Business and political leaders in South West Wales have called for an overhaul of the procurement process to ensure that more public spending stays within the region.
Speaking at an event organised by 4theRegion, a membership alliance working to bring about positive change in Swansea, Neath Port Talbot, Carmarthenshire and Pembrokeshire, and EFT Consult, a building services consultancy specialising in sustainability, Dave Kieft, managing director, EFT Consult, said: “Procurement is the biggest issue for companies.”
He welcomed speakers Tom Lloyd-Goodwin from the CLES – Centre for Local Economic Strategies, Dr Eurgain Powell, change maker at the office of the Future Generations Commissioner for Wales, and Professor Rudi Klein, a specialist procurement solicitor, who discussed ways to transform procurement so that it benefits local businesses and communities.
Speaking in a video interview filmed for the December 12 event at Swansea Grand Hotel, Llanelli Assembly Member Lee Waters said that success in procuring locally needs to be measured by looking at all the things that an organisation buys – not just salaries.
He outlined some of the barriers that can prevent public bodies procuring locally. One of these is a false perception that it is difficult to do; another is a lack of skill and capacity to take a creative approach to procurement.
“Procurement has been seen as a low status profession and we’ve got to change that,” he said. “Procurement is a tool for social justice. It’s not a technical function of an HR or accountancy department. That’s a really important paradigm shift that we need to see – and then it’s about how can we empower, support and upskill those professionals to be able to do the things that we want them to do.”
He cited the example of Preston, a local authority that has effectively boosted local procurement, and said that Wales can learn from this and also do better still. Tools to help achieve this include the Welsh Government’s £4.5m Foundational Economy Challenge Fund which supports a series of experimental projects to test how to best support the foundational economy – which consists of basic services and products such as health, care and construction.
Carmarthenshire County Council, for example, is using the funding to increase the number of local or regional food businesses supplying the public sector in the area.
“There’s no good reason why that couldn’t be done at scale everywhere else so let’s get it up and running in Carmarthenshire and then lets quickly spread it,” he said.
Officers from Swansea Council were in attendance and able to share some of their recent progress, including the Beyond Bricks and Mortar initiative, which seeks to secure community benefits from all Council-led construction, with contractors undertaking community-focused activities alongside their construction work.
Also on the theme of community benefit, Lloyd-Goodwin cited current homelessness and poverty figures as evidence that the current economic model is failing due to a single-minded focus on growth that neglects socio-economic and environmental factors.
“We know a lot of wealth and resources are extracted out of our local communities and the mission is to think about how we stop that extraction,” he said. “How do we take the economy back to the true root of the word, which is ‘home’?”
He said that procurement presents an opportunity to maximise social value when taxpayers’ money is being spent, impacting the social, economic and environmental wellbeing of local residents.
Klein added that part of getting procurement right includes delivering payments on time and building in procurement policies that consider factors other than who is the cheapest.
“We’ve got to be thinking about protection for the supply chain,” he said. “We need effective monitoring of payments to ensure everyone gets paid within 30 days.”
He said that competence needs to be more strongly considered as part of the procurement process.
“There are many firms, engineering firms in particular, who have their competence accredited by arm’s-length bodies. But they are never chosen – it’s always the lowest price,” he said.
Powell outlined ways in which the Wellbeing of Future Generations (Wales) Act 2015 can improve procurement by encouraging public bodies to consider factors such as wellbeing objectives as part of the process.
“The act gives us the ambition and permission to be brave and bold,” she said.
Speaking after the event, Dawn Lyle, founder and chair of 4theRegion, said:
“What people tell us they want is more collaboration, so that we can effect real behaviour change at all levels. That’s what today was about – getting the whole system in the room to share their challenges and ideas for a more progressive approach to procurement.
“It was great to hear what regional organisations are already doing, and also to hear the voices of real businesses. We all want the same thing – more local spend retained, more viable local communities, and for procurement to drive action on the environmental and social issues we’re facing. Events like this help us see common ground and shared priorities so that together, we can sort things out.”
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