Audit, Inspection and Safety

17.10.17

‘Several notable procurement failures’ highlighted by auditor in Wales

A report on public procurement in Wales has found that there is “clear scope for improvement” on how authorities procure services at a national and local level.

Last year, Welsh public bodies spent around £6bn on procurement, and the review, written by the Wales Audit Office (WAO), specified a number of key areas where public sector organisations were not doing enough to ensure value for money in their procurement processes.

It points to the national Procurement Board as one area where efficiency could be improved, suggesting the organisation currently has “limited effectiveness.”

The WAO says there have been “several notable procurement failures” in recent years coupled with the rise of new challenges in the sector.

British councils have already called for more care in procurement strategies after Brexit. In August, the LGA said that a “lighter touch” was needed when the UK splits from the EU in the future.

In Wales, the largest spending category was in construction, which had an outlay of £1.7bn, and local authorities were found to be the biggest public spenders, paying out £3.3bn to procurement activities in 2015-16.

The report also set out a few recommendations, including the enforcement of regular reviews by public bodies of their own strategies and changes to the scope of nationwide checks which are expected to be rolled out by the government in future.

“Procurement is one of the key ways in which public bodies need to be able to demonstrate that they are securing value for money,” said auditor general, Huw Vaughn Thomas.

“Our findings are clear: while public bodies face a range of challenges in a changing procurement landscape, they can do more to strengthen their procurement arrangements and recent examples highlight the financial and reputational risks of getting procurement wrong.”

Roughly £880m of 2015-16 spend was managed by three main Wales-based consortia and public buying organisations. The WAO reports mixed views from public bodies on the effectiveness of these organisations.

The groups are the National Procurement Service, the Higher Education Purchasing Consortium and the NWSSP, which is owned and operated by NHS Wales.

The biggest of the trio is the NWSSP which saw the most spending go through it in 2015-16 at £634m with most contracts awarded directly on an all-Wales basis.

The WAO is now calling on public bodies to take this inefficiency into account during reviews and try to reduce wasted spending where possible.

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