IN 2015-16, public bodies in Wales spent around £6 billion through procurement on a range of goods, services and works but need to improve their performance to ensure value for money.
That’s the message of wide-ranging report from the Wales Audit Office (WAO), which suggests that the existing procurement process provides no more than mixed results.
In a changing landscape, public bodies face challenges in balancing potentially competing procurement priorities, responding to new policy, legislation and technology, and in the recruitment and retention of key personnel.
The Welsh Government’s 2015 policy statement sets out the overriding principles for public procurement, in the context of relevant EU and UK procurement legislation.
However, the WAO report has found that national governance arrangements could be strengthened, with the national procurement board currently having limited effectiveness.
Of the £6 billion spent through procurement in 2015-16, £880 million was through collaborative procurement managed by the three main Wales-based consortia and public buying organisations. While these organisations are reporting financial savings and other benefits, public bodies have mixed views on their effectiveness.
The report also highlights clear scope for improvement in procurement arrangements at a local level. Public bodies have experienced several notable procurement failures and our audit work continues to identify examples of other weaknesses.
New legislation – including the Well-being of Future Generations (Wales) Act 2015 – presents new challenges and despite some investment by the Welsh Government, public bodies continue to have problems in recruiting and retaining qualified procurement personnel.
Developments in technology present opportunities to make procurement processes more efficient but are not yet being used consistently.
The report makes eight recommendations on issues including:
- Membership of the national Procurement Board – the Welsh Government plans to merge this board with the National Procurement Service board.
- Regular review by public bodies of their procurement strategies and polices to ensure that these stay up to date with the changing landscape.
- The scope of any future Procurement Fitness Checks – the Welsh Government has been planning to roll out a new programme of checks.
- For the Welsh Government to explore the impact of differential pay for procurement staff across different sectors and any potential solutions.
Auditor General, Huw Vaughan Thomas, said: “Procurement is one of the key ways in which public bodies need to be able to demonstrate that they are securing value for money. Our findings are clear: while public bodies face a range of challenges in a changing procurement landscape, they can do more to strengthen their procurement arrangements and recent examples highlight the financial and reputational risks of getting procurement wrong.”
The Chair of the National Assembly’s Public Accounts Committee, Nick Ramsay AM, said: “The Committee has been concerned by recent examples of poor procurement practice and this report emphasises the significant amount of money spent each year by public bodies through their procurement activity.
“There are clearly opportunities to ensure better value for money, not just by avoiding obviously poor practice but also by maximising wider benefits from contracts where possible.
“Public bodies need to ensure that they have access to the commercial skills necessary to manage potentially complex procurement activity and it is concerning that, despite some investment by the Welsh Government, public bodies are still facing difficulties recruiting and retaining the skills they need.
“The Committee will be considering the findings in this report and in the separate report that the Auditor General is preparing about the National Procurement Service over the coming weeks.”
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