Can new approaches to procurement help build the foundational economy in Wales?
Local procurement could create stronger local supply chains and build wealth in communities across Wales. A recent Assembly Committee explored how this could be improved in Wales. We’ve summarised some of the Committee’s main findings. Let us know what you think about the Committee’s findings and recommendations to help inform our future policy positions on procurement.
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The National Assembly for Wales’ Economy, Infrastructure and Skills Committee recently consulted on public procurement in the foundational economy. The Committee sought views on the proportion of public contracts in Wales that go to Welsh suppliers and the extent to which increasing local procurement by the public sector could create stronger local supply chains and build wealth in communities across Wales. It has made a series of recommendations for Welsh Government to consider in their approach to local procurement. We’ve summarised some of the main points below. Let us know what you think about the Committee’s findings and recommendations to help inform our future policy positions on procurement. We’ll post further updates on this blog when Welsh Government responds to these recommendations.
The Wales Co-operative Centre responded to the consultation jointly with other social enterprise support organisations such as Coalfields Regeneration Trust, DTA Wales, Social Firms Wales and WCVA. You can read our joint response here.
In his evidence to the Committee, the Deputy Minister for Economy and Transport set out Welsh Government’s intention to build wealth within our communities by encouraging local procurement. He hopes to go further than the Preston model in increasing the amount of truly local spend.
The task of defining ‘local procurement’ and measuring impacts and ‘leakage’ of wealth from local economies is difficult. The Committee’s inquiry explored the scepticism about how increased ‘local procurement’ spend is measured and monitored. It recommended that Welsh Government provide further clarity on how it intends to define local procurement and what success will look like.
The Committee considered how to encourage small business to tender for public sector contracts and to work together to form collaborative bids. This included breaking contracts into small lots and pre-engagement activity. Evidence pointed to the need for small businesses to receive business support with this process too. The Committee concluded that Welsh Government should focus on how business support and mentoring activities are tied in with the priority areas for public sector procurement. It should concentrate on helping public sector procuring bodies to build and strengthen their pre-engagement activity, and their knowledge of and relationships with local suppliers.
The Committee saw the status of procurement as critical. They found that part of the success of the Preston Model was in the commitment of anchor institutions to sign up to a Statement of Intent and give prominence to procurement as a driver for local economic growth. It also said that bringing social value into the bidding process needs to be accompanied by monitoring whether social value outcomes are being delivered. The Committee has asked Welsh Government to provide clarity on how it will be promoting the status of procurement as a driver of social value through its work with the Public Services Boards and the Skills and Capability Plan. This includes a request for clarity on whether Public Services Boards would be agreeing common social value principles and criteria or a ‘statement of intent’ for adoption by local anchor institutions, as is the case in Preston.
We would welcome increased focus on social value in procurement. In our view, Welsh Government should consider a minimum social value weighting of 20% in public sector contracts. This will help to ensure maximum value for money for public contracts by changing priorities and driving a shift towards embracing social value. By including and evaluating social value public bodies will be able to choose a supplier under a tendering process that not only provides the most economically advantageous service, but secures wider benefits for the local community. Do you think this would be beneficial for social businesses in Wales? Let us know what you think about our view and how you think procurement could be made more accessible for social businesses in Wales.