Thanks to Dr Pedro Telles, whose website here pointed us towards a recent publication from the Welsh government. “Securing Wales’ Future – Transition from the European Union to a new relationship with Europe” is a 63-page document looking at the implications of the UK leaving the EU with a focus on Wales. It covers points including as migration, constitutional issues, investment, the Single Market and more.
There isn’t a huge amount on public procurement, but there is a short section that sits within the “Social and Environmental Protection and Values” chapter, which might indicate how the document sees the topic. Here is the whole commentary on public procurement.
We believe that, to the extent a new settlement with the EU enables the UK to move away from EU procurement rules, it is essential that the Welsh Government secures full control of public procurement policy for application across the Welsh public sector. This should allow a rethink of current limitations to using procurement proactively as a tool to generate local economic activity and may enable us – where it represents value for money to do so – to keep public sector expenditure in Wales.
Wales based suppliers currently win 55% of the annual £5.5bn public procurement expenditure. A new set of rules which consider the total cost of contract decisions could enable this figure to be further increased, supporting jobs and acting as a catalyst for Wales’ future industrial and economic strategy. The current procurement legislation also provides a definition of disadvantaged workers and supported businesses to which contracts may be reserved. With full control over procurement policy, this definition could be reviewed to ensure that it accurately reflects the demographics of Wales’ population, driving further benefits for people in Wales.
There is some curious wording here as well as a fundamental paradox. Let’s take the wording first. Look at the end of the first paragraph. “This… may enable us – where it represents value for money to do so – to keep public sector expenditure in Wales”.
But surely, if a contract decision represents value for money, then it would be made already under the current regime? Is this suggesting that there are Welsh suppliers whose proposals represent value for money, yet they are not currently winning contracts? That seems most unlikely. And we don’t understand really how the “total cost of contract decisions” is not taken into account already.
Or does it mean that you can keep public expenditure in Wales if it offers some notional definition of “value for money” – even if it is not the best value for money? “Cardiff Computers Ltd” are only 10% more expensive for laptops than “Cheltenham Computers Ltd” so let’s give them the work, it still looks like value for money … You can see the obvious issues with this of course, and it would be a charter for corruption as well as a waste of public money.
Then the philosophical paradox is that the document makes it clear Wales still wants full access to the Single Market … “we believe that continuing full and unfettered access to Europe’s Single Market is vital to Wales’ forward economic interests …”
So the aim is to have a public procurement policy that enables spend to be maximised in Wales and in effect discriminates against potential suppliers from other countries – even from England we assume. Yet at the same time, firms in Wales should have free and open access to doing business everywhere else in Europe.
We are big admirers of much that Wales has done and is doing in public procurement. But as Telles puts it, “I think they mean “one way street access” to the Single Market”. Having your cake and eating it, we might say.