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Review of Public Procurement in Scotland - Report and Recommendations


2 Public Sector Procurement Profile

One of the issues mentioned later in my report is that of the ongoing availability of accurate aggregated information on public procurement expenditure in Scotland, its analysis by organisation and type of goods and services procured and where geographically it's spent. The absence of this data is concerning. The following summary therefore is based on a combination of reported information and other assessments where complete financial data on procurement is not available.

Total Scottish Executive expenditure will be just under £30bn in the current fiscal year. This obviously excludes non-devolved Government department spending by entities such as the Ministry of Defence and other central UK departments and bodies. As indicated above there is no system of reporting of consolidated procurement spend. However, I estimate the value to be close to £8bn. Within this Local Authority spend with suppliers this year is in the region of £2.3bn. Overall Health Service procurement expenditure (including pharmaceutical purchases) will be approximately £2bn and universities and colleges will spend around £800m with suppliers. Organisations such as Scottish Water, the Scottish Executive Roads Department and Communities Scotland have significant external expenditure, the major proportion of it being of a capital nature which totals well in excess of £1bn for the sector as a whole.

The structure of the public sector, although logical in the context of the delivery of services and local infrastructure, is organisationally and financially fragmented. This granularity adds to the difficulty of aggregating spend to present an overall profile and of course taking advantage of that spend in the market place. For example, there are 32 local authorities, 22 health boards including special boards, 63 universities and colleges, 9 Scottish Executive Departments, 66 Non-Departmental Public Bodies, 8 Police Forces, 8 Fire Brigades and other bodies such as Agencies funded or owned by the public sector. On one hand the prospect of acting in a cohesive way offers a significant economic opportunity, on the other it's a huge challenge to act in a concerted manner in the area of procurement spending.