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Independence doubts curb National Procurement Service

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Forecasts savings were over-optimistic: Nick Ramsay

ALTHOUGH spend through the National Procurement Service (NPS) is increasing, it has not developed as quickly as expected resulting in concerns over its funding and less than anticipated savings

A report from the Wales Audit Office has also suggested that some public bodies think the NPS is too close to the Welsh Government.

Public bodies spent £234 million through the NPS in 2016-17, but this was well short of previous estimates, a report by the Auditor General for Wales has said.

Although spend through its procurement arrangements has increased year-on-year since its inception in 2013, public bodies are not using the NPS as much as anticipated. Of the £234 million spent through NPS in 2016-17, the 73 member organisations spent £222 million. NPS’s 2015 business plan had targeted a figure of £2.2 billion.

Until the end of 2015-16, a £5.9 million Welsh Government ‘Invest-to Save’ loan covered most of NPS’s operating costs. The Welsh Government expected that NPS would then start repaying the loan from surplus income generated by a supplier rebate. However, the rebate generated only £0.9 million in 2016-17 compared with operating costs of £2.8 million. Although there are signs of income increasing in 2017-18, NPS is still not expecting to cover its costs. The Welsh Government has used its reserves to meet the shortfall.

As at August 2017, NPS has reported savings for public bodies of £14.8 million for 2016-17 as well as wider benefits to the economy such as job creation and direct spend with Welsh suppliers. While the reported savings have increased year-on-year, the figures have been substantially lower than some early estimates.

The report also found that some public bodies have been concerned that the NPS is not sufficiently independent from the Welsh Government and that its focus is towards national issues rather than local priorities.

The report makes five recommendations on issues including:

  • identifying why public bodies are not using NPS as much as anticipated;
  • clarifying the process for members opting-out of using NPS procurement arrangements; and
  • agreeing a sustainable funding mechanism for the NPS.

Huw Vaughan Thomas said today “There is still broad in-principle support for the NPS, but it is vital that public bodies have confidence in it and it is clear that previous expectations about the growth of the NPS are a long way from being met. The NPS needs to do more to identify and address the reasons why public bodies choose not to use its procurement arrangements and to convince public bodies of the benefits.”

The Chair of the National Assembly’s Public Accounts Committee, Nick Ramsay AM, said: “The National Procurement Service (NPS) has an important role to play in getting a better deal for public bodies for their goods and services and in delivering the Welsh Government’s wider procurement policy objectives.

“The Auditor General’s report makes clear that the NPS is falling well short of what appears in hindsight to have been over-optimistic expectations about the amount of public spending that it would be able to influence, at least in its early years.

“The report raises some broader questions about public bodies’ commitment to collaborative purchasing and about the balance between national and local priorities, and the overall governance of the NPS.

“The Committee will be considering this report about the NPS alongside the Auditor General’s wider report on Public Procurement in Wales, published last month.”

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Politics

‘Sort finances before service changes’

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Proposals must be financially sound: Dinah Mulholland, Ceredigion CLP

ONE ​of​ ​w​est Wales’ Labour Constituency Parties has called for the Health Board not to proceed with its plans for major health service change until its long-standing financial crisis has been resolved.

On Friday, May 25, Ceredigion Constituency Labour Party passed a motion calling on the Board to think again.

In the last financial year the health board overspent its £760m budget by £70m, or ​9%​, and the board itself describes its regular overspends as ​’​growing year on year​’​.

Ceredigion Labour Party points out that although the changes in service provision which are being proposed may provide better patient care, they cannot also be expected to deliver savings if standards of care are intended to be maintained.

Dinah Mulholland, spokesperson for CCLP, said: ​”​We welcome all attempts to improve local health services. But acceptable proposals must be based on sound financial projections and dependable financial commitments.

“For instance, all three of the board’s alternative proposals for the delivery of clinical services involve the building of a new major urgent and planned care hospital `between Narberth and St Clears’, to replace other hospitals that would be closed or downgraded. Yet the Welsh Government has offered no commitment to provide capital funding for this scheme.

“We are calling for a `Stop and Fix’ approach because unless the financial arrangements are stabilised we see a very real threat that at some point during the next few years progress with major changes in service provision could be overtaken and overwhelmed by a sudden financial collapse.

“And if the board is preoccupied with delivering major changes in service provision it will be paying less attention to managing its ongoing financial problems.

“We would welcome a commitment from Hywel Dda not to proceed with any major reconfiguration of clinical services until it has secured resources to remedy the chronic and ingrained underfunding of health services in mid and west Wales. This proposed reconfiguration cannot and should not be expected to solve Hywel Dda’s long-standing problem with underfunding.”

Last week (May 23) the Welsh Health Secretary announced an annual increase of £27m in Hywel Dda’s revenue funding, but CCLP describes this as “sticking plaster” as it represents only 39% of the deficit in the last financial year.

The Health Secretary has said that this new funding puts Hywel Dda on a “fair funding basis”, but CCLP points out that if the board’s funding has only just become “fair” this raises additional questions about how much the local NHS budget has been “short-changed” in every year since the National Assembly began.

A review by the Welsh Government, as part of the Targeted Intervention support provided to Hywel Dda Health Board, found that two factors, demographics and scale, generated excess costs that were unavoidable to the Board.

The review, undertaken by Deloitte LLP, confirms the view held by many people in Ceredigion and mid and west Wales that Hywel Dda faces a unique set of healthcare challenges.

