 Good morning and welcome to the fifth meeting of 2024 of the Economy and Fair Work Committee. Apologies have been received this morning from Colin Smyth. Our next item of business is the decision to take items 5, 6 and 7 in private. Are members content? Thank you. Our next item of business is evidence taking on the Consumer Scotland Act 2020 relevant public authorities regulations 2024. I welcome Tom Arthur, Minister for Community to Wales and Public Finance, who is joined by Hilary Gilbrath, solicitor and Neil Rafferty, head of heat strategy and consumer policy unit at the Scottish Government. I invite the minister to make a short opening statement. Thank you very much, convener, and good morning to the committee. The draft Consumer Scotland relevant public authority regulations 2024 are extremely straightforward on that. They list those public authorities that have to adhere to the consumer duty. As such, the SSI plays an essential part in confirming to public authorities whether or not they must adhere to the duty. The Consumer Duty and Consumer Scotland go hand in hand. When Consumer Scotland was established, stakeholder feedback identified the need for comprehensive change in how consumers are considered and integrated into policy and decision making. It was this feedback that paved the way for the idea of the consumer duty. The duty will require relevant public authorities—those listed in the SSI—to have regard to the impact of their strategic decisions on consumers in Scotland and the desirability of reducing harm to those consumers. The Consumer Scotland Act also stated that Consumer Scotland may issue guidance for the duty. Consumer Scotland has helped to agree to that as it can see the opportunity provided by the duty. Not only will Consumer Scotland be able to highlight good practice by public authorities in this area, but it will also be able to highlight to Parliament any detriment to consumers. My official was carried out stakeholder engagement before and during the consultation period on the Consumer Duty for Public Bodies consultation. Although there was broad support for the duty, there were concerns raised about this being an additional administrative burden and the need for clear guidance. Some stakeholders also disagreed that the duty should apply to their own organisation or body. My official undertook further engagement in light of those responses, emphasising that the duty was to be applied in a proportionate and targeted way and only to strategic, rather than daily operational decisions. Those further engagements and reassurance have been positively received by the organisation concerned and fully addressed the concerns raised. My officials also looked again at the authorities that were named in the consultation and decided that the duty should not apply to them all. As a result, some of these authorities have been removed from the final list. As Minister for Public Finance, I am well aware of pressures already facing the relevant authorities, and I am determined to ensure that the duty is not either in perception or in practice an unnecessary burden. The guidance that is being prepared by Consumer Scotland will ensure that public authorities know how to apply the consumer duty to their strategic decisions. Ensuring that the guidance captures all the information that those authorities will need will therefore be vital. That is why I have agreed to there being an implementation year to allow Consumer Scotland the necessary time to consult and engage with stakeholders on the draft guidance before it is finalised in advance of 1 April 2025. Consumers are lifeblood of our economy. The establishment of Consumer Scotland recognised that simple truth. The legislation before the committee today is an essential part of a process designed to ensure that public authorities put consumers at the heart of their strategic decision-making and thinking. I hope that members will support the draft instrument. Thank you, minister. There is now a chance for opportunity for members to ask questions. Can I ask about the level of support for the purpose of the consumer duty? We did write to the minister in advance in the morning session and thank you for the letter that we received. We did highlight that only 49 per cent of respondents had supported the duty being applied to the bodies as outlined. In response from the minister, you do recognise what the concerns are to do with workload and the guidance, but the letter did not address how those concerns were going to be addressed. You have talked a lot to what the guidance is, but one of the issues is around workload and administration. Are you confident that we can get more than 50 per cent, we can get broader support for introducing the duty? I will ask Neil to come in in a moment. Officials have had extensive engagement with public authorities and, as I touched on in my opening remarks, this has went some way to addressing the concerns that they have. What I want to reiterate and be clear about is the way in which this duty is applicable is to strategic decision-making, so at executive and board level as opposed to day-to-day operational matters. The guidance that will be prepared by Consumer Scotland will be draft guidance published ahead of the commencement of the duty and will be a public consultation undertaken by Consumer Scotland, which will of course capture the views of the various bodies that are captured by the duty, so working together and collaboratively to ensure that the guidance is most appropriate. With regard to the engagement that has taken place with public authorities to provide that reassurance and address concerns, I will ask Neil if he wants to comment. Mr Rafferty, when you respond, the minister's letter also said that the consultation responses would be published soon if we would give it an idea of when the timescale for that is, so we would have a better understanding of what the consultation responses said. I can take the second part first and happily say that we have actually published them now. As of the end of last week, apologies for taking so long to get around to that, but it has been done now. As the minister said, following the consultation, we have had a number myself and my team of direct one-to-ones and bilaterals with a lot of the bodies who responded, and some who haven't. That included the vast majority who had expressed some concerns about what the consumer duty might mean and its relevance to them as an organisation. Without exception, I would say that those conversations have put those concerns to bed. People are much more aware. Organisations are much more aware about what that means and what it doesn't mean for them. Their ability to use existing processes and assessments to demonstrate compliance with the duty and a better understanding as to why it applies to those organisations. That figure to be redone now would be a lot higher in terms of people who might not be overjoyed at the thought of the consumer duty to at least understand it and understand how it can respond to it in a way that it is proportionate, just as the minister described. Other members first ask questions. Brian Wattodd by Murdo Fraser. Who can argue with the bill that says that they want to reduce harm for consumers? I don't think anybody would argue that. My issue around the consumer duty stuff is the consideration of the benefit for consumers around reducing harm. How would you define that? For me, reducing harm would be in a public authority. For example, I have a couple of mental health third sector organisations that are having to close their doors because of the withdrawal of funding from local councils. That is definitely not going to reduce harm. We have closing of community programmes in sport, music and art. All those things that are being curtailed, that is not reducing harm. Local public procurement of food for schools and hospitals and so on, that has been squeezed as well, so that is not reducing harm. I think that my concern here is one, how you define that and two, how would you enforce that? You couldn't go back to a council and say you can't shut that just because of a budget constraint because