Procurement activity: annual report 2018 to 2019

1. Introduction

This document is the second annual report by Scottish Ministers on the procurement activity of higher spending public bodies in Scotland. It reflects the Scottish Government’s ongoing commitment to promote better and more sustainable procurement practices – as underpinned by the Procurement Reform (Scotland) Act 2014 (‘the 2014 Act’).

The report focuses mainly on the procurement activity of more than 100 Scottish public bodies in their 2018 to 2019 financial year, including specific activity which demonstrates the positive impact that public procurement can have in delivering sustainable, inclusive economic growth in a way that is open and connected and that is good for businesses, their employees, society, places and communities. These commitments are underpinned by our National Performance Framework, which describes the kind of Scotland we aim to create through our procurement activity.

Our Purpose

To focus on creating a more successful country with opportunities for all of Scotland to flourish through increased wellbeing, and sustainable and inclusive economic growth

Our Values

We are a society which treats all our people with kindness, dignity and compassion, respects the rule of law, and acts in an open and transparent way

National Outcomes

• Children and Young People: We grow up loved, safe and respected so that we realise our full potential
• Communities: We live in communities that are inclusive, empowered, resilient and safe
• Culture: We are creative and our vibrant and diverse cultures are expressed and enjoyed widely
• Economy: We have a globally competitive, entrepreneurial, inclusive and sustainable economy
• Education: We are well educated, skilled and able to contribute to society
• Environment: We value, enjoy, protect and enhance our environment
• Fair Work and Business: We have thriving and innovative businesses, with quality jobs and fair work for everyone
• Health: We are healthy and active
• Human Rights: We respect, protect and fulfil human rights and live free from discrimination
• International: We are open, connected and make a positive contribution internationally
• Poverty: We tackle poverty by sharing opportunities, wealth and power more equally

The report also takes stock of general progress to date against the ten ‘next steps’ set out in our previous annual report.

Legislative background and purpose of this report

‘Public procurement’ is the term we use to describe how Scottish public bodies set up and manage contracts, suppliers and supply chains to deliver goods, services and works. This can include goods like books and computers, services like health and social care, catering, and works like building roads and hospitals.

In Scotland, the 2014 Act is a core component of the legislation that Scottish public bodies must adhere to in their procurement exercises. The Act places a number of duties on public bodies regarding their procurement activities. This includes some general duties and also some more specific measures which aim to promote good, transparent and consistent practice in public procurement. More significantly for this report, the Act places an administrative requirement on higher spending public bodies (public bodies with an estimated regulated procurement^[1] spend of at least £5 million per year) to publish annual procurement reports on their regulated procurement activities, after the end of each financial year. In these reports, public bodies must address a series of minimum requirements by providing, for example, a summary of regulated procurements completed during the year. This process is designed to bring transparency to the procurement process.

Public bodies with a spend of less than £5 million are not required by the legislation to publish an annual procurement report, but are nevertheless encouraged to do so as a matter of good practice.

In addition to meeting the minimum requirements set out in the 2014 Act, the individual annual procurement reports also describe the organisational aims and objectives of each public body. This means that there is a degree of variation in the content of each individual report, and such variation is reflected in this overview report.

This report is not designed to consider all of the areas where public procurement can have an impact. Rather, its purpose is to provide an overview of public body procurement activity across Scotland and to help bring added transparency and visibility to the public procurement process.

The learning from this report will help to inform future thinking and activity around public procurement. This, in turn, will ensure that public procurement continues to make an important and positive contribution to sustainable and inclusive economic growth in Scotland.

Methodology

This report draws on a variety of relevant data sources. To gain an understanding of regulated procurement activity among higher spending public bodies, this report draws on information taken from the 110 annual procurement reports published by public bodies in Scotland and supplementary information provided by those bodies.^[2]

For the 2018 to 2019 annual reporting cycle, we devised a standardised data template and issued this to public bodies for them to complete alongside their annual procurement

report. The data template was designed to improve the consistency and completeness of some of the quantitative information contained in the annual reports – for example, by asking for information on the number of regulated procurements completed during the reporting year (and the value of these procurements). The information provided by public bodies in these data templates has been invaluable in providing an overview of procurement activity in Scotland.^[3]

This overview report is also informed by data from the Scottish Procurement Information Hub tool. The Hub enables Scottish public bodies to examine procurement spend by analysing accounts payable data – in 2018 to 2019, 102 Scottish public bodies had their data published on the Hub.^{[4], [5]} Amongst other sources, the report also uses data from the Public Contracts Scotland (PCS) website.

Care must be taken when reflecting on the data presented in this report. It is important not to draw too many direct comparisons between findings from each of the data sources – in particular, between the data from the annual procurement reports and that from the Hub – because various minor discrepancies and caveats apply to each dataset.^[6] Instead, we have focused on the overall picture that the data paints in relation to public procurement activity in Scotland.