Using public procurement to deliver sustainable and inclusive economic growth

Key points:

Using the power of public procurement to deliver sustainable and inclusive economic growth, with outcomes that are good for business and employees; good for society; good for places and communities; and open and connected.

  • Streamlining purchase to pay processes
  • Supporting small businesses and local supply chains
  • Mainstreaming sustainable procurement

1. Faster Payments

Having reviewed our own processes, work is well underway to streamline our purchase to pay processes and increase the level of digital transactions, including the deployment of digital invoicing techniques.

We continue to focus on paying our bills quickly. Last year, the Scottish Government paid 99% of valid invoices within 10 days. We will continue to focus on this and deploy resources released from the deployment of digital invoicing techniques to improve the percentage of valid invoices.

We are continuing to deploy a national eInvoicing solution across the public sector, removing manual intervention in the invoice management process, increasing first time match rates and increasing payment performance. We are advising public sector bodies on how to design efficient and effective P2P processes and, in procurement annual reports, are encouraging them to publish pay performance.

To improve cash flow for sub-contractors who are critical in the delivery of infrastructure, we have delivered on the 2018 Economic Action Plan pledge by increasing the number of applicable projects to which project bank accounts apply. From 19 March 2019, Scottish Government building contracts over £2 million and infrastructure projects over £5 million must contain a project bank account. We are urging others to follow our lead and are working with partners outside Scottish Government to include project bank accounts.

2. Supporting small businesses and local supply chains

Three out of four suppliers awarded contracts in Scotland in 2017-18 were SMEs with 60 pence of every pound spent with a Scottish supplier going to an SME. From April 2018 to March 2019, in addition to enabling SME spend across Scotland through our national contracts, the Scottish government’s direct spend with SMEs increased by 15%; many more Scottish businesses indirectly benefitting within public procurement supply-chains. Our work to extend these benefits to more small businesses and local supply chains continues:

  • We will ensure that the ‘Find Business Support’ website for businesses being developed by Scottish Enterprise, provides links to procurement sources of information and support such as Public Contracts Scotland, the Supplier Journey and Supplier Development Programme;
  • Having issued a Scottish Public Procurement Notice in May 2019 to promote the use of Public Contracts Scotland to facilitate access to sub-contract opportunities in major contracts for Scottish SMEs, we continue to promote the reporting of sub-contracted spend; and
  • We continue to fund and support the Supplier Development Programme, helping local supply chains to maximise contracting and sub-contracting opportunities.

With continued uncertainty on the potential impact of Brexit, we continue to focus on the continuity of critical supply chains, working closely with our suppliers, partners and stakeholder to mitigate risk.

3. Mainstreaming Sustainable Procurement

We continue to support public bodies in mainstreaming sustainable procurement decisions to maximise the benefits of our procurement spend for Scotland and its communities. This includes:

  • the pursuit of equality outcomes through procurement to support ‘inclusive’ economic wellbeing;
  • continuing to extend the range of Scottish Government and public sector contracts to which the Fair Work First criteria apply; and
  • using our networks and influence with the market, suppliers and wider public bodies to promote a collaborative and proportionate approach to tackling the global climate emergency.

While ‘community wealth building’ goes much wider than procurement, we will continue to play our part on local economic wellbeing by:

  • promoting the use of community benefit requirements in public contracts to deliver wider benefits for local communities and the wider society, including local supply chains, new jobs, apprenticeships, work placements and training;
  • supporting a range of public bodies to maximise the contribution their procurement spend makes in their area through the intelligent use of procurement data. This will include extending our work with the Ayrshire City Deal to the Glasgow and Tay City Deals, with the intension of sharing learning and advice with others across Scotland;
  • And, to support these endeavours, we will expand and target the Supplier Development Programme role and take forward opportunities to promote local economic development under construction frameworks.

Digital Commercial Service

Our Digital Commercial Service sits within the Digital Directorate, and as a joint initiative with the Scottish Procurement and Property Directorate, it builds on our CivTech model. It is supporting a number of public bodies to deliver public sector digital solutions through innovative procurement.

Geraldine Duffy, Owner of Weans World Childcare in Coatbridge, really enjoys her job, despite it being challenging at times. She loves helping young children reach milestones and teaching the wee ones, especially those without siblings, to share and be part of a team. Together with her husband, Chris, who works as her assistant, Geraldine’s childminding business goes from strength to strength, and Weans World received an excellent grading in its annual inspection from the Care Inspectorate.

As part of a phased 1,140 hours expansion implementation strategy, North Lanarkshire Council Education and Families Committee approved the procurement of an interim Framework for one year, for 2-5 year olds. Geraldine attended the Supplier Development Programme’s training workshop on how to bid for this opportunity on Public Contracts Scotland, alongside more than 60 public and private early learning providers in March 2019. She subsequently submitted a bid and found out she was successful in June 2019.

Geraldine said: “I was so nervous about bidding online that I brought my son so he could potentially help me, but going step-by-step alleviated my fears about online bidding. After the training I felt much more confident to bid online myself. I definitely recommend SDP training to help other childcare providers find the confidence to bid for early learning contract opportunities in other local authorities.”

Geraldine said: “If it wasn’t for SDP Scotland, God knows how my tender application would have turned out. A million thanks for the support SDP gave me to win a place on this Framework!”