Procurex Wales Event – Wellbeing and Public Procurement

We gave our initial impressions of the Procurex Wales event here earlier this month. This week, we're featuring here and on the Public Spend Forum Europe site some further material relating to various sessions we saw or were involved with.

One such session was a panel discussion I chaired with Jonathan Hopkins and Jane Lynch, looking at "policy through procurement" initiatives. Hopkins is the Deputy Director, Procurement Policy and Capability, for the Welsh Government. Lynch is a lecturer at Cardiff Business School and also works with the Institute for Collaborative Working (ICW) in Wales, which encourages smaller firms to collaborate to win public contracts.

These wider policy through procurement issues are particularly prevalent in Wales, including not just social value (which English local government must consider in its procurement activities too) but the new Future Generations (Wales) Act 2015 Wellbeing Act.   There is also the initiative to address working conditions in the supply chain (which we will cover separately).

Under the Wellbeing Act, public bodies need to make sure that when making their decisions they consider the impact they could have on people living their lives in Wales in the future. That includes procurement decisions, although it was clear from the discussion that there isn’t a clear set of rules defining exactly how procurement is supposed to take this into account.

However, Hopkins talked about using the Wellbeing Act to stimulate thought about how procurement could support these wider goals. He did not see it as a shopping list of "things you have to do" but more a driver for thinking about different ways in which any particular procurement exercise could be used to generate wider value.

There are several key issues here. There is the simple question of whether procurement - and other stakeholders such as budget holders - understand what they are supposed to do or legally required to do.  How are procurement people being trained and educated about these issues, and at a time when public expenditure is under pressure, are we investing enough in improving the skills of our procurement people as we expect them to handle these more complex issues? Lynch expressed some concern about these issues, and this is true not just in Wales but throughout the UK, Europe and beyond of course.

Then we have questions about execution. How do you translate the good intentions around these wider issues into procurement action, and do it in a workable and legal manner? Approaches must be practical and affordable, and we don't want to see lots of legal challenges from firms who feel they lost out to spurious "social value" or "wellbeing" related evaluation processes. And in our experience, the chances of fraud and corruption increase as supplier selection decisions move further away from a pure “lowest cost” basis.

Finally, we have the question of measurement. This is a point that fascinates me. How will Wales as a nation know in a few years’ time that considering wellbeing in procurement (and other) decisions has paid off? Or indeed, how will we know if it cost more - have supplier charges increased because they are spending money on things that may deliver social value or wellbeing but also cost the taxpayer more?

Unfortunately, we did not record the discussion in Cardiff, so can’t bring you all the comments we heard in our brief but interesting session. Wales is leading the way though in terms of considering some of these issues, so we will be keeping close to progress and learning coming from the principality, and perhaps some of these questions will in time get answered.

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First Voice

  1. Dan:

    There are two important issues for me:

    1. How much of this has been bought into a lower level? Its all very well the Welsh Government announcing new policies for procurement across Wales, but how committed are the individual authorities or departments to this at a time when they’re under pressure to make budget savings? Scotland are making good progress with this, but Scotland have the freedom to produce their own version of the Public Contract Regulations – Wales have to make do with the ‘English’ version.

    2. Are the individual authorities able to invest in this area? Its not difficult to imagine that social value initiatives will result in higher prices for the buyer. If they can’t bear the higher costs, any attempt at taking social value into account when evaluating bids will be overridden by more commercially focussed criteria. At a practical level, if you have to divide the total available score of 100 amongst price, quality and social value, then unless you’re willing to reduce that share allotted to the price, then the social value criteria will be minimal at best – especially when social value covers such a wide range of activities (employment, training, environment, equality and diversity, local suppliers etc).

    In my experience, it’ll just be left up to procurement to sort out, because this will just be seen as a procurement issue, and nothing will change. In an ideal world, procurers will be able to assess the single piece of social value that will be optimal for a given contract and ensure it’s delivered as part of the regular contract management process, but the inevitable lack of training and direction will ensure this is just a pipe dream.

    Always beware procurement decisions made by policy people. Sometimes its gold, a lot of the time its just wishful thinking.

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