PROCUREMENT FOR SMALL FIRMS IN WALES - ANOTHER VIEW

DAILY POST 19TH JUNE 2013

One of the country's most influential figures in the business world has hit out  at the complexity of the competitive tendering system used in Wales.

Trefor Jones CBE CVO, former Lord Lieutenant of Clwyd and North Wales’ sole respresentative on the Silk Commission which is looking into issues surrounding Welsh devolution, said Wales was the only country in Europe which does not operate a system supporting bids from local companies.

And Professor Dylan Jones-Evans, Director of Enterprise and Innovation at the University of Wales who is currently leading a major review of business finance for the Welsh Government, has suggested the government should look at ways to ensure better credit facilities are available to small businesses competing for its own contracts.

Their comments came during a packed meeting of Wrexham Business Professionals (WBP) at the Ramada Plaza hotel in Wrexham at which they were both guest speakers.

WBP is a group of professional firms of solicitors and accountants  who collaborate on a non-competitive basis to promote the development of businesses, skills and employment opportunities for professional people.

The issue of competitive tendering was raised by Mario Kreft MBE, proprietor of the Wrexham-based Pendine care organisation.

He said: “When it comes to tendering, we must make sure we are getting the best value for the Welsh pound.

“The Germans, for instance, have a system of built-in value for good local German businesses but we don’t have that in Wales.”

Trefor Jones, who spent a lifetime in industry and was chief executive and chairman of the board of Pilkington Optronics in St Asaph, agreed with Mr Kreft.

Mr Jones,  a former deputy chairman of the Welsh Development Agency and ex-chairman of the North Wales CBI, pointed out he had often been involved in the tendering process in his own business life.

He added: “It is the only country in Europe to do it like this. France and Germany have systems of supporting their local companies. These take into account local need as well as social and economic considerations.

“In Wales, Ministers are told that this cannot be done, but Ministers have got to say to civil servants ‘tell me how I can do it, not how I can’t do it.’ There are signs that the problem has been recognised but the pace of change needs to be more dramatic.

Professor Jones Evans, who has held senior posts in various universities and business schools since 1996, is a member of the Business Advisory Panel for the Secretary of State for Wales.

He said in his response to Mr Kreft that the Welsh Government was responsible for annual spending of £4 billion and that one of the recommendations of the business finance review he is heading is that it should look at some way of ensuring better credit to its smaller suppliers.

He explained: “Large companies often do not pay their suppliers for 92 days and that can have a devastating effect on a small local company.

“The Welsh Government must say to its larger suppliers, ‘we will pay you in 30 days but you must also pay your suppliers in 30 days.

“Imagine the beneficial impact that would have on smaller companies if this was to be put in government contracts. That is one of the recommendations we are saying.”

During his presentation to Wrexham Business Professionals, Trefor Jones explained that the independent Silk Commission on which he serves had been asked by the UK Government to examine a wide range of issues connected to Welsh devolution.

It had now finished the first part of its remit, examining the financial powers of the Welsh Assembly, and was now reviewing the wider general powers of the Assembly.

Both phases, he said, had involved taking evidence from a wide range of those involved in devolution, including making visits to the devolved governments in Scotland and Northern Ireland.

“One message wherever we go in Wales,” he said, “is that a top priority for the country is economic growth. Without that we cannot afford things like the health service and the education system we desire.

“I don’t see that any change in Wales’ future constitution should affect this desire for economic growth – in fact, this should improve it.”

Introduced by Gill Atkinson on behalf of Wrexham Business Professionals as “probably the first celebrity business professional in Wales,” Professor Dylan Jones-Evans used his presentation to outline the various areas he had been looking at as part of the review he is leading at the request of Wales’ Business Minister Edwina Hart.

One thing which had shocked him, he said, was an estimate that around 10 per cent of Welsh businesses were unable to get access to outside finance, with smaller businesses – those with turnovers of less than £1 million – being worst affected.

“If your company is small, young and in certain sectors you cannot get funding,” he revealed, adding: “We therefore need to look at more effective means of helping smaller companies with this.”

Professor Jones-Evans said that with “tens of millions of pounds” being spent on business support in Wales each year, banks and the Welsh Government needed to talk to each other more about the most effective ways of using this to benefit smaller firms.  

He also said he would like to see the Welsh Government backed Finance Wales working more closely with the banks to assist businesses in need of funding assistance.

He added: “We need to create a system that responds to the real needs of business so that small and medium businesses can flourish and the Welsh economy can flourish.”