it will cause harm. How are you going to define what reducing harm it means? It is an important question. On the point about enforcement, in terms of the consumer policy, there is a split competence between the devolved aspects and the reserved aspects, and advice on the advocacy of the devolved enforcement. These are matters that are reserved, so there is not the means for us to legislate for the enforcement around consumer issues. With regard to how individual public bodies interpret this and respond to it, it is an important point. It is why we have taken the approach that we have with this focus on the strategic level but also in not being overly prescriptive because we recognise that, given the broad and diverse landscape of public bodies, the way in which they will be able to apply this duty and take this duty and have regard to this duty will vary depending upon the particular functions and duties that they discharge. That is why it is important to give that flexibility for the duty to be for public authorities to have regard to the duty in a way that is consistent with their own functions and responsibilities. It is part of the requirement that there will be reporting. That is something that can be incorporated into existing reporting that local authorities do, for example, through an annual report. With that as well, there will be the guidance that is developed by Consumer Scotland. It is an NMO statutory body with statutory responsibility for coherence and strategic leadership within the consumer landscape in Scotland. Again, Consumer Scotland, who are directly accountable to Parliament, has an important role to play there. Recognising the limitations upon what we can do in enforcement is a collaborative process. We want to work constructively, and Consumer Scotland has an important leadership role to play in that. However, we recognise that the way in which the duty is actually had regard to will vary from public body to public body, reflecting their specific duties and functions. Good morning, minister. I will follow up Mr Whittle's point. I recognise that we are only looking at an instrument here that is specifying a list of public authority, but we are not looking at the substance of the bill. However, the issue that I struggle with is what is the practical impact of these regulations. Can you give us an example of something a public authority is not currently doing that it would do in the future once these regulations are in place? I cannot give you a direct example. What I can say is that there will be things that public bodies are doing at the moment, which would have a positive impact, but they might not necessarily recognise or identify that. The duty will bring that requirement to have regard to consumer interests and strategic decision making, again referring here to the executive board level. That will certainly be of assistance to consumer Scotland in that strategic leadership role that it has, but it will also help public bodies in considering their work going forward, where issues of detriment may be arising. I would make reference to my response to Mr Whittle that the way in which that manifest could vary given the diverse range of public bodies that we have across Scotland. It is something that will provide a significant opportunity for learning and to support the work of consumer Scotland in particular in that strategic role, and Parliament in its scrutiny of consumer Scotland and the wider, devolved consumer policy landscape. Neil, I do not know if there is anything that you would like to add or any reflections from the engagement with public authorities about how they may apply the duty. I do not think so, minister. There is something that we have spoken and said that that will not result in us doing or thinking about things that we are not already. In that sense, it is kind of built in braces. However, there will be other organisations for whom that is not the case. The consumer duty inspires a bit more thought and a bit more reflection on how some of the strategic decisions that have been taken do perhaps risk consumer detriment and make sure that there is a bit more thinking along those lines. However, it is one of the things that will be drawn out, both in the guidance but also in practice, as the duty is implemented. Okay, thank you. That is quite helpful. It does seem to me that public bodies should be doing this already, so in effect this is just putting into law something that in practice should be happening. Can I ask one more specific question, convener? I noticed Transport Scotland was excluded from the list of bodies that were covered by this. What is the reason for that? I am slightly thrown in my vote. Was this with regard to the meeting of transport authorities? The point that I think we have covered in the letter to the committee is that local authorities who are part of the transport authorities would be covered by the duty. Do we have a list of organisations? They are listed under executive agencies, but it is the regional transport partnerships who have been excluded. That was the point of confusion there. With Transport Scotland and local authorities both being subject to the duty, that was felt sufficient. I do not know if there is any further commentary you would want to add to that. No, it is the link to local authorities. Is that the reason why the regional transport authorities were excluded? They were the only organisation who would be in that kind of arrangement, because if it is about strategic direction, how does the regional transport partnership strategic direction be influenced by the consumer duty? Is that one step removed away from local authorities? Given the role of the Transport Scotland local authorities as delivery partners in terms of their engagement in their work and strategic decision making, they would have to have regard to the consumer duty. In effect, it avoids duplication. If there are no other questions from members, I will move to agenda item 3, which is formal consideration of the motion to approve the instrument. As an reminder, only members and ministers can take part in this part of the agenda. I invite the minister to make additional comments that he wishes to make and to move the motion. As no more we wish to speak, I will put the question on the motion. The question is that motion S6M-11828 to be approved. Are we all agreed? Thank you. We are all agreed and the motion is therefore approved. A short factual report of the committee's decision will be prepared and published. I thank the minister and officials for joining us today. I briefly suspend the meeting until I have for a change of witnesses. Our next item of business this morning is the first evidence session of the committee's consideration of post-legislative scrutiny of the procurement reform Scotland at 2014. I welcome Joanne Davidson, Scottish Chamber of Commerce Network, Scottish Chamber of Commerce, Stacey Dingwall, Head of Policy and External Affairs, Scotland Federation of Small Businesses and Colin Smyth, chief executive of the Scottish Wholesale Association. Lindsay Millins from Close the Gap is now unable to attend this morning, and I stand apologies. As always, members and witnesses can keep their questions and answers as concise as possible. That would be helpful. The committee decided to undertake this inquiry because procurement is an issue that has come up in a number of inquiries that we have done in this session, starting with supply chains but also our town centre and retail inquiry and various other pieces of work that we have done. In particular, we want to look at the 2014 act and see if it has made progress in the areas that we are hoping to make progress in and if there are areas in which we are looking for improvements. That is a general opening question before I allow other members to come in, so there will be a chance to expand on some of the answers that you gave to me this morning. I am looking for the key changes that the act has made for the businesses that you represent, what has been positive about the act. I will come to Joanne first. I think that, from a Scottish Chamber of Commerce perspective, we have seen