Hywel Dda is consulting the public on three alternative proposals for providing clinical care, closing and/or downgrading Withybush Hospital, Prince Philip hospital in Llanelli and Glangwili hospital in Carmarthen. In all three proposals community care would be strengthened so that more people can be treated and supported closer to home. In all versions Bronglais hospital in Aberystwyth would remain as a District General Hospital.

The 12-week public consultation began on 19 April and will end on 12 July. Ceredigion CLP is also critical of the board’s plans for obtaining the views of the public, which it points out do not include any meetings with platform speakers open to the general public. CCLP says this is unacceptable.

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Politics

WG to miss climate change targets

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Changing climate: NASA chart shows 'Global Temperature Anomalies'

THE WELSH G​OVERNMENT​ will miss its own targets for reducing greenhouse gas emissions, says a National Assembly committee.

The Climate Change, Environment and Rural Affairs Committee examines the issue in its first ever climate change annual report.

In its Climate Change Strategy published in 2010 the Welsh Government set out its target of reducing greenhouse gases in Wales by three per cent year-on-year, and at least a 40​% reduction by 2020.

The Committee was given three reasons for the failure – the European Union Emissions Trading Scheme, the economic make-up of Wales and weather patterns.

But the Committee concluded that these variables should have been taken into account when the policies were developed and targets set.

The Welsh Government is being advised on its new approach, framed by the Environment (Wales) Act 2016, by the UK Committee on Climate Change, which has recommended it set new, lower targets in the short term.

The Assembly committee believes this is regrettable but necessary given the lack of progress by the Welsh Government.

Members also learned that the level of engagement in the Welsh Government’s Cabinet on climate change was insufficient, with a lack of joint-working across different departments.

Even though the European Union Emissions Trading Scheme may be a reason for missing emissions targets, the Committee notes there is still no sign of a new scheme to take its place after the UK leaves the EU. The Committee concludes there needs to be a greater sense of urgency on addressing this matter.

“The Welsh Government’s targets on reducing greenhouse gas emissions in Wales were ambitious, but attainable,” said Mike Hedges AM, Chair of the Climate Change, Environment and Rural Affairs Committee.

“That the Government will miss these targets by some margin is deeply disappointing, and the Committee is not convinced by some of the reasoning behind the failure.

“We believe there needs to be a much more co-ordinated approach across government departments if Wales is to truly become a greener, more sustainable nation.

“In the short term we accept the view of the Committee on Climate Change that the Welsh Government revise down its targets.

“We have made a number of recommendations in our report around agriculture, forestry, housing and transport which we believe will ensure ministers will deliver on their climate change commitments and obligations.”

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Politics

Minister announces affordable housing review

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Rebecca Evans: WG committed to deliver 20,000 affordable homes

HOUSING and Regeneration Minister Rebecca Evans has announced an independent review of affordable housing supply in Wales, with a visit to newly built affordable houses and flats in Pontardawe.

The review will examine whether more can be done to increase the supply of affordable housing in Wales, maximising the resources available, and will be chaired by Lynn Pamment, Cardiff Senior Partner and Government & Public Services Lead at PwC. Lynn has many years’ experience of providing financial advice to public and private sector bodies, including working with housing associations and others in the affordable housing sector.

The review will:

  • examine the scope for increasing match funding to build more affordable homes, to maximise the number of homes created by the Welsh Government’s contribution to social housing
  • review the arrangements governing partnership working between local authorities and housing associations
  • consider the implications of moving to deliver zero carbon homes by 2020, including the role of off-site manufacture and modern methods of construction
  • review the standards governing affordable housing and advise on whether they require updating
  • make recommendations regarding a sustainable rent policy that will both allow long term affordability for tenants and allow viability of existing and new housing developments.

The review will be expected to issue a report and make recommendations to the Minister by the end of April 2019.

Rebecca Evans said: “We have made a clear commitment to deliver 20,000 affordable homes during this term of Government and this development in Pontardawe demonstrates how we are delivering on this.

“I want this review to ensure we are getting the best value for money in our investments and policy, including how we plan for a zero carbon future and the way in which the sector operates.

“We know that many more people in Wales want to access affordable housing.

“The sector in Wales have called on us to look at our policy, and we want to work closely with all stakeholders involved in housing supply to ensure we are building as many homes as possible.

“Lynn Pamment has a great deal of experience in working with the public and private sector on financing projects, and I look forward to reading the results of her review next year.”

Stuart Ropke, Chief Executive of Community Housing Cymru said: “Housing associations in Wales have ambitions to build a minimum of 75,000 affordable homes in Wales over the next twenty years – doubling the current delivery rate. In November 2017 we launched ‘Housing Horizons’, our sector vision to make good housing a basic right for all. This far reaching ambition cannot be achieved without a full analysis of Welsh housing policy and how this is put into practice, so we are delighted the Minister has backed our call for a review.

“Through the review we can establish the most effective policy environment to meet our affordable home delivery ambition and build a solid foundation for current and future generations. If we get this review right, it will be a big step towards solving the housing crisis.”

Matt Dicks, Director of the Chartered Institute of Housing Cymru said: “We welcome today’s announcement of a review into housing policy in Wales. It rightly looks at what kind of homes we need in the future and how we can sustain longer-term investment whilst maintaining the affordability of our housing. Over the lifespan of the one-year review we look forward to engaging fully, bringing to life the experiences of housing professionals from across the sector in Wales to provide timely insight and real-life expertise.”

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