(Title Image: National Assembly of Wales)
Environment & Rural Affairs Committee
Public procurement of food (pdf)
Published: 4th June 2018
Chair’s Statement, Mike Hedges AM (Lab, Swansea East):
“We are concerned at the perception of public food procurement among suppliers in Wales. That some companies see the sector as unreliable, and that contracts are often not worth the estimated value placed on them by the National Procurement Service, means that more must be done to restore faith and ensure tenders are attractive enough for businesses to bid for them.”
1. A new food strategy needs to emphasise the benefits of local procurement
The Welsh Government set a goal to increase the turnover of the food and farming sector to £7billion a year by 2020 and increase Gross Value Added (GVA) to £1.4billion over the same period. Wales is very close to meeting these targets, with turnover hitting £6.9billion in 2016.
Witnesses felt there was too much focus on what happens after food leaves the farm gate than creating a self-sustaining food system that would have wider environmental, public health and social benefits. Brexit may well present opportunities for this if Wales becomes less reliant on imports.
Calculating the cost of food was an issue. The WLGA called for a “more sophisticated” method of determining the cost and value of food that extends beyond price – for example, the number of local people employed, the nutritional value and “food miles”/the environmental impact.
2. Food businesses should see public procurement as an opportunity
The Welsh public sector spends £74.4million a year on food procurement, with around 63% (£47.2million) is spend with Welsh suppliers. The Committee concluded that this spending should be thought of as a potential investment in the health and wellbeing of the country.
Witnesses told the committee that many food businesses didn’t “see public procurement as an accolade”; Caerphilly Council said there was a lack of trust between suppliers and public bodies mainly due to the fact that while public bodies have extensive procurement frameworks, some companies may never get any work through them.
3. There are concerns about how the National Procurement Service (NPS) works
Several witnesses said the Welsh Government had taken less of a leadership role in recent years, with the NHS Shared Service Partnership and Caerphilly Council both suggesting the quality of procurement advice and services had noticeably declined.
The NPS was established to ensure common and repetitive commodities were only procured once, with all major public bodies (Welsh Government [and its sponsored bodies], councils, NHS, schools, police, fire service) in Wales signed up to it.
A Wales Audit Office investigation found that the public sector spent £234million through the NPS in 2016-17, but the NPS had only saved £14.8million – much less than expected.
There are three food and drink categories dealt with through the NPS framework – sandwiches and sandwich fillings, frozen meals and soups, fresh & packaged food and drink. The total spend is estimated at around £9.7million, but the Welsh Government estimated its worth as up to £135-136million. There are also no accurate or up to date figures for public sector procurement of Welsh food & drink.
The Welsh Government have committed to update the NPS framework – which is due to expire in 2018-2019 anyway.