Transforming public services through innovative procurement
In our fourth and final article on the thematic areas of Innovate to Save, Professor Kevin Morgan and Dr Jane Lynch look at the ways in which innovate procurement can transform Wales' public services.
Creating more innovative public services is no longer an option for us in Wales because radical change is being forced on us by the brutalising effects of a pre-Keynesian ideology. The key challenge for the foreseeable future is how to secure sustainability in an age of austerity.
Therefore, we welcome The Well-Being of Future Generations (Wales) Act 2015 as a unique and pioneering piece of legislation endorsed by the United Nations which sets out clear expectations of wellbeing goals for 44 public services in Wales to follow.
"We hope that what Wales is doing today, the world will do tomorrow. Action, more than words, is the hope for our current and future generations" - United Nations, 2015.
The Act makes it obligatory for public bodies in Wales to challenge the ‘business as usual’ approach and develop the necessary changes to build a legacy for future generations. In this respect, public procurement is a ‘sleeping giant’ because of its untapped power to effect long term social, economic, environmental and cultural change. When it is deployed effectively, the power of procurement can secure maximum value for money enhancing wider community benefits. Designing more innovative public procurement is central to making these changes happen and can help us to meet this challenge of maximum value by furnishing such things as nutritious food for schools and hospitals.
The total annual government spend on goods and services in Wales is marginally under £6 billion annually. From this, the public sector in Wales spends over £70 million per year on food with approximately £20 million of that on fresh food. Procurement plays a central role in ensuring that this spend is managed in a sustainable manner. The Wales Procurement Policy Statement (WPPS), (first launched in 2012) refreshed in 2015, sets out the governing principles to (i) make it easier for small and medium-sized enterprises to participate in and benefit from public procurement contracts using SQuID by reducing paperwork and breaking up contracts into smaller and more feasible lots; (ii) promote the concept of whole-life costing, which allows contracting authorities to take account of social and environmental factors when weighing up the costs and benefits of competing offers; and (iii) extend the special measures already in place for sheltered workshops and employment programmes to embrace a broader range of beneficiaries.
This regulatory review ought to have garnered more interest because it heralds the birth of a much more sustainable public procurement policy while using the power of purchase to secure maximum value for money. So, in principle, new policies and legislation lay a firm foundation for Wales to evidence positive impact utilising some of the most innovative procurement strategies; however, there are many hurdles to overcome with implementation.
Some of the challenges facing procurement include:
- commercial leadership in procurement – designing new processes for improving end user value
- recognising the strategic scope of procurement - the direct links between public spend and achieving the wider national sustainability goals
- professional capacity, competence and skills deficit – e.g. the concept of whole-life costing can be overlooked or considered a tick box exercise
- alignment of regional priorities when designing aggregated frameworks - there are diverse demographic challenges to overcome even in a small nation such as Wales with population of three million.
In addressing these procurement challenges, it is necessary to explore both buy and supply perspectives. Investigations are required in understanding the scope of innovative procurement. Further, obtaining executive level buy in is vital for improving the current disintegration of public services. Our work has already begun. A report, Good Food for All was presented at a workshop bringing buy and supply sides together. The Tackling Poverty through the Welsh Supply Chain full-day research workshop was funded through Cardiff Business School to demonstrate how the school’s new Public Value strategy may be implemented – Innovate to Save Fund, a partnership between Welsh Government and Y-Lab will enable follow up research and workshop events like this to be offered for important exploratory research. Third sector organisations contributed greatly to the Public Value workshop and this sector continues to play a vital role in food procurement. The Innovate to Save Fund would enable this extensive and important research to get truly underway.