‘Procurement policy needs overhaul’ – FSB
ANEW approach in Wales is needed to ensure that more of the billions of pounds spent annually on public sector contracts go to SMEs, says FSB Wales.
The business body said that the next Welsh Government should overhaul the current procurement regime, which it said was designed in such a way to ensure that larger firms are able to win the lion’s share of contracts on value.
Previous FSB Wales research with the Centre for Local Economic Strategies found that for every £1 spent with a local SME approximately 63p is recycled into the local economy versus 40p with a larger company.
Despite this, research has also found that 60% of SMEs find that there are barriers to bidding for public sector contracts, and 28% do not feel able to compete with bigger suppliers. Moreover, 27% feel that the relevant eligibility criteria (such as level of turnover or relevant standards) tends to exclude them.
FSB has also called for key principles to be the foundation of any future public procurement policy – providing good value to the taxpayer; allowing for competition in the marketplace; being fully transparent and accessible to all firms; and serving as a mechanism to grow smaller businesses. Powered by
It said some of the barriers to SME engagement with procurement in Wales include a lack of a developed procurement profession. It said while it would like to see contracts broken up into smaller portions to allow for SMEs to be involved in more opportunities, in practice practitioners were under pressure to deliver tenders in the fastest, cheapest way, meaning the management cost of presenting SME-friendly tenders goes by the wayside.
They also point to a lack of a statutory footing for procurement. While the best-practice measures related to procurement are encouraged, they are not legally mandated in the same way as planning rules. This, claims the FSB, makes it difficult to achieve significant improvements when a number of different authorities are involved.
Ben Francis, FSB Wales policy chair, said:““So much more can be achieved if the next Welsh Government implements a proactive SME procurement policy and such an approach can be central to rebuilding our economy in a resilient and sustainable way after coronavirus.
We look forward to working with all of the parties to develop what this could look like.
“FSB would look for the next Welsh Government to explore creating legislation to ensure that best practice on procurement is implemented in a much more widespread way.
“There also needs to be more investment to ensure that there is support for the procurement profession to do the things that they currently struggle to. We want to see procurement contracts broken down into smaller chunks that are accessible to SMEs, but this can’t be done when the only objective is to get procurement contracts out of the door as quickly as possible
“At a time when Wales’ economy needs all of the support that we can offer it, procurement policy has to be a part of that picture. Local authorities across Wales have undertaken campaigns imploring individuals to shop locally wherever possible in order to help local businesses recover from the impact of Covid-19, and we’d like them to consider that they have a role in this through their own spending practices, too.
“If we get procurement policy right, we can all benefit from a Welsh economy.”