As a result of the COVID-19 pandemic, Procurex Wales 2020 was held online on Monday 19 October in association with the Welsh Government. Despite being a virtual rather than a physical event, its key features – Keynote Arena, Procurement Skills Academy, Networking and Collaboration Zone and Exhibition Hall – remained unchanged and were enjoyed by over 2200 registered delegates.
After a warm welcome from the Meeting Chair, the TV presenter, journalist and broadcaster Sian Lloyd, the Keynote Arena saw leading speakers, including two Welsh Government Ministers, reflecting on the role of public sector procurement in Wales. While COVID-19 was inevitably mentioned in all the presentations, it did not dominate – the clear message was that public procurement in Wales is about so much more than COVID.
Rebecca Evans, Minister for Finance and Trefnydd, stressed the importance of procurement at the opening of her speech, in what emerged as a key theme during the day:
“With an annual expenditure of £6.7 bn by Welsh public services, procurement is making a real and tangible difference to businesses, people and communities in all parts of Wales.”
While procurement is often discussed as a driver for making savings and increasing efficiencies, what became clear from the presentations was that in Wales, procurement is also at the heart of delivering economic growth, well-being, social value, environmental change/decarbonisation and much more. That this is not new was highlighted by Councillor Chris Weaver, Cabinet Member for Finance, Modernisation & Performance at Cardiff Council, who opened his address by saying:
“Cardiff Council has been using procurement in new and innovative ways for over a decade, using the power of the public purse to deliver social and environmental progress.”
In Cardiff, this is achieved by the use of a category management approach across all of the Council’s third party spend including traditionally hard to reach areas such as social care. Not only does this approach save the council money, but it also allows them to find new and better ways of spending, which benefit the city and its residents.
Two of the key levers for change highlighted by Councillor Weaver were socially responsible procurement and the real living wage. In 2019, Cardiff became the second city in the UK to be a real living wage city – seven years after the council, despite austerity, moved to ensure that all council employees were paid the real living wage as a minimum. In a city which has seven of the ten poorest council wards in Wales, a real living wage makes a significant difference to families, and to the local economy in which they spend their wages – in what Andrea Wayman, CEO of Elite Supported Employment described in her presentation as the circular economy.
As Rebecca Evans explained:
“Social value is at the heart of all we do…Procurement is a powerful lever to maximise the positive outcomes in this area… We have worked closely with the WLGA and other stakeholders including the Future Generations Commissioner, Transport for Wales and the housing sector to produce a set of social value measuring tools for the Welsh public sector”
These tools will be aligned to the Future Generations Wellbeing Goals and will place a proxy financial value on all community benefit measures. They will be included in all council tenders over £150k. The social value element will account for at least 10% of the tender score – confirming that
“community benefits, the real living wage and the fair work agenda will become increasingly important to all organisations that want to work with…the Welsh public sector.”
Lee Waters, Deputy Minister for Economy and Transport, focused on procurement’s role in the foundational economy, explaining that:
“Wales is the first country in the world to take a foundational economy approach…Its focus is on the everyday, the humdrum, the mundane bits of our economy that often get overlooked…{health, care, food, housing, pipes, utliities} the everyday, the things that are there because people are there. The things that keep us safe, sound and civilised. When you think about key workers, then you are thinking about the foundational economy.”
The foundational economy represents about 40% of employment in Wales, and procurement is a lever that can be used to strengthen that economy. To that end, the Welsh Government is deliberately experimenting with 52 different projects, 14 of which are designed to explore social value and the foundational economy in procurement – for example, investigating how to drive up the use of local suppliers, how to ensure more local food enters the supply chain. In addition, Mr Waters explained how the Welsh Government is working with the Centre for Local Economic Strategies (CLES) to find out where public money (spent during procurement) is leaking out of the local economy. He hopes this will replicate the marked increase in public sector procurement spend with local suppliers seen in Manchester and Preston.
The importance of the foundational economy was stressed by Jonathan Irvine, Director of Procurement at NHS Wales National Shared Services Partnership. Reflecting on the first wave of the COVID pandemic and NHS Wales’ response, he said:
“The pandemic has taught us the importance of self-reliance and self-sufficiency in all areas of spend but particularly with Brexit added to the mix later this year, our work within the foundational economy must accelerate and we need Welsh manufacturers and service providers to stand ready to meet this demand and be encouraged to develop a deeper and more meaningful relationship with the NHS here in Wales.”
Another theme which emerged during the day was the importance of procurement in meeting Wales’ environmental and decarbonisation goals. As Jonathan Irvine, Director of Procurement at NHS Wales Shared Services Partnership commented:
“The pandemic has demonstrated that all decisions including procurement decisions, have an environmental consequence.”
Wales’ focus on the foundational economy helps its environment too. As Mr Irvine pointed out, the foundational economy has a smaller carbon footprint – and the environmental benefits of that are clear. In addition, procurement decisions based on value rather than cost are essential to support the environment – and other areas such as social and community benefit. Mr Irvine said:
“The benefits of the value-based approach are beyond question. Value-based procurement must be embedded quickly, at pace, as the norm of what we do and not the exception.”
James Davies, Executive Chair of Industry Wales, reflected on the wider lessons to be learned from the COVID-19 pandemic. He too, stressed the importance of procurement:
“Public sector procurement works on the very basic needs of life – health and care, food and drink, energy, housing, security, mobility. This is the stuff we’ll always need. There is no drop in demand in this area. Procurement is therefore critical to the wellbeing of our nation, not just as a procurement organisation but as a whole supply chain.”
Mr Davies echoed the speakers from the public sector when he spoke about the importance of procurement to the wider economy and society of Wales, describing it as key to
“an economy for wellbeing and ensuring that our future generations don’t just survive but thrive in the country where they want to live.”
However, he also looked to the future and highlighted some of the challenges that still need to be tackled, including the fact that many of the 105,000 enterprises in Wales do not think they have a clear route to work with the public sector – a perception that urgently needs to change. In future, Mr Davies said, cooperative working will be ever more important as it is increasingly unlikely that a single organisation will be able to deliver every aspect of a complex requirement, particularly once decarbonisation and other environmental requirements are taken into account. He said:
“We should as academia, as government, as industry, as third sector, as unions, as employers’ representatives, find a way of simplifying how we work together because the power of collective working is vital for the economy as well as for the wellbeing of our nation.”
He spoke of the power of this ‘advanced procurement’ to drive innovation and add value but, above all, he said:
“Good advanced procurement is based on trust, on long-lasting relationships where ideas and innovation flow naturally through to providing solutions for our nations.”
