Two months after the Senedd election, Wales’s new economic direction is starting to take shape, with ministers signalling a sharper focus on productivity, a fresh development agency and a broader attempt to make public policy work harder for the domestic economy.
One of the clearest tests of that ambition is a manifesto pledge to keep 70% of public procurement spending in Wales. It is an appealing idea, and one with real economic potential. The Welsh public sector spends more...
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than £8 billion a year on goods and services, and the Welsh Government itself has said reforming procurement should help innovation, resilience and the local economy.
For small businesses, though, the key question is not how many suppliers have a Welsh address. It is how much value actually reaches Welsh-owned firms, particularly SMEs. That distinction is crucial if the policy is to produce a genuine shift rather than a statistical one.
The Welsh Government has already recognised some of the barriers. Its procurement policy framework and policy notes call for more open, fair and transparent purchasing, with a stronger emphasis on SME access, supply chains and wider social value. The Procurement Act 2023 is also intended to simplify the system, open it up to new entrants and improve transparency.
Even so, the gap between policy intent and business experience remains wide. Business surveys cited by FSB Wales suggest many small firms still struggle to win public work, and a significant number do not know how to begin the process. That points to a system that remains too complex, too opaque and too often skewed towards larger suppliers with the resources to navigate it.
The evidence on local spending strengthens the case for change. Money spent with local suppliers tends to circulate further through the economy, supporting jobs, supply chains and investment. In Wales, where SMEs account for 99% of businesses, the public sector should be one of the most powerful channels for backing home-grown enterprise.
But if the 70% commitment is to mean anything, it will need a clearer measure of success. Counting suppliers alone will not be enough. Welsh Government should focus on the share of contract value going to Welsh SMEs, not merely on where a supplier is registered.
There are practical steps that could make a difference. Contracts should be broken into smaller lots where possible, with public bodies required to justify any decision not to do so. Tendering processes need to be simpler, payment terms more dependable and repeated verification requirements reduced. Procurement teams also need enough capacity to design contracts in ways that do not automatically shut out smaller firms.
Accountability will matter too. The target should not sit as a broad political promise. It needs to be carried through the wider public sector, including local authorities, health bodies and universities, with clear annual plans and open reporting on SME participation and contract value.
Support for suppliers would also help. A dedicated development programme through Business Wales, or any new agency that replaces it, could give smaller firms help with bid writing, accreditation, financial preparation and consortia-building.
Done properly, procurement can be more than a technical exercise. It can become a practical tool for building stronger businesses, deeper supply chains and more resilient communities. If the public pound is to do more for Wales, it must do more for the Welsh firms that are already rooted there.
Source: Noah Wire Services