some changes. We have seen the transparency of the process now as much improved, the obligations that are now on public sector bodies to publish opportunities, the way that they evaluate opportunities and obviously the reporting that is now done, the annual reporting and the procurement strategy publication is helpful and has certainly opened up the process. I think that requiring organisations to report how they are complying with the sustainable procurement duty is something that our members see as positive. Giving public sector organisations greater powers to seek information on subcontractors and supply chains is all helpful in bringing opportunities to SMEs, which we consider helpful. However, I think that there are still a number of issues that our members have raised with us. There are still a lot of inconsistencies and requirements across directorates, across authorities. One chamber member has given us an example of a bid that they had to write about their sustainability policy. They had to write the same information in three different ways because it was required to be put in three different formats by three different contracting authorities. That is not necessarily good. The information was not different, but the way that it had been requested and asked for and had to be formatted was different. There is an extra administrative and cost burden on that, too. Other issues around some of the accreditation requirements are required. There is a lot of cost involved in achieving those, and they can be onerous to achieve and to maintain, especially for small and micro businesses. Something else that was flagged as an issue is the procurement threshold, so those have not changed. Still, for goods and services, it is £50,000, as it was in 2014, despite the fact that we are in a very different economic situation. There are some issues around things like that. There are a number of other issues. I am sure that those will come out as we continue the conversation this morning. In summing up one of our members' conversations that I had, coming into this session and looking for feedback said that they would give it a C+. If that is helpful in terms of its performance, but certainly some good progress but lots more to be made. Colin, if I may come to you next, would you agree that it is a C+, or is it being more positive? It depends who we are talking to. I am here from the Scottish Wholesale Association representing the wheels to the food and drink industry, the wholesalers that are supplying into the public sector, the local authorities, schools, care homes, hospitals, prisons, etc. When we were out surveying our members, it was very much a mixed bag, a confusing bag, and certainly one that is not fully functioning, I will be honest. The changes that have been made through the public procurement reform bill has made it more cumbersome. There is apathy and businesses, members, producers that are no longer engaging with the process because it has become too cumbersome, too costly. When we look at the aims of the procurement reform bill, which we support, we support the aims as do our members and we support specifically the local food strategy that this also links into. It is actually not achieving the ambitions because it has become too big. The tender framework is that you have to more or less be able to provide the 32 local authorities with their food requirements just to get on the framework. That takes away the local buying opportunities to have local wholesalers come in and the local producers within those communities. Big procurement strategies was fine. The idea of bringing all the procurement from local authority into one central framework was good in theory. It is fine if you are buying computers or diggers or something that you might be replenishing or repurchasing every five years. When you look at food supply chain, food is eaten every day, deliveries are getting made three or four times a week into the schools, hospitals, etc. When you start looking at a national framework, that does not work for the frequency of deliveries, the amount of buying that is required. When you start drilling down into what the local authority requires and the regional variations in their food—dundee, tayside—they prefer lamb on their lasagna who knows, as opposed to beef. Just using that as an example, tayside, through the three local authorities there, or having to produce or provide 1,200 different school menus. That is horrendous. That is supposed to be manageable with a framework that is pretty rigid. It is not just a framework that is rigid, it is the regulations that sit behind that, which creates the inflexibility that we are talking about. Nutritional requirements for food and drinking schools might come on to that in a bit more, but that is preventing food from getting into schools. It is preventing local producers and suppliers from getting in, because a bread—this is a requirement of the nutritional framework—has to have three grams of fibre that is not available in Scotland. It is not even available in the UK. It has been brought in from the EU. I was going to say Belgium, but that is ice cream. The bread that is required by the nutritional guidelines is not available in Scotland. That is one of the things that we need to be working together to give confidence to local producers and suppliers to make that bread. We have a market, but there is no producer there who is willing to make it unless they have a guarantee of supply. One of the things that you said about food procurement is the same procurement process if you were procured in computer equipment that is not targeted. My analogy was—I apologise, I am not sure what the procurement process is for a computer, but I am just saying that bringing all the local authority procurement teams into one framework to reduce the burden and cost at the local authorities does not actually work because it needs regional procurement teams, because they know what the local school needs, they know what the school children like, what the hospital requires, and, as I have just outlined, the requirements of each region in terms of their food and what people like is different from up in the Highlands and Islands down to the central belt. I will bring in Tracey Dingwall. Tracey, if you want to respond to the first question. Yeah, no problem. Thanks for having me along today. In 2019, FSB published a report that looked at five years after the 2014 act had a level of playing field for SMEs with regards to procurement being created. It also looked at things that had come in prior to 2014 that had really helped SMEs, such as the development of public contracts Scotland and the introduction of the supplier development programme. Those were things that were already positive in place before 2014. The report also highlights things such as requiring public sector organisations to have a procurement strategy and to publish an annual report on that, requiring the use of community benefit clauses. There is a whole list of things that the act did bring in 2014, which have actually been really beneficial for SMEs. Since that legislation was passed, I think that we would say that our interaction with public sector organisations suggests that there is a greater desire to open up more opportunities to SMEs. However, what we are seeing is that statistical evidence has shown that that intent has not yet resulted in increased spending with local businesses, particularly at the micro end. There is still not the proportion of spending that you would expect to make on to those local enterprises. Thanks, convener. Good morning, panel. Maybe I could just follow up your point, Stacey, that you just made about access for smaller businesses. I am a veteran of this committee in different forms in previous sessions. I remember discussions about procurement going back many years and the frustrations that we would hear, particularly from small businesses, who would always argue that they were not getting a fair slice of the cake from public procurement. It always used to be the case, and I am interested to get your perspective on whether that still happens. It used to be the case that