Set against the mighty giants of health care or education, public procurement looks small, insignificant. Compared to economic development it appears dull and boring.
In a competition like Britain’s Got Talent, it wouldn’t even make the live shows… or would it?
Perhaps t is actually more like Susan Boyle, completely uninspiring on the outside and yet, when procurement ‘does its thing’ it astounds everyone and the results are unforgettable.
And the impact that public procurement can have on the communities it serves is completely under-rated. There’s a real perception that it’s only there because of the legal requirements to ensure competition. So it works away, quietly, keeping all of its potential to itself.
The truth is that public procurement can be used to inject a turbo boost into the local economy. I should know because we’ve been developing this in the Outer Hebrides for years.
Public contracts are a viable part of business
In rural areas like my own, delivering goods, services or works to the public sector can form a significant part of a company’s business. And for some, especially smaller businesses, it’s their lifeline, more than ever in an economic climate like the current one.
For those businesses working with the public sector, this income stream is invaluable; whether they’re providing vegetables for school dinners, local bus services or even building a new school.
In fact, in 2013 Scotland 68% of the £9bn public contracts were awarded to companies based within our borders. Imagine the economy boosting power if we increased that by a mere 1%?
Spend local, think global
But to really impact our local economy, the next step is to make sure we retain as much of that spend locally.
By using well thought out procurement strategies that consider how contracts should be lotted; making sure contract opportunities are well known in our local area; and by working with organisations like the Scottish Business Gateway and the Supplier Development Programme, we can make great progress in ensuring local spend is increased.
In my local authority area just under £20m is ploughed back into the local businesses through public contracts. Not insignificant for the Outer Hebrides economy and again, imagine the impact if this was increased by just 1%?
Winning a public contract can provide the confidence boost a business needs to help support growth. A strong local base for a small construction company means that potential contracts in neighbouring areas become a possibility. We have examples here where companies have ventured forth and won contracts on the other side of the Minch.
Winning a place on a national public sector framework agreement can springboard an order book from a single figures to 100s in an instant and start that path to growth.
And the prompt payment of invoices by a public body makes cash flow easier to manage and gives businesses the confidence to expand into markets further afield.
Public contracts support supply chains and logistics for other sectors
Many public contracts, particularly in rural areas, can provide valuable revenue stream meaning goods and services can also be available to the private and third sectors.
The certainty of a three-year public contract for the provision of pre-prepared meals has strengthened the viability of a local bakery in one of our smaller islands safeguarding and creating jobs. Supply chains including logistics for commodities like food or waste collection which might otherwise have high unit costs become more sustainable when they are built upon the stability of public contract income.
It’s time for public procurement to take the stage
It’s no longer right for public procurement to hide its talents. It needs to step up and create great revenue streams, provide a launch pad for growth and strengthen and support supply chains.
It’s time for public procurement to come out from the shadows and into the limelight; demonstrate for all to see, the incredible benefits that it has for its local communities.
Who knows, in the end public procurement may even make it to the live shows!