Chamber
Meeting of the Parliament 17 April 2013
17 Apr 2013 · S4 · Meeting of the Parliament
Item of business
Public Procurement Reform
As Gordon MacDonald has just said, Scottish public bodies spend more than £9 billion of taxpayers’ money every year, so it stands to reason that the decisions that they make when they spend that money are of enormous consequence to businesses, the public and the economy generally.
I am very pleased that the Infrastructure and Capital Investment Committee has called this debate, and I very much look forward to hearing contributions from members across the chamber today. I am going to talk about progress, but I do not want to leave anybody in any doubt that there is still room for significant improvement in the way that the public sector buys goods, works and services, and I hope that we hear lots of suggestions this afternoon about how we can continue to make those improvements.
The approach to procurement that we have taken in recent years has allowed us to deliver £1.2 billion of savings, more than 3,500 training and employment opportunities through community benefit clauses, a national framework for supported businesses and a situation in which 46 per cent—compared with a United Kingdom Government target of 25 per cent—of our £9 billion procurement spending is with SMEs, nearly half of which goes directly to small firms that employ fewer than 50 people.
We have an e-commerce shared service platform that supports more than 100 public bodies and processes more than £5 billion of transactions every year. As I announced yesterday at the new crime campus at Gartcosh, we now have a situation in which 80 per cent of suppliers that are awarded contracts through the public contracts Scotland portal are based in Scotland and 68 per cent are Scottish-based SMEs, which is an increase of 12 per cent since 2010. The fact is that more Scottish-based businesses than ever before are winning business with the Scottish public sector through the PCS portal, and I think that we should celebrate that.
However, there is much work still to do—the variety of frustrations about procurement processes that I frequently hear from the business community, in particular the small business community, leaves me in no doubt about that. Our package of public procurement reform initiatives is designed to address in a systematic and on-going way, as far as it is reasonably possible, as many of those frustrations as we can.
Before I talk more about particular aspects of the reform programme, it is necessary to mention the EU context. As I am sure that everybody in the chamber knows, public procurement is governed by a very detailed and comprehensive suite of European laws. Those laws are the product of a policy that, at a pan-European level, is intended to promote economic growth by opening markets. We might not agree with every aspect of European law—in fact we do not agree with every aspect of it. My view is that we should always strive to operate with maximum flexibility in those rules, but we are nevertheless bound by them.
We must also remember a point that has already been made in the debate: Scottish businesses benefit from those rules when they win contracts internationally, as they frequently do. However, it is important to seek to influence European law on procurement.
I have been very pleased to see cross-party collaboration among our members of the European Parliament in trying to shape the review of European procurement law that is under way. Last year they tabled an amendment to the new draft European public procurement directive that, if it had been adopted, would have allowed purchasers to take account of economic impact in their purchasing decisions. Ministers have also supported that position directly with the European Commission. So far we have not been successful in securing that change, but that should not, will not and must not deter us from continuing to lobby vigorously at EU level for sensible reform.
I am very pleased that the Infrastructure and Capital Investment Committee has called this debate, and I very much look forward to hearing contributions from members across the chamber today. I am going to talk about progress, but I do not want to leave anybody in any doubt that there is still room for significant improvement in the way that the public sector buys goods, works and services, and I hope that we hear lots of suggestions this afternoon about how we can continue to make those improvements.
The approach to procurement that we have taken in recent years has allowed us to deliver £1.2 billion of savings, more than 3,500 training and employment opportunities through community benefit clauses, a national framework for supported businesses and a situation in which 46 per cent—compared with a United Kingdom Government target of 25 per cent—of our £9 billion procurement spending is with SMEs, nearly half of which goes directly to small firms that employ fewer than 50 people.
We have an e-commerce shared service platform that supports more than 100 public bodies and processes more than £5 billion of transactions every year. As I announced yesterday at the new crime campus at Gartcosh, we now have a situation in which 80 per cent of suppliers that are awarded contracts through the public contracts Scotland portal are based in Scotland and 68 per cent are Scottish-based SMEs, which is an increase of 12 per cent since 2010. The fact is that more Scottish-based businesses than ever before are winning business with the Scottish public sector through the PCS portal, and I think that we should celebrate that.
However, there is much work still to do—the variety of frustrations about procurement processes that I frequently hear from the business community, in particular the small business community, leaves me in no doubt about that. Our package of public procurement reform initiatives is designed to address in a systematic and on-going way, as far as it is reasonably possible, as many of those frustrations as we can.
Before I talk more about particular aspects of the reform programme, it is necessary to mention the EU context. As I am sure that everybody in the chamber knows, public procurement is governed by a very detailed and comprehensive suite of European laws. Those laws are the product of a policy that, at a pan-European level, is intended to promote economic growth by opening markets. We might not agree with every aspect of European law—in fact we do not agree with every aspect of it. My view is that we should always strive to operate with maximum flexibility in those rules, but we are nevertheless bound by them.
We must also remember a point that has already been made in the debate: Scottish businesses benefit from those rules when they win contracts internationally, as they frequently do. However, it is important to seek to influence European law on procurement.