public bodies would hide behind EU procurement rules. Of course, we are no longer in the EU, so I am interested to know whether that issue is still there. Obviously, we are still bound by WTO procurement rules. Is that still a barrier? Specifically, is it the small and medium-sized businesses who are the ones who are still struggling to get a fair slice of the cake? The bureaucracy issue is definitely still there. That is the biggest reason that we hear from members on why they do not engage with that procurement process. I am talking about micro-businesses, so traders are one person. They are trying to run their business. I have personally filled out tenders, and I know how long it takes. They do not have time to take that out of their business to go for those contracts. When we surveyed our members round about this time last year, 71 per cent of respondents told us that they had never tendered or run for a public contract, with sole traders less likely to be involved than limited companies. Those who had gone for it said that they had found the process to be too challenging for them to navigate, and most of them said that it was because the system is clearly set up and geared towards larger businesses. Both of you are nodding. Joanne, do you have anything to add to that? I would absolutely agree with everything that Stacey has said. The cost issue, because time is money, especially in the smaller organisations, is one of the challenges that our members have fed back. Bid writing is a skill. If you are running a business and paying and managing accounts and managing people and servicing your clients and doing all that kind of good stuff, there is not necessarily that skill within the business for you to take advantage of some of those opportunities. There is the actual complexity, and there is also the perception of complexity, which is another challenge as well, something else that people have flagged to us. In fact, several people have flagged this as timing, so one of the things that often happens is that a procurement opportunity will come out or be published around about a major holiday period. The actual physical time that an organisation will have to respond to that opportunity is impeded by the fact that if they are a fair work employer and they treat their staff fairly and they do not want them working over holidays to complete these bids. There is a whole range of things that the process is masking that are real bureaucratic issues for the members that we have spoken to. Have you noticed an improvement since the 2014 act was passed in terms of reducing bureaucracy? I think that there is not necessarily an improvement in terms of bureaucracy. I think that improvements in terms of transparency, invisibility and the publication of procurement strategies and reports, I think that that is all very positive, but not necessarily that we are hearing anyway certainly in terms of the bureaucracy of the bidding process. I agree with everything that Joanne was saying. Just in terms of that burden and time and etc, SMEs certainly do not have it. In fact, the wholesalers who are dealing with all these SMEs and actually encouraging them to come into wholesale, so the wholesaler distributes into the NHS, the wholesaler themselves do not have the time. I have got one member sitting currently with a procurement contract on their desk who is going to take one person in their office three weeks to complete to get all the information that is required. That is the burden of it. There is no way that an SME is going to have the time, the capacity to do that. There needs to certainly be a simplification of the framework, of the tender process and indeed actually does it need to be so cumson that there is the opportunity to potential or actually of having a two-stage process. One of the fundamentals is that and one of the reasons that actually since the reform of the act, there is less wholesalers applying is because it is cost-led. We will probably come into that, but the contracts are 75 per cent of the waiting is towards the cost of goods. We should be looking at the benefit of cost because cost and looking at all that happens with the cost of goods as it goes to basically the cheapest, whereas it is not achieving the aims of the strategy in terms of local community wealth building, getting more local producers into it, keeping that pound in the local economy. My goodness, that bread has been brought in from the EU. If we simplify the process and look at the whole food system, we can then create economies of scale that encourages more local producers to make the bread, to make the ice cream that I mentioned that comes from Belgium. It then creates more jobs that create the community wealth that the aims of the strategy are trying to do. You mentioned EU procurement restrictions and WTO, but that still exists. I will be honest, it is partly because Scotland is trying to align with EU regulation in the hope that it will get back into Europe. That is still hindering the framework and the strategies because instead of saying that you need to select Scottish product, Scottish product needs to be the primary choice, you cannot because EU regulation does not allow you to do that. We are tying ourselves and not. We want to do one thing, but legislation and restrictions are preventing everything that we are trying to do. I am sure that Brian Whittle, who is obsessed by the issue of local procurement, will follow those questions up in due course. I will go back to Stacey with slightly different questions. In your submission, you talked about issues around prompt payment, particularly for second or third tier suppliers to contracts. How much of that is still a problem and what progress is being made trying to resolve that so that people are paid on time? That is still a significant problem. For our members, I mentioned a report that we did last year, which found that it was an issue for about 50 per cent. Over just over 50 per cent of Scottish small businesses had experienced late payment. Looking at it, we do a quarterly confidence index survey of our members. The one for Q3-23 had increased from 51 per cent to almost 57 per cent, and the last quarter had experienced late payments. That was an increase of 25 per cent on the previous quarter of Q2-23, so that is a significant issue. Are those late payments coming from public bodies or from other people in the supply chain? It is not split out, so it is a mix. Evelyn Tweed is followed by Gordon MacDonald. Thanks, convener. Good morning, panel. Some of the things that you have said so far is quite a worrying picture, I think, your painting. Not fully functioning, regulations inflexible, confusing picture, cumbersome and bureaucracy, lots of it. Can you each give us two or three points on how we could streamline things, how we could make things better? What would the future look like if you gave us two or three points? What are we really trying to drill down, how do we make things better for the future? Colin Fust. I can give you more than two, and I am happy to do a supplementary. I mentioned about the actual framework and potential having as a two-stage process to reduce the burdens on those that are bidding. There is no point in everyone having to give supply all the information if they are never going to get the tender. So there is the opportunity of having it as a two-stage. What that might look like, I do not know, but a lot of the tenders, and again it is food and drink that I am talking about, a lot of the tenders, the waiting is 75 per cent based on price, 25 per cent on everything else, and the 25 per cent is never going to have any job to have a difference if it is actually 75 per cent on price. So the waiting needs reviewed so that there is actually more measurement against local supply, local product—and when I say local, I mean Scottish, but albeit it can be in a true local sense and that would be ideal. So looking at the sustainability credentials, the food miles and journey, as opposed to just the price of it, because going back to that benefit of cost, your local product, local supply chain or local producer is going to be more expensive generally, I