The Scottish Government has confirmed that the economic activity generated through public spending reached more than £13 billion across 2021-22.
According to the fifth annual report into procurement activity, £16 billion was spent by the nation’s public sector, with £8.9 billion of this being spent in Scotland. This also contributed £7.5 billion to Scotland’s GDP over the same period.
The report also found that £4.2 billion was spent with small or medium sized enterprises, equating to around 55p of every £1 being spent with suppliers in Scotland, and is an increase on the 51p from the previous year. In addition to this, the report identified that 48.9% of public procurement spending in Scotland was done with suppliers within the nation’s 60% most deprived areas.
Sitting at £4.3 billion, this figure is an increase on the £3.9 billion that was spent in deprived areas over the course of 2020-21.
Tom Arthur, Scottish Public Finance Minister, commented:
“As Scotland grappled with the impact of the pandemic as well as the cost of living crisis, it is encouraging that these figures show how public sector purchasing power helped contribute billions to the Scottish economy and supported thousands of jobs.
“We are absolutely committed to continuing work to improve our public services and this report demonstrates how public sector procurement can act as a driver to generate a range of positive economic, social, and environmental benefits.
“The commitment from public bodies to deliver responsible procurement which benefits businesses, employees and communities in Scotland is clear. I welcome this report and the important role procurement plays to make Scotland a better place to live, work and do business.”
Social value also plays a crucial role in public sector procurement, thanks to the Procurement Reform (Scotland) Act 2014. With public sector organisations required to consider opportunities to bring environmental, economic, and social benefits through their spending, the report was able to find that suppliers within the local area of the purchasing organisation benefitted from £3.8 billion of spend. Alongside this, 71% of reporting bodies gave evidence of the ways that they were making environmental and climate change progress through their procurement.
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