Wales Needs to Start Treating Procurement as an Economic Function

We spend a lot of time talking about how Wales can strengthen its economy, support local businesses, develop skills and create better opportunities in our communities.

But there is already a very significant economic lever sitting within the public sector. It’s procurement.

Wales spends around £11 billion through public procurement each year, but I don’t think we should look at that simply as money that needs to be spent efficiently. We should look at it as influence.

I’ve said before that it’s our duty to do more with the money that we spend than simply spend it. For me, that’s what the next stage of the procurement conversation in Wales needs to be about.

Of course, public bodies need to purchase the goods and services required to deliver frontline services, but we need quality, value for money and robust processes.

But the question shouldn’t end with: “Did we buy what we needed at an acceptable price?” We should also be asking: “What else did we achieve with that money?”

Furthermore, did we support employment and create opportunities for SMEs? Did we strengthen a supply chain whilst developing apprenticeships and skills? Did we deliver social value or fair work? And ultimately, did that spending make a wider contribution to the communities we serve?

That’s why I think we need to stop treating procurement as an isolated administrative activity.

Procurement, economic development, supply chain management and contract management are often discussed as though they are separate things, but in reality, they’re all connected.

The process starts with understanding what we need to achieve. It continues through how we engage the market and purchase something, but it shouldn’t finish when a contract is awarded.

We then need to understand how that contract is performing, what’s happening within the supply chain and whether we’re delivering the wider outcomes we wanted in the first place.

To do that properly requires capability and capacity.

One of my concerns is that procurement can sometimes become the Cinderella service of the public sector. We expect an enormous amount from relatively small teams while adding further administrative and reporting requirements.

If we genuinely believe procurement can help deliver economic, social and community outcomes, then we have to invest in the people and professional capability required to make that happen.

A major corporation wouldn’t regard procurement and supply chain management as a back-office afterthought. It would recognise them as strategically important functions and the public sector should be no different.

And in Wales, perhaps the opportunity is even greater.

We have the ability to connect procurement much more deliberately with our ambitions around local economic development, skills, SMEs, fair work and stronger Welsh supply chains.

That doesn’t mean every pound can or should stay within Wales, because supply chains are far more complicated than that. It means understanding where public money ultimately creates value and using our purchasing power intelligently to maximise that impact.

For me, that’s the real opportunity.