would suggest, than a mass produced imported product. But again, if we can give the confidence to those producers and have more focus on the framework to ensure that there is more local product coming in, then we can actually enjoy the benefits. So that £1 is staying in Scotland which I think is about £2.3a or for every pound you get an extra £1.38 in the local economy, depending on which metric you use. The other one is on training and education because actually the system, the framework as it is presented just now started with the end-user, not understanding the actual food supply chain that sits behind it, how the wholesalers operate. There is no one wholesaler servicing the local authority. There is just in the same way that there is no one wholesaler got all their business with that local authority. Those wholesalers are still supplying the high street that pubs the club to restaurants, convenience stores and actually anything, any disruption in that market, as we saw during Covid, as we are going through some troubles at the moment in the hospitality industry, anything in that, those other sectors, then impact on the supply chain going out to the local authority. But that is not being considered. Then when you put in the restrictions that have been put in place in terms of the nutritional framework, there is no flexibility. So actually let's sit down with the industry, with the producers and look at how food systems work and how actually you can get the food. Nutritious food but actually works for everyone and our delivering growth through wholesale programme that we do to help local producers understand wholesale as a route to market and the requirements of local authority and all the other sectors could actually be developed to help in this process, help educate local authorities, Scotland XL, supplier development programme on actually how food does get from farm to fork. We actually see a huge potential in the community wealth building legislation to address some of these issues. So for instance looking at the community wealth building pilots, there was five of those and we've been really involved with those and we have a team of development managers who work in local areas with our members. So the official figures before I go on to all the ground aspects, when you look at the stats for those pilots, so Cluck Manager for example were one of the pilot areas, they set a target in their 2019 strategy to take local spending to 21.5 per cent by 2022 and they actually hit almost 25 per cent by 2021. And also five accounts when you look at them, they made significant progress and gone from about 22 per cent spend in 2010-11, which is the baseline year that they use, up to over 40 per cent 10 years later. So you can really see the benefit of these pilots. My colleagues tell me that there's two factors which have enabled to this progress, so that's ownership in the part of local authority and strategies with clear targets that have detailed monitoring arrangements, which is something that we're calling for as part of the community well-building legislation for that to be statutory. So, for example, the level of detail that you would find in Cluck Manager's annual procurement report tracks progress, so all stakeholders can see what progress they've made but also sets out concrete actions that they've taken in order to produce and sustain that progress. So when I was actually doing the submission, I compared that with Aberdeenshire's report whose spend had actually increased by about 2 per cent since 2010. So there was no mention of community well-building in Aberdeenshire's report at that time. However, I checked yesterday and the published one since then and community well-building is mentioned throughout their latest procurement report. You look at their proportion of procurement spend, it's actually increased by more than 2 per cent year on year, so you can see the benefit that's set in those targets and having that kind of tracked progress or the ability to track the process has in procurement spend. Thank you. I agree with those points, but I think from our perspective, more meaningful pre-bid dialogue, I think, would be incredibly beneficial. So meet the buyer events and those types of things are useful and we've had positive feedback on those, but they don't really go far enough and I think particularly the more technical or complicated the procurement, the better that pre-bid dialogue should be with potential bidders. I think one example that we were given preparing to come into this session this morning was it was a Scotland Excel framework contract for new build residential construction, so what my understanding is that they did there was before they issued the bid, they went to all local authorities that were forming part of the framework and said, do you intend to put any new build in over the period of the framework and the local authorities were then able to come back and say yes, we are or no, we're not and then that way they were able to inform the bidders which parts of the country were going to have those opportunities and so people were able to self-select essentially whether they would choose to bid for it to be part of that framework depending on what was happening in their local area and if there was the opportunity for there to be quite a large scale new build piece, then they were able to sharpen their pencils a little so there was a win-win in terms of both the process that was gone through and the efficacy of that process but also the public purse because those bidders were able to look at costs accordingly. So that was one example and obviously that's a very specific thing and it's for a large scale works framework contract it's not going to be relevant in all areas but that type of approach to that sort of intelligent understanding approach is helpful and I think the other thing that's been flagged as on a much more practical level is Public Contract Scotland, the Public Contract Scotland website which is great but my understanding is it's a bit out of date now it hasn't been updated in quite some time it's a little bit clunky, can that be improved, can AI for example be used as part of that platform to do some sort of contracts matching service so that it wasn't necessarily particularly for smaller micro businesses up to them to troll through and understand and decide for themselves which were the best outfits for them but there was some way that they were able to be matched with opportunities or the opportunities were able to be made visible to them not to give them any advantage but just simply to make them aware that these opportunities existed so those are sort of two I guess more practical things that our members have have suggested could be it could be improved. I also notice in the evidence that we had taken that a focus on cost leaves no slack this is what we heard in the system for innovation. What's your views on that? What are your members thinking at the present time there is no slack? Certainly it was one of the things that I should have said at the very end when you were asking about things that can be improved I think the issue is actually that the local authorities their budgets are being squeezed and I feel I appreciate actually I should have said that I said that we understand this is about the public purse this is public money we are talking about here but equally there's problems in how that is spent and it's not not giving the big bang for the bug that it should be so local authorities the budgets are being squeezed but that includes all meals for the schools the NHS and everything and it is not even keeping track with inflation now if you think that the the costs coming through the whole Seattle channel over the last 18 months you know because of all the everything that we know about from the Covid Ukraine war etc etc you know we're seeing costs 20 50 potentially double on some some food items that's not being reflected in the budgets with that are given to the tender process to say tender tender for the school meal or or whatever it might be so all we're doing is is that that drive to a lower quality product so innovation costs