The Welsh National Procurement Service (NPS) will “cease to exist in its current form”, a review has concluded.
The review, announced a year ago by cabinet secretary for finance Mark Drakeford and covering NPS and Value Wales, said the Welsh Government would “work closely with stakeholders to develop a new procurement strategy”.
In a statement Drakeford said: “It is clear that delivering a high volume of national frameworks is no longer a priority for customers and this is reflected in the level of engagement with NPS frameworks, which falls short of the business case forecast.”
The NPS, whose role is to set up procurement frameworks for the wider public sector across Wales, will transition “over time” into a smaller operation “to manage a reduced portfolio of national contracts, where such agreements can demonstrate delivery of value across a significant majority of Welsh public sector organisations”.
Drakeford said: “The NPS team will be consulted and engaged in developing the way forward and those not part of the smaller national contracting function will be offered opportunities to be involved in delivery of regional and local priorities; the national policy development and delivery support unit or the Welsh Government’s commercial and procurement programme, or other similar activities.”
Drakeford said priorities to come out of the review included more focus on collaborative procurement agreements, with “maximum access to Welsh suppliers”, a smaller number of national contracts in areas such as vehicles and fleet hire, strengthening the relationship with the Crown Commercial Service, and a “progressive future digital procurement strategy”.
Stakeholders want the new national policy approach to support social care and construction, said Drakeford, while a new “capability and capacity programme” will be drawn up to “equip procurement officers with modern commercial techniques and create a future talent pipeline to help tackle skill shortages and gaps created by different pay and rewards structures”.
“Our aim is to maximise procurement spend in Wales while also using the £6bn annual procurement spend to support sustainable jobs and growth; fair work and employment practices; infrastructure and construction investment; use of public assets and improve the resilience of local businesses and their communities,” said Drakeford.
“The feedback from the review has been clear that we must also work to provide a clear link between procurement and the wellbeing goals of public bodies across Wales and ensure the supply base can better engage in public procurement.”
The National Assembly’s Public Accounts Committee is conducting a separate inquiry into procurement.
A report into NPS by the Wales Audit Office in 2017 found public bodies spent £234m through NPS frameworks and contracts in 2016-17 but “public bodies are not using NPS frameworks as much as anticipated, resulting in concerns over its funding, less than anticipated savings – £14.4m reported for 2016-17 – and many of its members dissatisfied”.