Annual report on procurement activity in Scotland: 2019

8. Conclusion and next steps

This report shows that good progress continues to be made on public procurement in Scotland. The individual annual procurement reports published last year by Scottish public bodies, along with other information contained within this report, not only support our continued drive to improve transparency and practice, they also illustrate the scale, the scope and the reach of public procurement activity in Scotland.

Public procurement remains a significant contributor to the Scottish economy and we continue to see increased access to public sector contracts year on year. While the full impact and benefits of the recent changes in public procurement legislation are yet to be realised, there are signs that these changes are positively influencing practice and securing wider benefits for our public services and our communities. There is more routine use of community benefit requirements in contract notices and these are delivering a range of benefits such as job creation, training and qualification, work placement and subcontract opportunities. We are also seeing greater consideration of Fair Work practices and the payment of the real Living Wage to those working on public contracts. At the same time, public bodies across Scotland are continuing to drive efficiencies and savings from their public procurement spend. And we continue to enhance our international reputation for good practice, recognised by other countries and administrations.

We cannot afford to stand still, however. There was variation in the level and type of information presented by public bodies in their individual annual procurement reports and on which this report is based. For example, some public bodies included a high-level summary of their community benefits, some listed each community benefit requirement imposed, and a small number provided a list of each contract awarded including details of any community benefit requirements attached to each.

Equally, information on the number of third sector bodies and supported businesses winning public sector contracts is more difficult to quantify due to data limitations. The lack of data on third sector bodies and supported businesses winning public contracts highlights a need for us to explore how we might improve visibility of that data. Future annual procurement reports from individual public bodies across Scotland offers one way to improve that picture in the short to medium term.

Many of the annual procurement reports included information on whether regulated procurements had complied with the public body's procurement strategy, with just under half of all reports clearly indicating that regulated procurements had complied with the public body's procurement strategy. While some bodies simply listed compliance or non-compliance by each regulated contract, others included a summary statement.

In those annual procurement reports where a review was provided and a procurement was found not to be compliant with a public body's procurement strategy, not all included a clear statement on how the public body will ensure regulated procurements comply in future.

We now need to build on the steps taken by many Scottish public bodies in publishing their first annual procurement reports under the 2014 Act. We must improve management information and data, identify and share good practice, learn from one another, and remain committed to the continuous improvement of public procurement in Scotland.

Next steps

Through our commitments in Scotland's Economic Strategy and the Economic Action Plan, we are reshaping our strategic priorities to ensure continued alignment with the National Performance Framework. While service delivery, savings and efficiencies remain a priority, there is an increased focus on procurement that is:

• good for businesses and their employees
• good for society
• good for places and communities
• open and connected

We are already shaping a range of work that will support these four priorities. We will:

• do more to support small businesses and local supply chains by introducing an easily accessible portal drawing together the support available for businesses who aspire to use public contracts as a means to facilitate growth
• extend the reach of our policy on the advertising of sub-contract opportunities in Public Contracts Scotland. This will increase the opportunity for local supply chains to be established in the delivery of public contracts
• continue to champion faster payments, streamlining our purchase to pay processes, working with our suppliers to ensure they pay their sub-contractors promptly and encouraging the use of project bank accounts in suitable construction and infrastructure projects
• work to mainstream and extend the range of Scottish Government and public sector contracts in Scotland that Fair Work criteria apply to, improving pay and conditions for those working in our supply chain
• support public bodies in mainstreaming sustainable procurement decisions to maximise the benefits of our procurement spend for Scotland, including the pursuit of equality outcomes through procurement
• continue our work to mainstream the use of community benefit requirements in public contracts to deliver wider benefits for local communities and the wider society
• extend our engagement with the Construction industry and we will work with Construction Scotland to establish a range of procurement routes to facilitate the delivery of public assets in the built environment, both directly with SMEs and through local supply chains
• seek to build on the publication of annual procurement reports by improving management information and data, and securing greater consistency of that information, where appropriate, to better support public procurement in Scotland and ensure that procurement spend is being used to best effect
• continue to share best practice and evolve our systems, tools and processes
• commit to publishing a spend dashboard on an annual basis as part of our ongoing work on improving transparency of public procurement in Scotland