money innovation is actually having a Scottish product instead of that product from from out with Scotland that's innovation you know but we can't afford it because the budgets aren't there if if local authorities were given the budgets to actually support what the framework is intended to do or what the procurement strategy is supposed to do you would get that back in two two times but if we continue doing what we're doing we're actually not going to be fixing anything and your food system is going to be broken because you aren't going to have anyone bidding for any of the tenders because there's no profit in it 1.2% net margin is what the whole Seattle channel operates on so when we start looking at costs coming down the road in terms of April like the wage rate that this is this is a bit of a crippler for our sector and for the local authorities going forward we're certainly concerned you know I said our call with regards to community wealth building is to set those targets but we're fully aware that that will require local authorities to provide additional resources for that so we're probably a bit concerned in the legislation if additional resources wasn't given to local authorities in order to deliver in these targets and monitor them and as well as local authorities resources will need to be given to programmes like the supplier development programme which is a really useful tool for our members and I know they want to do more and could do more but it's just a question of resources so I think in order for the community wealth building legislation to be successful there needs to be that dedication of resources or we will have this innovation or just achieving what the community wealth building names are if we won't be able to achieve it if we don't put those resources in. Gordon Macdonald Thanks very much convener and good morning panel I wanted to ask you about the annual procurement reports and how we could make them better but just before I do that Stacy I wanted to speak to you about what you mentioned in community wealth building from your written evidence you highlighted two cases Clackmannan and Fife and actually they look at both their procurement reports and they were very good and just to update you Fife is now at 49 per cent local spend as opposed to 22 per cent back in 2010 do you think having that level of detail in the procurement report encourages your members to bid when they see that the trend is to improve? Absolutely you know it certainly helps me in my job to track and you know look at what we want to recommend so that we can as I said we have those colleagues out in different areas of Scotland who will be engaged with the local authority on their local procurement work whether it's consulting on their strategy, development of the report it's really useful for us in order to be able to meanfully participate in those conversations as well as encouraging members. Why do you think that a lot of local authorities don't have that level of detail in trend and analysis because I've had a look at two or three others which will remain nameless at the moment and there was nothing like that level of detail that's in the Clackmannan report or the Fife report? Yes the Aberdeenshire report that I highlighted obviously they had addressed those issues but the report that I looked at yesterday but I think it is just to go back to that as the level of resource that people have to dedicate that it's not there. It's quite interesting the difference in size between Fife and Clackmannan because Clackmannan is often a small council it's often felt they don't have resources but they have you know you've got one the smallest ones in Scotland and one of the biggest ones so often size and capacity is an issue here but it's obviously not in this case. I think they've chosen to prioritise it obviously you know they've made that commitment which I don't know if that is easier to maybe do in a smaller authority but I can see particularly Clackmannan sure they've really embraced that pilot and they've made it successful and I think that's why we're calling for that you know we look at the progress that different local authorities have made if you look at the improvement service data and it's not it's not consistent so there's some they do really well one year but then they fall back the other year and it's just kind of a bit all over the place which is what suggests to us that there needs to be the requirement really for that commitment and the targets to be set so that we can maintain or indeed improve the progress that's been made. Is there anything specifically that your members will like to see in these procurement reports? I mean these procurement reports useful and is there any changes you would like to see in them that would make it more useful to your members? Yeah well I suppose you know it's different what would be useful for me with more time to read these reports than you know your average small business on the ground so you know they're not going to read they don't read our reports they're not going to read local authority reports so it has to be you know whether it's an infographic or just something that's a one page right there. Colin in your written evidence you said that not all local authority contracts are being reviewed but simply renewed preventing new bidders or suppliers from getting the opportunity to be listed there's no information like that in the annual procurement reports about companies that have bid for a contract and been unsuccessful do you think that that information should be contained in the report? I think it certainly would be helpful to understand why bids haven't been successful because it's only with that you would then encourage others to potentially bid or see actually the flaws of you know the system I mean certainly you know building on what Stacy was saying in that discussion you know that I think what was just discussed shows that actually it's working in some areas and some councils and that's where I was saying at the very start it's a mixed bag from our members we have members that is working well for you know we've got some that are going yes it's okay but it needs fixing there's others that are just saying no it's just just not working at all and it's taking those reports to understand the learnings I know we always talk about learnings but really it is if it's working on one then there's no reason that can't be replicated in others and there is the examples of that within our sector and you know Aberdeenshire again it was venison you know we've got a problem with wild venison by actually it's a very healthy nutritious protein rich red meat so actually one of the councils worked for the venison farmers Factor Gail and Bute did it as well to make venison burgers that are now going and sausages that are being being distributed in the schools and going down very well so there is success stories in there it's just that there's not enough of them and that's what we need to to look at changing here today and the recommendations that come out of the committee and John what changes would you like to the procurement I think I mean there's a gear as much of what's been said by Stacy and Colin but I think anything that increases the level of transparency that's available because that will help to demystify the process for businesses and it will help to encourage those who maybe have got a perception about it that actually this is something that they can they can try and and do and one of the some feedback that we had from one of our members was around the publishing of headline figures and those headline numbers you know the amount of contracts that are awarded to businesses of various sizes isn't really that helpful it's about the value of those contracts and how so if even you know if there's a if there's a greater percentage of smaller organisations that have been awarded those contracts what does that mean in terms of value if it's still very low value then it's not really progress so you know there's a whole there's a whole host of things around that that level of detail I think the other thing that was fed back to me when I was preparing for this