A report to be released by the Centre for Economics and Business Research tomorrow will show that public sector expenditure in Wales, as a proportion of GDP, has grown from 56.3% in 2002 to 62.4% in 2006.
Highlighted in the Sunday Times, the study indicates that Wales spends two times as much on public spending as a proportion of its economy than new members of the EU such as the Czech Republic and Poland.
Some have argued that this is because there is a weaker private sector in Wales as compared to regions such as London. However, given that £4 billion is being spent on procuring goods and services by the Welsh public sector and only 30 per cent of this goes to local firms, then surely there needs to be serious examination of how this procurement can be legally adjusted to benefit Welsh business and to help them build capacity for future contracts. Only in this respect can increased public sector funding be used to increase the prosperity of this nation.
Only last week, I was speaking to a prominent Welsh businessman who had lost a major building contract to a firm from Liverpool. This was despite his firm's tender being over a million pounds cheaper than the rival bid, and the impression he had from the feedback was that he had lost because he had not used the right 'buzzwords' in their presentation!
Similarly, the contracts for two major building projects in North Wales - the Management Development Centre at Bangor University and the new Assembly Building at Llandudno Junction - have been awarded to businesses from Huddersfield and Manchester respectively despite being financed, to the tune of over £30 million of public sector funding from Wales.
How much of this funding will be spent employing local people and building up capacity within local firms? More importantly for a Welsh Assembly Government that prides itself on sustainability, how many white vans will we see driving down the A55 every day to carry out work on these projects? How many of those builders will be spending their wages in local shops and with local businesses?
More needs to be done to ensure that public sector expenditure in Wales can be used to support local businesses. If a 'local sustainability' clause can be inserted into contracts, then this would not only benefit local firms, but ensure that the environment also benefits from purchasing decisions.
Surely, it is about time that our civil servants applied their experience and expertise in examining how we can legally apply such a clause to public sector contracts in Wales, as happens in numerous states in the USA, and ensure that the assembly and other public bodies spend their money to help build up Welsh firms and, from this, the Welsh economy.
Highlighted in the Sunday Times, the study indicates that Wales spends two times as much on public spending as a proportion of its economy than new members of the EU such as the Czech Republic and Poland.
Some have argued that this is because there is a weaker private sector in Wales as compared to regions such as London. However, given that £4 billion is being spent on procuring goods and services by the Welsh public sector and only 30 per cent of this goes to local firms, then surely there needs to be serious examination of how this procurement can be legally adjusted to benefit Welsh business and to help them build capacity for future contracts. Only in this respect can increased public sector funding be used to increase the prosperity of this nation.
Only last week, I was speaking to a prominent Welsh businessman who had lost a major building contract to a firm from Liverpool. This was despite his firm's tender being over a million pounds cheaper than the rival bid, and the impression he had from the feedback was that he had lost because he had not used the right 'buzzwords' in their presentation!
Similarly, the contracts for two major building projects in North Wales - the Management Development Centre at Bangor University and the new Assembly Building at Llandudno Junction - have been awarded to businesses from Huddersfield and Manchester respectively despite being financed, to the tune of over £30 million of public sector funding from Wales.
How much of this funding will be spent employing local people and building up capacity within local firms? More importantly for a Welsh Assembly Government that prides itself on sustainability, how many white vans will we see driving down the A55 every day to carry out work on these projects? How many of those builders will be spending their wages in local shops and with local businesses?
More needs to be done to ensure that public sector expenditure in Wales can be used to support local businesses. If a 'local sustainability' clause can be inserted into contracts, then this would not only benefit local firms, but ensure that the environment also benefits from purchasing decisions.
Surely, it is about time that our civil servants applied their experience and expertise in examining how we can legally apply such a clause to public sector contracts in Wales, as happens in numerous states in the USA, and ensure that the assembly and other public bodies spend their money to help build up Welsh firms and, from this, the Welsh economy.
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