aligns with the current goals and targets for carbon reduction.
• Commitment to achieving Net Zero by 2050: The CRP should include a signed declaration from the supplier confirming their commitment to achieving Net Zero carbon emissions by 2050 at the latest. This commitment is in line with the government's long-term goal of achieving carbon neutrality.
• Details of Greenhouse Gas emissions: The CRP should provide comprehensive details of the supplier's current Greenhouse Gas emissions. This includes quantifying emissions from all relevant sources and sectors, enabling a clear understanding of the supplier's carbon footprint.
• Environmental management measures: The CRP should outline the environmental management measures that the supplier intends to implement throughout the contract's delivery. These measures could include renewable energy sourcing, waste reduction and recycling initiatives, and sustainable transportation options, among others.

By ensuring that suppliers meet these requirements, 'In-scope Organisations' demonstrate their commitment to sustainable and responsible procurement practices while contributing to the national effort of achieving carbon neutrality.

The Bottom Line

PPN 06/21 is a significant development in the government’s procurement process, emphasising the importance of sustainability and carbon reduction. 'In-scope Organisations', as well as their suppliers must understand and implement the guidelines outlined in this policy note to ensure transparent, accountable, and environmentally conscious procurement processes.

The requirement for a comprehensive Carbon Reduction Plan further reinforces the commitment to combat climate change and achieve Net Zero carbon emissions. By stipulating the necessary components of the CRP, 'In-scope Organisations' can ensure that their suppliers are actively working towards sustainable practices and contribute to the collective goal of a greener future.

As we move forward, it is crucial for all stakeholders involved in government procurement to embrace the principles and guidelines set forth in PPN 06/21. By doing so, we can create a more sustainable and resilient society for future generations.