meeting was the length of time that it takes a contracting authorities to award a contract so very often timeframes that are given at the start of a process are given in good faith and obviously people try to tear to them things happen things are delayed sign-off is delayed so how long is that decision period how long is that taking because that can help as well in terms of planning and resourcing and people deciding on a cost basis whether or not that's work that's worth undertaking and I think the other the other sort of element of of that as well as um is maybe some case study work within you know some actual stories of procurement exercises I mean I'd given the example earlier of the framework the residential build framework contracts things like that could be helpful both in terms of encouraging bidders and organisations to engage with the process but also perhaps in other local authorities or commissioning authorities learning from good examples of what else is happening elsewhere so that that could be helpful to okay thanks very much thank you Kevin Stewart to follow by Colin Beattie thank you convener and good morning panel I should probably begin by saying that I'm a bit of a procurement anorak and when I was the convener of finance in Aberdeen city I used to have the pico software system for procurement on my computer which annoyed a great amount of people it has to be said but it taught me a few things and I want to come to some of the points that Colin made first around about frameworks and some of the agreements I think it would be fair to say that in my day I used to get frustrated when some of these agreements were more in the hands of the solicitors and the accountants than they were at the end user of the product is that a frustration for members who's solicitors and accountants I'm talking about local authority ones in this place yes I mean I was like you know more than me on this one and certainly you know that cost piece I've already articulated is the big the big stickler here you know that we aren't actually the you know we are looking at the cost of the food as opposed to the benefit of the cost I'll go back to the there isn't another there is a lack of understanding from local authorities and you know even Scotland XL and don't get me wrong Scotland XL supplier development programme do a good a good job and what they're trying to do a good job with what they've been given I think the fact that we've got supplier development programme there to hand hold people through the process says that there's actually complexity you know if you need somebody to hold your hand but the cost yes the cost is an issue it's it's prohibiting everything that the strategy is trying to achieve so cost is always going to be an issue let's be brutally honest here cost is always going to be an issue particularly in these tough times but what you don't want is additional cost in terms of some of the bureaucracies that you've described and what you don't want is additional cost in terms of procuring products which at the end of the day might not be the best one so let me give you an example of where I was coming from around about in the hands of the solicitors and the accountants rather than the end user because one of the most interesting things that I find were those folks that were the most canny and knew what they wanted were the school cooks they knew what they wanted you could see in the system exactly what they were going for and what what they were missing out right they knew what was best and following of course the guidance at that point but what you saw at points was the actual framework for the procurement of certain foodstuffs didn't match the needs of those school cooks who I think knew best because others were involved in the procurement who probably should have kept their noses out quite frankly is that something that you and your members find yes I mean going back to the schools the chefs the the cooks absolutely I think it goes back to they know they know what they want the wholesaler is trying to give them what they want but actually the regulations don't allow it so if we take you know I've used the example of the bread but that's just one example there is actually anand bread as well you know that three grams of fire or the inflexibility that the local authorities have to actually go out and procure what they want is is non-existent so one of the local authorities there was anand bread that was given to the kids with her korma but it only had 2.3 grams of fibre and it's opposed to the three grams I think we get the point about this and basically what you're saying is that some of the regulation that exists does not make sense at this moment because product is not available and it's not what folk want anyway there's no flexibility in all it means that the kids aren't getting what they want so actually they're being forced down the street to high street to buy the unhealthier choice and in fact yes stacey what's your members view in terms of frameworks themselves is there that too much bureaucracy is it some of the wrong folk that are putting in place the frameworks and the actual tenders yes so as I said actually when we surveyed their members it was quite a small who'd actually been involved in the process itself but for those who are bureaucracy is the issue our members told us last year that they're spending not just on procurement related regulation but eight hours a week on regulatory compliance so if they're already doing that and they're not involved in procurement they're not really looking to take on any more yeah absolutely um the so I think I think it's the the additional work and the additional cost is one thing but even on a framework there's absolutely no guarantee that someone's going to get a call off on that and therefore they're not going to get an opportunity so one of our members flagged a couple of examples to us one they came second on a particular framework by a quarter of a percent and they've been on that framework for four years and they've had no work through it another the bed for it wasn't I'm not sure if it was a framework contract but they've described it as a big bed and they lost by one 17th of a percent now I understand that the scoring mechanisms are there they need to be there that's of course there has to be a mechanism by which these these beds are scored and decisions are made understand that but that suggests you know one element of I'm trying to use a more diplomatic phrase but it suggests an element of it suggests that a level of influence I guess in terms of that decision making you know when it's coming down to 17th of a percent you know that perhaps sometimes you know that there's an overweight thing perhaps to some of those quantitative metrics so you talked earlier about there being more transparency the fact that they're told us 17th of a percent is that not a little bit more transparent than it was before yeah but if that then that's not if that if the reasons why there was such a small fraction and it aren't fully explained and made transparent then that's still an issue so that comes on to the next part of my questioning around about the feedback to unsuccessful bidders has that improved is there room for further improvement what do your members think about what they are told after that unsuccessful bid for me yeah if you want to start drawing that the grand yeah I think we had sort of conflicting feedback on this I guess obviously because of the way that procurement is done and how it's managed to cross directorates and cross commissioning authorities there are obviously differences in approach although clearly there are regulations those regulations are quite light certainly from my reading of them in terms of exactly what should be communicated and when and and that sort of stuff so I think I think that that has been an issue certainly for a few of our members is that they've had issues with feedback also I think in terms of feeling like people can challenge I think there's a a little bit of fear around that in time and in case it may in case it may preclude them from further opportunities now that's possibly