Agenda item

To give the Scrutiny Committee the opportunity to consider the Procurement Strategy’s content and provide comments.

DECISION

1.     Accept the report and note the observations.

2.     Ask the Cabinet Member for Corporate and Legal Services and the Welsh Language to ensure that everything possible, within the limitations, is done to keep the benefit local, to promote small companies, create social value and support the Welsh language.

The report was presented by the Cabinet Member for Corporate and Legal Services and the Welsh Language. It was explained that new legislation in the field of procurement came into force in February this year. It was noted that the report outlined the Council's response to the Act, together with the strategy itself and the consequences of using the social value methodology in the evaluation of contracts.

It was stressed that public sector procurement was subject to a legal framework to ensure fair and open competition, value for money, and to comply with national and international obligations. It was noted that the Social Partnership and Public Procurement Act 2023 was likely to come into force next year, and that preparatory work was underway to respond to these changes.

It was explained that the Council spent around £200 million a year on procurement and therefore needed to deliver the best value in terms of price, quality and social benefits, including a contribution to decarbonisation. It was noted that the strategy sets out the direction for achieving these objectives and includes seven priority areas: local benefits, zero carbon, value for money, social value, technology, governance arrangements and the Welsh language.

It was reminded that the social value evaluation methodology reflected the seven aims of the Well-being of Future Generations and the Welsh Language Act, and that the Council would pilot a new system to ensure positive outcomes for Gwynedd, such as creating employment opportunities for local residents, spending in the local supply chain, and financial contributions to charities and community clubs. It was noted that companies had already offered social benefits of over £4 million since the introduction of the new approach.

It was explained that the next steps were outlined in the report, with a view to submitting the strategy to Cabinet in November. It was emphasised that the Council was a pioneer in the field of social value and that this strategy would underpin procurement over the coming years.

During the discussion, the following observations were made: 

A question was asked about the main challenges facing the Council in implementing the Strategy, particularly in terms of achieving the net zero target and keeping the benefits local. In response, it was noted that there were challenges across several sectors, including the environment, Welsh language and the social elements, and that the change in legislation and the need to understand the new arrangements were currently posing the main challenges.

The additional cost of implementing decarbonisation policies, such as the purchase of electric vehicles instead of diesel vehicles, was questioned and what financial impact this had on the Council. In response, it was noted that the main challenge was to calculate the environmental impact when comparing an old contract with a new one, and that this work was continuing at a national level. It was noted that there was currently no sophisticated method to measure carbon in detail, but that the hope remained that energy consumption would decrease over time and that this would lead to a reduction in costs. It was agreed to undertake further research to analyse the additional financial cost of implementing the net zero target.

A member expressed an opinion that the costs of future decarbonisation were likely to be higher than the cost of reaching the net zero goal. The amount of collaboration work that had been undertaken with the Economy and Community Department, and how much support was being given to small companies within the Strategy, was questioned. In response, it was noted that the Economy and Community Department provided support through grants and helped businesses in general. It was also noted that the Procurement Service offered support and provided advance information to businesses about tendering opportunities, with the ability to refer companies to Business Wales who offer independent support. It was emphasised that the Council sought to avoid using national frameworks where possible, to ensure more opportunities for local companies to compete.

The current monitoring arrangements and the steps to develop them further were questioned. In response, it was noted that contract management currently took place primarily within the individual services, and that the intention was to strengthen those arrangements by introducing best practice and ensuring full value for contracts. It was noted that there was a need to improve the monitoring of social value, the collection of carbon information and public reporting on the outcomes of tenders and the performance of large contracts.

It was enquired what was new in this Strategy compared to the previous one. It was asked if the fact that we measured social value was different from other authorities and went beyond the requirements of legislation. In response, it was noted that the element of measuring social value, the emphasis on keeping the benefit local, the impact of net zero procurement, value for money, making the best use of technology, looking at the governance arrangements, and promoting the Welsh language were additional aspects that had not been included in previous strategies. It was elaborated that several of these elements had been a priority in the past but had not been documented within a strategy. It was noted that the emphasis on social value in Gwynedd was higher than in many other authorities. It was emphasised that this strategy reflected the requirements of the Social Partnership and Public Procurement Act and laid the foundations for annual reporting on progress.

It was questioned whether technology and artificial intelligence had led to savings for the Council so far. In response, it was noted that the use of artificial intelligence technology was already taking place, but details of the financial savings were not currently available. It was noted that this area was developing as part of the Digital Plan, with robust governance arrangements being put in place.

The desire to see the Welsh language treated as a practical and meaningful factor in contracting, rather than just a symbolic promotional element, was emphasised. In response, it was noted that legal advice had been obtained on this matter and shared with the Member, noting the need to act within current law. It was noted that further work was underway to explore new opportunities to strengthen the use of the Welsh language through the detailed action plan.

The timetable for formulating and implementing the action plan was questioned. In response, it was noted that work was already underway in the background, but that the timetable would depend on the capacity and resources of the service. It was noted that this was a long-term strategy, with the actions to be prioritised over several years.

It was questioned what would be updated within the Procurement Policy and when this would happen. In response, it was noted that the Policy would be updated to reflect the requirements of the legislation. It was confirmed that a draft version of the Policy had already been prepared, and that it needed an internal consultation before it could be adopted.

RESOLVED

1.    To accept the report and note the observations.

2.    To ask the Cabinet Member for Corporate and Legal Services and the Welsh Language to ensure that everything possible, within the limitations, is done to keep the benefit local, to promote small companies, create social value and support the Welsh language.