Following reports published by the Auditor General for Wales on Public Procurement in Wales in October 2017 and the National Procurement Service in November 2017, please find observations and suggestions for going forward noted in this document for managing Public Procurement in Wales.
I concur with the recommendations presented on pages 14–16 of the Wales Audit Report which, based on my own observations and experiences, are unquestionable and completely justifiable. For R2 (p.14), please refer to my suggestions at the end of this report.
Major reviews like this are not new (e.g. McClelland) which in itself raises some fundamental questions. Wales is not a large nation and so one might argue that getting procurement right should not be so challenging. Yet, the deep and underlying issues which seem to prevent strategic procurement from being embedded and leveraged in Wales for achieving sustainable benefits have yet to be fully realised.
Each of the areas invited for comment are now discussed:
Under the leadership of Jane Hutt AM, Public Procurement in Wales (2012–2015) made great strides to improve its strategic position and public bodies progressed in understanding how procurement can become a strategic tool for delivering economic benefit to the wider community in Wales. The emphasis on Community Benefits, the revised SQUiD and the introduction of the Joint Bidding Guide should have provided a solid platform to deliver sustainable value-added benefits to all in Wales. Whilst good practices have been observed and are publicly evident through flagship construction projects, there has not been a consistent enough approach across Wales to fully optimise procurement in making a marked difference to the economy. I note at this point that procurement is not viewed as a panacea to all national problems. The untapped potential and scope was noted in the Community Benefits review (2013) (not published) and Joint Bidding Lessons Learned report (2015) (published). In my experience of international Public Procurement practices and observations over the years, Wales designs some of the most innovative procurement policies globally, but invests little, if any, funds in their implementation. Today, ironically, I have received another request by email for advice and support; “there is some frustration amongst companies where they believe they are missing out on the business as it is being placed outside of Wales”.
The Welsh Public Procurement Policy Statement (WPPPS) was last updated in 2015. Since then, we have experienced the EU Referendum, new procurement policies (Code of Practice) and several new legislations including Well-being of Future Generations Act (Wales) 2015; Modern Slavery Act 2015; and Public Contracts Regulations 2015. In Wales, we have also gone through change in Cabinet Secretary’s support since 2015. The Referendum has led to political uncertainty in Wales and the UK, which has driven a perceived barrier between society and the government, not just in Wales. The Referendum has triggered social unrest which indicates a lack of trust and confidence. All of these substantial milestone changes will inevitably have impacted procurement and the market environment. This is at a time when pre-market engagement in procurement has become essential to drive best value and competition for public contracts. Recent discussions (last 6 months) with several procurement professionals in Wales reveals that the sector is ‘waiting’ for new direction through the WPPPS and the unexpected absence of an update has created some uncertainty about strategic emphasis and direction.
We might first question whether “Prosperity for All” was the appropriate phrasing given the current economic situation in Wales. To prosper, we first need to improve professional opportunities for those employed. The public sector in Wales employs 27.6% of people living in Wales which, compared to UK figures, is a much higher ratio than those people employed in the private sector. This means that any minor changes have a greater impact on the national economy. Internal promotional opportunities are key for driving skills and salaries up which will in turn improve the economic situation in Wales. Yet, Welsh Government report that median gross weekly earnings for full-time adults working in Wales increased by 1.0 per cent between 2016 and 2017, compared to a 2.2 per cent increase across the UK.
The methodology developed by Value Wales and deployed for producing fitness check reports by KPMG (2013) and PMMS (2014) enabled a snapshot view of the current fitness of procurement across the public bodies in Wales and these individual reports were published by Welsh Government. The report findings highlighted variation in approaches and level of professional competence across sectors (e.g. LA vs HE) and within sectors (e.g. HEPC). In PMMS report, key activities were frequently highlighted for improvement such as strategic development, action plan design, implementation of category management strategies, use of basic tools developed by Value Wales, market engagement, and value adding benefits recognised through effective procurement. Whilst these reports provide us with benchmark comparisons, they do not enable us to reflect on year on year improvement. This limits the analysis in terms of understanding the journey and in showcasing what ‘good procurement’ looks like.
In these reports, not enough emphasis has been placed on the current lack of understanding about the strategic relevance of procurement in Wales. The fitness checks identified this issue, but the method and presentation of the final results somewhat masked and diluted the consistent findings, which should have been realised from these investigations.
The Home Grown Talent project funded by WEFO provided opportunity for 25 young professionals. Whilst the project was seen as an opportunity to grow procurement expertise in public sector in Wales, this did not transpire. Many of the candidates moved to private sector organisations, taking the government invested skills with them. Whilst this evidences success for the individual candidates and is testimony to the quality of the training provided, for Welsh Government, this loss of skills represented a major failure for that project. A recent ‘request for information’ reported that it was not known how many candidates remained in employment with Welsh Government. The absence of this type of data and issues with transparency is a sign of mismanagement and failure.
Recruitment of skilled procurement professionals continues to be a major stumbling block as part of the procurement delivery plan. In many instances, public organisations are faced with the dilemma of employing from a small pool of applicants rather than employing the right person who is adequately experienced and qualified for the job. There seems to be a shortage of procurement professionals who consider public procurement in Wales as their career of choice. These constant shortages place even greater pressures on remaining staff and presents higher risk for government. Three senior procurement executives [that I am aware of] took early retirement in the last eighteen months and they have not been replaced. This does not leave the remaining procurement teams with much confidence about the significance of procurement in Wales and the leadership that it requires to constantly deliver best value when facing severe budget cuts.
Most public bodies now embrace the electronic tools and software available but there remains challenges with basic needs, such as broadband and internet access in some parts of Wales. This doesn’t seem to have been noted in the reports. It is disappointing to see that some Local Authorities still do not engage fully with Sell2Wales for advertising contract opportunities. This is not helped by the introduction of other supplier portals such as Contracts Finder and Supply2Gov. It is also worth noting the flexibility when engaging with these portals. For e