Making the Welsh pound go further!

Ed Evans, Director, Civil Engineering Contractors Association (CECA) Wales

If you hadn’t noticed, we have a new government in Wales. There is also a new prime minister in Westminster. Changes all around. New people, new ideas, new priorities?

However, one thing is unlikely to change soon: the amount of money available to spend. The magic money tree has gone -if it ever existed!

So, what do we do?

Aside from the obvious calls for fair funding for Wales – particularly the devolution of the rail network and the funding that should come with it – we are unlikely to see vast sums of money flowing into Wales.

That reality should focus minds on how we use the money we already have. We need to make it work much harder for us. And we can, but not if we keep doing the same old things in the same old ways. This is where the public sector needs to step up.

We keep hearing the familiar slogans: “Together, Stronger”, “small country, agile nation”, and so on. Blah! We talk a good game, but we do not always act with the same confidence or consistency. If we want the Welsh pound to go further, we must do better.

Take infrastructure. If we want a stronger economy, more people in employment, a more productive workforce and a better future for the next generation, we must invest in it. But how we spend that money is almost as important as what we spend it on.

The Welsh Government spends about £1 billion a year on public sector infrastructure projects. The total rises further when major one-off projects, UK Government investment in Wales and growing private sector spending – particularly in energy, water and marine – are taken into account. That is a lot of money. Spent wisely, it should deliver far more than the infrastructure itself.

Plaid Cymru entered government promising to grow Welsh businesses, increase the social value we get from investment, review the skills needed for the 21st century and use public procurement to keep as much of the Welsh pound in Wales as possible.

These are welcome ambitions. Andy Burnham came to power with similarly bold ambitions for change. Both face considerable fiscal challenges, so both must make the money go further.

As the trade body representing civil engineering contractors – the people who build our infrastructure – we called for a number of measures in our CECA Policy Asks report earlier this year.

It is encouraging to see some of those ideas reflected in the narrative of political parties with the power to act. The challenge, as ever, is turning that narrative into delivery – and that is where things have too often gone awry in the past.

So, how do we make sure that the billions of pounds that are spent on infrastructure, much of it through small but regular projects, really does give maximum value? What can governments do to make it better? Well, if you’re not into infrastructure then I’m afraid this is where it can get a little bit boring, but the devil is in the detail so please bear with me just a little!

Plan better and tell industry what work is ahead of them

When businesses can see future opportunities, they can plan with confidence: investing in modern machinery, taking on more apprentices, developing their workforce and growing sustainably.

But the public sector hasn’t been great in sharing its plans, even though it has this data. It just needs to share it with its supply chains. It’s called partnership and if you want to support your partners and get the best value out of them, then you’ll do this. It doesn’t happen well now and maybe that tells you all you need to know about the relationship?! This needs to change.

Streamline conflicting policies, regulations and legislation

We often hear the question: “Why can’t we build things as quickly in the UK as they do in China?” The answer has very little to do with engineering capability – we have that in abundance. More often, the challenge lies in the tangled web of overlapping policies, regulations and legislation that slows the delivery of vital infrastructure.

I’m not suggesting we sweep away the safeguards. Many exist for good reason. But the current system has become unnecessarily complex, creating delays, uncertainty and cost. It needs to be simplified and streamlined. Perhaps it’s time for a “quick and dirty” commission – similar to the approach Plaid Cymru has proposed for the agricultural sector- to identify and remove unnecessary bureaucracy while retaining the protections that genuinely matter.

Give the public sector multi-year funding certainty

The public sector, and local authorities in particular, are severely constrained in the way they deliver infrastructure projects by a funding process which only gives them funding over a 12 month period starting in April.

Yes, they could do things to manage this better but even then there are limitations. We’ve all experienced “mad March” when councils are desperately trying to get money “out of the door” before April and we end up with roadworks all over the place as they desperately try to fill potholes.

That’s not great for the private sector contractors either, who often must bring in labour from elsewhere just to meet this spike in demand.

The Plaid Cymru led Welsh Government have just announced multi-year SFS payments to farmers so that they can manage their businesses with greater certainty. Can’t we do this for local authorities too, so that their supply chain can also manage their businesses with greater certainty?

Address culture and behaviours in public sector procurement

Ask private sector suppliers, who depend on public sector contracts for a significant part of their turnover, what their top frustrations are and I’m pretty sure that the word “procurement” will crop up!

Which is a shame, given that the whole public procurement “machinery” should be an enabler for not just buying things but helping local businesses to grow, supporting people into jobs and apprenticeships, supporting businesses to innovate and get better, tackling net zero challenges and supporting local communities by increasing social value.

All these things should be a given and we have “encyclopaedias” full of policies, regulations, legislation and guidance telling the public sector to do this. So, why do so many public sector procurers just pass these “requirements” on to private sector suppliers in a cold and transactional way and then expect them to do “stuff” for the lowest price?!

We have too much bureaucracy and nonsense in this field when what we need is a culture change and behaviours that reflect a supportive and “can do” mentality where both public and private sectors want to do better.

This last item is the thing that will make the greatest difference in “making the Welsh pound go further”, not just in the infrastructure sector but across just about every sector in Wales.

Unfortunately, it’s the one area which is proving incredibly resistant to change but one in which the new Welsh Government, supported by those other public bodies who receive our funds, must make an impact if we’re to make the Welsh pound go further.

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