With the help of Welsh Government’s Foundational Economy Challenge Fund, Vale of Glamorgan Council is changing how they procure to benefit the foundational economy.
Procurement is where an organisation acquires goods, services or works from an external source. Often it uses competitive bidding. Very simply it is the shopping an organisation does to deliver its aims and objectives.
The Council is the biggest spender in the Vale, spending £186 million per annum. Council staff believe they have a responsibility with that spend to ensure they deliver the best value to the area including skills, health, well-being, environmental benefits and employment.
When the Welsh Government’s Foundational Economy Challenge Fund was launched, the Council saw an opportunity to strengthen their procurement practices to help meet these aims, including better support for SMEs (small and medium size enterprises) which are recognised as the ‘lifeblood of the area’.
Funding was awarded for a project that aimed to grow local SMEs and to increase the number of these delivering Council contracts. Maddy Sims, who leads the Council’s foundational economy work, realised that this would also require changing unhelpful perceptions that the Council’s procurement was a closed rather than open process.
Recognising that dialogue was crucial, the project focused on listening to local businesses, the use of data and trying to ‘humanise’ the process of bidding for Council contracts so that more SMEs could benefit.
SMEs often don’t have guaranteed income at the end of the month. Because of this, Maddy explains, it’s important to remove barriers to the bidding process as businesses cannot afford to be constantly bidding for contracts that do not materialise.
Through the Council’s conversations with local SMEs they found that many faced frustrating – though easily rectifiable – issues that prevented them from winning Council contracts. Many had not heard of Sell2Wales (an initiative from the Welsh Government helping SMEs work successfully with the public sector) whilst others had various small but disheartening problems – such as not having codes set up correctly.
Central to resolving these issues has been a proactive approach to building relationships with local business and asking ‘what can we do to help you work with us?’ rather than just assuming that SMEs would approach the Council for information or advice.
The Fund has allowed the Council to engage with more than 1,000 businesses since June 2020 through events with Business Wales, Sell2Wales and others to help understand and resolve tendering problems.
The Council’s new conversational approach also works to take away the ‘waste of time factor’ and the overwhelming feeling many SMEs currently face when tendering. Maddy explains that these factors not only lead to some SMEs not bidding, but also rushing bids, making them less likely to succeed.
To help encourage and reassure local SMEs therefore, the Council are making case study films featuring some of the local businesses they’ve worked with, including a story of one who, after gaining confidence in tendering through providing vending machines to the Council, went on to win a multi-million pound contract with the NHS.
An animation to make procurement look simpler and more exciting has also been commissioned and the Council has also increased the number of mailshots sent to businesses to grow awareness of the contracts available.
As a result of these efforts, 100 new local businesses have registered with Sell2Wales and the Council has taken other steps to make its contracts more accessible to SMEs – such as breaking up a large-scale contract into smaller ones that SMEs are more able to tender for.
Conversations with local businesses not only identified barriers to tendering and winning contracts but also allowed the Council to better understand the local supply chain and gaps in the market. This understanding is vital for the Council to support the local area with its procurement, for example potentially through a supply chain policy or proactive procurement to help stimulate activity in a supply chain void.
The project has also helped catalyse other new ways of working. The Council’s procurement is not centralised, and the procurement is devolved to different directorates. Currently, there is no centralised reporting about how much is spent locally which makes it difficult to measure the full impact of Council procurement on SMEs or the local foundational economy in general. The challenge here is the lack of data. The Challenge Fund project has highlighted this gap, which the Council recognises as a positive first step in overcoming and rectifying it.
An important learning point Maddy would like to convey to others doing similar work is simply to “put yourself in their (SMEs) shoes and consider what they’re going through”. She explains “it’s a lot of listening, talking and then finding out if you can change your processes to bring mutual benefit. Anybody looking to do this kind of project, talk to as many people as possible.”
Procurement is the main part of the Council’s spend and Maddy feels that the Challenge Fund project has really opened up the potential power of that spend to benefit the foundational economy. It has given the Council new insights into where they will go next, reshaping their procurement service, standardising it and measuring the locality of their spend in a more precise way.
Ultimately, the Council wants to support SMEs to deliver skills, jobs – and often many other benefits linked to a strong foundational economy. It also wants to give commissioners more confidence and awareness to spend with locality and value in mind.
This case study was compiled by Cynnal Cymru – Sustain Wales as part of supporting a community of practice of Challenge Fund projects sharing learning and collaboration.
