Procurement activity: annual report 2019 to 2020

Ministerial Foreword

The Scottish Government has bold and ambitious plans for Scotland’s future. A future where Scotland is a world leader and a better place to live and work. Procurement plays a critical role in supporting aspirations.

Through taking a distinctive approach to the pursuit of inclusive, net zero economic growth, the Scottish public sector is using its considerable procurement spending power of £13.3 billion to focus on the singular goal of delivering for Scotland.

The £13.3 billion of procurement spend supported around £11.8 billion of economic activity and around 120,000 full-time equivalent jobs, contributing around £6.5 billion to Scottish GDP. The report reveals that procurement spend with Scottish-based suppliers has gone up, as has spend with suppliers based in the 60% most disadvantaged areas in Scotland compared to the previous report.

This report demonstrates the actions being taken across the public sector to address global, national and local issues. The management of the EU Transition made this a challenging year, with the arrival of the COVID-19 pandemic in March setting the tone for an even more challenging year to come, placing procurement at the forefront of service delivery and keeping essential public services running.

To help address this the Scottish Government has built upon previous successes, striving to continuously improve public procurement in Scotland. There are many examples of innovation, professionalism, and determination to meet these challenges. The public sector has delivered with integrity and speed, and now more than ever, we need to apply the lessons learned during the pandemic to our ways of working to build a stronger future. Through embedding greater levels of resilience and diversity in supply chains and working with business communities, the public sector can really harness innovation and use its skills and strengths to ensure that Scotland will thrive.

Public bodies are continuing to work effectively with partners and stakeholders across Scotland, conducting their procurement processes in a manner that is good for society, good for businesses and their employees, good for places and communities, and open and connected. Public bodies are continuing to embed community benefits and fair work requirements into public contracts, delivering a wide range of benefits for businesses, communities and society as a whole. These contribute to a range of national and local outcomes relating to employability, skills and tackling inequalities, ensuring that under-represented groups and those in our most disadvantaged communities are not being left behind.

To support this the public sector continues to improve access to contracts for SMEs, the third sector and supported businesses, ensuring they have the support they need to deliver on these requirements and bid for contracts. During the reporting period, 79% of suppliers winning contracts on Public Contracts Scotland were SMEs and 63% were Scottish-based SMEs, clearly demonstrating our commitment to them.

It is also vitally important that the Scottish Government continues to focus on using procurement to deliver on its broader ambitions. There is an imperative to respond to the global challenge of climate change and the Scottish Government has set ambitious carbon reduction targets. It is committed to using procurement to underpin those targets and will continue to embed climate considerations into its approaches, integrating climate action into contract and supplier management activities and, by working closely with stakeholders and suppliers, to influence a green recovery from the COVID-19 pandemic, and wider circular economy ambitions. That includes challenging ‘whether’ we buy, ‘what’ we buy, and ‘how much’ we buy, as well as ‘how’ we buy.

As we look to the future and the economic challenges we face, the Scottish Government will be progressive, bold and ambitious, leveraging the full power of procurement to deliver better impact and outcomes for the people living in Scotland and deliver its ambitions for a more inclusive and green society.

The Scottish Government invites everyone who has an interest in doing business with the public sector to take advantage of the progressive approach to public procurement and think innovatively about how public bodies can deliver fair work practices, a strong recovery and provide maximum value for the communities, businesses and people of Scotland together.