Procurement activity: annual report 2019 to 2020

1. Introduction

Background and legislative context

The Scottish Government uses the term ‘public procurement’ to describe how Scottish public bodies set up and manage contracts, suppliers and supply chains to deliver goods, services and construction (called ‘works’ in procurement legislation).

In Scotland, the Procurement Reform (Scotland) Act 2014 (‘the 2014 Act’) provides a legislative underpinning to Scottish public bodies’ procurement practices.^[1] The 2014 Act is designed to support economic growth through improved procurement practice by providing a national legislative framework for sustainable public procurement. It imposes a small number of general duties on public bodies in relation to their procurement activities, as well as some more specific measures designed to promote transparency and consistency across the public sector.

The 2014 Act also places a requirement on public bodies which expect to have significant procurement expenditure (at least £5 million regulated procurement spend)^[2] in a given financial year, to prepare an annual report on its regulated procurement activities after the end of that financial year. While public bodies with an estimated regulated procurement spend of less than £5 million are not required to produce an annual procurement report, some still do so as a matter of good practice. Although the 2014 Act contains a small number of minimum requirements for annual procurement reports, each individual report also describes the organisational aims and objectives of the public body it represents. As such, the annual procurement reports are somewhat varied in their contents.

Drawing on data from the annual procurement reports for the 2019 to 2020 reporting year and from other sources, this document is the third annual report by Scottish Ministers on the procurement activity of higher spending public bodies in Scotland. It provides an overview of public body procurement activity across Scotland and helps to bring added transparency and visibility to the public procurement process.

In Scotland, public sector procurement activity is underpinned by four key outcomes which are aligned to the Scottish Government’s National Performance Framework. With these four outcomes in mind, this report will demonstrate the role of the Scottish public sector in delivering sustainable, inclusive economic growth in a manner that is:

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

Figure 1: The four outcomes for Scottish public sector procurement

Our Purpose

To use our collective spending power to deliver sustainable and inclusive economic growth

• Good for businesses their employees
• Good for society
• Good for places and communities
• Open and Connected

The importance of public procurement in driving such growth is all the more relevant in the context of our recovery from the COVID-19 pandemic. While Scotland formally entered a lockdown with just one week of the standard 2019 to 2020 financial year remaining (which most – but not all – public bodies adhere to), this report will provide some insight into the ways in which public bodies, suppliers and wider supply chains were affected by the initial stages of the pandemic. While the Scottish Government expects to report more fully on the impact of the pandemic on public procurement in the next report, the information from the annual procurement reports for this reporting cycle suggests that COVID-19 was already having an impact on procurement activity at the end of the 2019 to 2020 financial year.

Methodology

This report uses information taken from the 115 annual procurement reports that were published by Scottish public bodies to cover the 2019 to 2020 reporting period – this is a slight increase on the 110 reports received for analysis in the last report. The information from these reports is analysed alongside the quantitative data obtained through the standardised data template and

other supplementary information provided by those bodies. Figure 2 below provides a breakdown of the 115 annual procurement reports analysed by sector.

Figure 2: Number of annual procurement reports analysed by sector (2019 to 2020)

• Central government - 32
• Universities and colleges - 28
• Local government - 27
• Health - 15
• Registered social landlards - 13

The other main source consulted in this report is Scottish public bodies’ procurement spend data, which is made available through the Scottish Procurement Information Hub (‘the Hub’). Each year, the Scottish Government requests raw accounts payable data from public bodies across Scotland. This data is then uploaded to the Hub, where it is made available for analysis. The data is also enhanced using publicly available data in order to classify suppliers by size, location, area of business, charity status and other characteristics. During the reporting period, 105 Scottish public bodies had their data published on the Hub – an increase on the 102 organisations that submitted their data to the Hub in the previous reporting year.^[3]

The report also draws on information obtained from elsewhere – for example, through the Public Contracts Scotland (PCS) website and from the Supplier Development Programme.

As mentioned in the previous annual report (which focused on the 2018 to 2019 reporting year), it is important not to make any direct comparisons between data from different sources – in particular, the data from the annual procurement reports on one hand and the spend data from the Hub on the other hand – due to the differences in scope and data collection methods that apply to each source.^[4] As such, the sources have not been used to draw any direct comparisons but, rather, they have been combined to provide a strong overview of public sector procurement activity in Scotland.