Procurement activity: annual report 2021 to 2022

4. Conclusion

The 2021 to 2022 reporting year was one during which people, communities and organisations across Scotland continued to deal with the ongoing impact of the COVID-19 pandemic while also navigating the cost crisis. Despite this testing backdrop, over the year, the Scottish public sector continued to harness its procurement activity to generate a range of positive economic, social and environmental benefits for individuals and organisations across the country.

The nature of the contracts procured during the year suggests that public bodies were beginning to adjust to the ‘new normal’.

This was evident in the procuring of various contracts focusing on, for example, the online delivery of public services, with these contracts being procured alongside the more routine kinds of contracts that this report has typically highlighted in previous reporting years.

At the same time, the procurement spend data showed that businesses of all sizes, sectors and locations continued to benefit from the spend arising from public contracts. For example, public bodies carried out much of their procurement activity with suppliers in their local area, with around 43 pence in every pound being spent with suppliers based within the local area of the purchasing body. Levels of spend with micro, small and medium-sized businesses showed early indications of gradually returning to pre- pandemic levels. Meanwhile, third sector organisations and supported businesses continued to deliver public contracts as a means of generating an income.

This report represents another step forward in relation to data collection and analysis.

Firstly, it is encouraging that a record number of public bodies provided an annual procurement on time for analysis, with 132 bodies doing so for the 2021 to 2022 reporting year. A higher number of reports means a more robust sample and this, in turn, enables a deeper understanding of the impact of public procurement activity.

Second, the additional work undertaken on the procurement spend data this year – in particular, the efforts to bring the spend data in line with the Standard Industrial Classification and, separately, to link it to the Social Enterprise Census – have enabled a more detailed and deeper understanding of the types of businesses and organisations that benefit from public procurement spend, and to consider these findings within a wider business context.

In April 2023, the First Minister announced three new ‘missions’ for the Scottish Government to help shape its decision- making until the end of the current parliamentary term in 2026. These missions centred on the following three areas:

• equality – tackling poverty and protecting people from harm
• opportunity – a fair, green and growing economy
• community – prioritising our public services.

Public procurement will play an important role in helping the Scottish Government and the wider public sector to deliver in each of these three interdependent areas – for example, by using public contracts as an opportunity to engage and spend with businesses in Scotland’s most deprived

communities, by embedding climate and Fair Work considerations into public contracts, and by imposing community benefit requirements in contracts, as a means of achieving a wide variety of impacts within local communities.

It is therefore important that public bodies continue to use all of the levers at their disposal to extract maximum economic, social and environmental value from their procurement processes. It is hoped that continued progress in this regard will be demonstrated in future reporting years.