I have been very pleased to see cross-party collaboration among our members of the European Parliament in trying to shape the review of European procurement law that is under way. Last year they tabled an amendment to the new draft European public procurement directive that, if it had been adopted, would have allowed purchasers to take account of economic impact in their purchasing decisions. Ministers have also supported that position directly with the European Commission. So far we have not been successful in securing that change, but that should not, will not and must not deter us from continuing to lobby vigorously at EU level for sensible reform.
In the same item of business
The Deputy Presiding Officer (John Scott)
Con
The next item of business is a debate on motion S4M-06153, in the name of Maureen Watt, on behalf of the Infrastructure and Capital Investment Committee, on ...
Gordon MacDonald (Edinburgh Pentlands) (SNP)
SNP
It is a pleasure to open this debate on public procurement on behalf of the Infrastructure and Capital Investment Committee. As members know, the Scottish Go...
John Mason (Glasgow Shettleston) (SNP)
SNP
We sometimes hear criticism of the EU, for a variety of reasons. Will the member confirm what I think that he just said, which is that the EU gives Scottish ...
Gordon MacDonald
SNP
I agree on that point. The EU-wide framework opens up opportunities for Scottish companies, because the scale of procurement by the public sector across the ...
The Deputy Presiding Officer
Con
We are extraordinarily tight for time today. I call on Nicola Sturgeon, who has up to 10 minutes.14:50
The Deputy First Minister and Cabinet Secretary for Infrastructure, Investment and Cities (Nicola Sturgeon)
SNP
As Gordon MacDonald has just said, Scottish public bodies spend more than £9 billion of taxpayers’ money every year, so it stands to reason that the decision...
Patrick Harvie (Glasgow) (Green)
Green
On a question of timing, does the minister intend to wait until the EU process of reform is further down the line before introducing a bill here, or does she...
Nicola Sturgeon
SNP
We hope to introduce the procurement reform bill before the summer recess. We require to give ourselves comfort that what we propose in that bill will be wit...
Elaine Murray (Dumfriesshire) (Lab)
Lab
I suspect that procurement as a topic for debate may not have set many members’ pulses racing, but I am encouraged to hear that the debate is tightly subscri...
John Mason
SNP
Will Elaine Murray give way on that point?
Elaine Murray
Lab
Sorry, I have only 10 seconds.We should not subsidise low pay in other sectors. I know that my colleague Kezia Dugdale is considering taking forward John Par...
The Deputy Presiding Officer
Con
You must close, please.
Elaine Murray
Lab
Workers’ rights must be respected. The cabinet secretary also made some good points about the use of community benefit clauses.I look forward to the introduc...
Mary Scanlon (Highlands and Islands) (Con)
Con
The Conservatives, too, welcome today’s debate, which provides an opportunity to bring forward some ideas.The motion in the name of Maureen Watt states that ...
John Mason
SNP
Does Mary Scanlon accept that one reason why we have limited resources is that we have tied up funds in private finance initiative projects, which have ended...
Mary Scanlon
Con
I am not sure that that was a positive contribution, which I am hoping to make.More recently, we received the report “Improving community planning in Scotlan...
The Deputy Presiding Officer
Con
That is much appreciated. We move to the open debate.15:13
Chic Brodie (South Scotland) (SNP)
SNP
I am delighted to speak in the debate, and my speech is built on the foundations that were laid by the Christie commission report to which Mary Scanlon has j...
Kevin Stewart (Aberdeen Central) (SNP)
SNP
I agree that there should be encouragement, but currently, the European Union legislation and a test case—Dirk Rüffert v Land Niedersachsen—show that we cann...
Chic Brodie
SNP
Of course, I agree with the latter point. I will come to the former in a minute.On the living wage and public sector contracts, it is anathema to me that we ...
The Deputy Presiding Officer
Con
The member’s keeping to time is much appreciated.15:19
Margaret McCulloch (Central Scotland) (Lab)
Lab
I welcome the opportunity to debate the proposed procurement reform bill and the wider procurement agenda, which is—I am glad to say—at last being given the ...
Linda Fabiani (East Kilbride) (SNP)
SNP
I thank the Infrastructure and Capital Investment Committee for holding this debate. It is an excellent idea to ask—as the motion states—for“members’ views o...
The Deputy Presiding Officer (Elaine Smith)
Lab
Thank you. Before I call John Mason, I just want to say that the building work is not supposed to be taking place while Parliament is sitting, so we are havi...
John Mason (Glasgow Shettleston) (SNP)
SNP
Thank you for that reassurance, Presiding Officer.I welcome the fact that procurement is on the agenda. Although we all accept that there is definitely room ...
The Deputy Presiding Officer
Lab
We are very tight for time.15:37
Tavish Scott (Shetland Islands) (LD)
LD
I, too, declare an interest as an honorary fellow of RIAS. I very much agree with Linda Fabiani’s point that the Deputy First Minister’s bill should not be s...
Kevin Stewart (Aberdeen Central) (SNP)
SNP
I thank the Infrastructure and Capital Investment Committee for giving us this opportunity to debate this important issue today. For many, this issue is not ...
Anne McTaggart (Glasgow) (Lab)
Lab
In these tough economic circumstances, it is right that the Parliament takes time to scrutinise how Scotland uses its buying power to promote social and econ...
Nicola Sturgeon
SNP
In the interests of fairness, will the member acknowledge that it is not that we do not support legislation for a living wage but that EU legislation does no...