Body created to save councils cash running at a loss
WALES’ top public spending watchdog has raised concerns about a body that was set up to save Welsh public bodies money – but which has been running at a loss.
In a major report today on how Welsh public bodies spend £6bn a year, Auditor General for Wales Huw Vaughan Thomas said that the National Procurement Service was delivering “less than anticipated savings”.
The body was set up in September 2013 to enable public bodies to save money buy pooling their purchasing power. However, he said it was not being used “as much as anticipated”.
He said that only £149m had been spent through the body last year – a fraction of the £522m expected – and that it was not delivering the £25m of savings expected.
The NPS has published figures suggesting it saved members £14.8m, however Mr Thomas said that the figures were “disputed by some members”.
Although it had been expected to be self financing, the NPS generated income of just £339,143, compared with operating costs of £2.4m, in 2015-16.
The Auditor General wrote: “Public bodies are not using National Procurement Service frameworks as much as anticipated, resulting in concerns over its funding, less than anticipated savings and with many of its members dissatisfied.”
His report made many recommendations and said that public bodies “can do more to strengthen their procurement arrangements”.
A Welsh Government spokesperson said: “We welcome the findings of the report and are pleased it identifies the leadership we have shown in providing direction and support for public bodies in Wales on procurement.
“However, we acknowledge that there is further opportunity to build on the progress that has already been achieved. That is why the Finance Secretary recently announced his intention to refocus the National Procurement Service and Value Wales within the Welsh Government. We will consider all of the recommendations in the report as we will take forward further work in collaboration with the public sector.”
Both Plaid Cymru and the Welsh Conservatives have criticised the Welsh Government’s execution of the procurement policies.
Shadow Economy Secretary Russell George said: “The Auditor General’s report highlights chronic issues with procurement in Wales, and the Welsh Government must respond to these concerns by taking steps to reassure the public that value for money is being achieved. We also need to see a greater focus on ensuring that Welsh firms are able to be more competitive in bidding for public sector procurement contracts.
“Procurement procedures can play a vital role in growing the Welsh economy, by creating job opportunities and encouraging firms to grow and expand. Sadly, in recent years Welsh businesses have missed out on almost half of all major contracts.
“Value for money extends beyond process, and we need to ensure that the country gets the jobs and investment it needs and deserves.”
Plaid Cymru Shadow Cabinet Secretary for Finance and Economy Adam Price added: “Procurement is a powerful lever that can be used to deliver economic, environmental and social benefits.
“However, due to the poor implementation of policies set by the Welsh Government, the value of procurement to the local economy is not being fully realised.
“Plaid Cymru has long called for better utilisation of procurement practices in Wales in order to grow the Welsh economy and support home-grown businesses and helping them to grow.
“According to ValueWales (an internal unit within the Welsh Government), every 1% increase in procurement levels in Wales will create 2,000 jobs.
“A Plaid Cymru government would create 40,000 new private sector jobs in Wales by increasing the number of public sector contracts going to businesses in Wales by 20%.
“This would mean that more money would be circulating within the local economy, creating more jobs and supporting businesses in Wales.”