In recent years, mobilising the power of procurement has been a recurrent call from experts across a number of our assignments for Welsh Government Ministers, whether to drive efficiency, effectiveness, inclusivity or equality (Parken, 2018; Williams, 2017; Green et al., 2017; Marsden et al., 2016; Trickey, 2016). A shift towards new procurement approaches is a strategic decision: it requires a conscious reordering of the priorities inherent in current procurement arrangements; a very different relationship between public services and third parties; and acceptance of a different type of risk. For this reason, the Wales Centre for Public Policy is seeking to spark the interest of senior public service executives, boards and political leaders, providing evidence and expertise to better support them in taking on the challenge of fully maximising the social, environmental and economic value of procurement across the public sector in order to leverage the best possible outcomes for the people of Wales now and in the future.
We are currently developing three evidence reviews: examining sustainable procurement; procuring for innovation; and not-for-profit provision of services.
The Welsh public sector spends approximately £6 billion annually on goods, services and works, however it is widely believed that there is room for public services to achieve greater and more strategic added value from their spend through Sustainable Public Procurement (SPP) approaches. SPP involves building social, environmental and economic benefits into public procurement activities. The Wellbeing of Future Generations Act and the Welsh Government’s Economic Action Plan: Prosperity for All provide a supportive policy context for SPP, but what does evidence tell us about the factors that may hinder or enable SPP in practice? We will consider how SPP is used to achieve added value from public spend, the state of the evidence on the effectiveness of SPP approaches and what Welsh public services can learn from this.
Interest is growing in Wales in harnessing public procurement to enable innovation, however for various structural reasons, the public sector is not a natural customer for, typically smaller, innovative companies. Our work will explore the motivations for using procurement to stimulate innovation in the development and delivery of public services. It will explore evidence and expert opinion on the difference such measures can make by considering public service performance (efficiency and efficacy), as well as social and economic value. It will also examine the distinction between innovation ‘in’ and innovation ‘through’ public bodies and review the evidence on the effectiveness of approaches to procuring for innovation – both of what works, and what doesn’t.
Here we will explore the evidence on the social, economic and environmental benefits achieved when social businesses and third sector organisations are exclusively commissioned by public services. In theory these organisations – including charities, social enterprises, community interest companies, employee-owned mutual and cooperatives – both eliminate (excessive) profit making and are more likely to afford additional socio-economic benefits via their operating models and supply chains. Such perceived benefits of social businesses can appeal to decision-makers values – but what is the evidence that these benefits are in fact achieved? Are there also costs that need to be taken into account? And if the decision to source only from not-for profit providers is taken, what conditions and measures are most conducive to achieving the desired ‘added value’?
Context and coordination
Procurement in Wales is under useful critical scrutiny at the current time. The projects outlined here are intended to constructively supplement recent work by the Wales Audit Office and the Public Accounts Committee of the National Assembly for Wales, as well as work underway across the Welsh Government and partners, such as the Office of the Future Generations Commissioner and Cynnal Cymru. We have noted that many Public Service Boards and Public Bodies refer to procurement objectives in their plans. Our aim is to provide public service leaders across Wales – whose organisations are engaged in procuring goods, services and works every day – with evidence and expert insight that can help them to define and lead a more effective, strategic approach to procurement into the future. We therefore welcome the opportunity to coordinate with interested colleagues.