perception rather than reality but that is an issue for some people in terms of challenging decisions during the standstill period so we need to get rid of some of the perception as well I think I think there's a perception issue there is a reality issue but there is also a perception issue too in some areas Stacy in terms of that feedback from your members yeah I would definitely agree there's a perception issue in terms of you know having worked to the job where I had to do tenders every day there is you know when you go into it you're like oh this is going to be an nightmare but then some of them you get into and it's actually fine so I think it is about a lot maybe 10 years ago they went for a contract and it was a nightmare but and it will put them off to this day to be honest so I definitely think there's an issue there in terms of feedback yeah 32 local authorities patchy depending you know some will have a good engagement depending on the relationships of local authority if it's one of the bigger ones then maybe there's not those relationships there but I certainly agree with that point where they wouldn't they'd probably just want to kind of keep their again I'm trying to be diplomatic I haven't tried to just kind of maybe not engage in that and kind of keep their I can't even think of the word now just kind of keep in the background and not kind of bring that attention to themselves in case it does enter them Colin, please yeah I don't think I've really got much more to add it is just about rebuilding the confidence and trust in the system which is broken so very briefly and convener that feedback being different from different public bodies 32 local authorities for example that in itself off putting for folk do you think that we should maybe see if we can come up with a more uniform scheme of feedback again opening up that level of transparency community wealth building offers an opportunity that legislation there's huge opportunity to address these issues there do you agree anything that anything that improves the transparency of the system and increases confidence in it is worth it it's just about making sure that the measurements are tangible and actually mean something on back to think that Stacey's point earlier. Thank you very much, convener. Okay, thank you. Colin Beattie is followed by Brian Whittle. Thank you, convener. Good morning. I'd like to just take you through a slight perspective here. I'm going to refer back to session five of the Economy, Energy and Tourism Committee which heard concerns that the practice of procuring through large contracts could be making it harder for smaller or newer firms to access opportunities. Now that that's despite the practice of dividing these contracts into lots. Now I assume this is still going on. Do you have views on these practices and how they're impacting on business and what are some of the challenges that framework contracts can throw up? Maybe I'll just start with you, Colin. Thanks, Colin. Well, you're first on the right. Obviously, we represent, as a trade body, we represent everyone from the large nationals down to the 95% of the wholesale sector in Scotland that are SAMEs and it is a challenge for everyone that large have a challenge as much as is small. But I think going back to the original point at the start, this framework, the reform actually favoured having a big contract rather than regional local contracts where it was then more accessible for smaller producers and smaller local wholesalers to actually bid for those contracts. What happens if you then have a bigger contract that is supplying multiple tens of local authorities? That means that the suppliers that they bring in and put into the schools and hospitals must have the capacity to be able to fulfil those contracts, but that is not necessarily going to be so for a small baker or whoever it might be, they might not have that scope and capacity to service 10, 12, 15 local authorities, they might have the capacity to sell a couple in their local community. So it has hampered the ability of smaller producers, smaller wholesalers, to come in and bid for the contract and that's why we need to rebuild the conference because prior to the changes there were more wholesalers and even local suppliers bidding for those contracts. Can I ask you if this is sort of pushing the smaller businesses into a position where they are subcontracting from a larger business that has taken the main contract? So some of the larger ones that are winning it are then subcontracting it to smaller. So if you look at the Highlands and Islands it is supplied by a larger wholesaler, but then they subcontract that to a local regional supplier or wholesaler in this instance, sorry. Are there any other issues about framework contracts? Or is that the one big one? Is that the model you've described Colin, so is that then a positive? Because what you've said is that it needs to be in order to win the contract, the big is better in some ways, it gives more economic economies of scale, but then they subcontract to smaller companies. So what's the problem with that model? Why is it not advantageous for the smaller companies because the big one wins the contract and then they still give supply to the smaller ones? You've got 32 local authorities but you don't have 32 local wholesalers supplying into each of those local authorities. You have some regional supply but I think a lot of it is on a national supply basis and they will subcontract where it's not financially or commercially viable where in terms of the procurement framework or the overall strategies about community wealth building and where actually we can get more local supply chains working rather than one big one and it's also about the Scotland's food security going forward you know we need to be providing the confidence to the farmers to the producers but actually there is a demand for the product and you know we are willing to to invest and giving them the confidence to produce. I think when it comes to Scottish product a lot of it is premiumised people are quite happy to take a margin on because it's made in Scotland but that actually doesn't help anything because it then doesn't make the Scottish product become the primary choice the first choice it's still the cheaper bigger brand and so there is also the how we look at where the product is sold you know even just down in the cafe in the parliament here you know you have your Scottish soft drink that's at £3.30 but you've got your national brand it's £2.50 or whatever it was so everything that we're trying to do economies, Scottish producers etc we're actually not helping ourselves by premiumising it and making it prohibitive to anyone to to even invest in and so the good food nation bill was passed in 2022 has that made any difference or had an impact on the kind of issues you're raising? No I mean it is actually totally interlinked to everything we are talking about here and the good food nation is about you know those local supplies and producers but again it comes back to that confidence piece if we can use the public sector as the key to unlock the investment that is required by manufacturers say to them we have already made market you can have your products as first choice into the schools and the NHS etc and then that grows economies of scale and then starts to bring down the cost and that's partly what that are delivering go through wholesale programme is designed to do it is supported and funded by the the Scottish Government but we need somebody to to give some of that scale to build that confidence I do I do apologise it going at the same confidence a lot but it is there is a lack of confidence in the system there's a lack of confidence for local producers to invest in their businesses and the jobs and the local community because big contracts that we're talking about here are not willing to invest in buying them because it comes back to cost thank you thank you okay Stacey yeah I think that model we kind of talked about where a larger company gets it and then there's a subcontracting opportunities for small businesses it can be great you know because it does give small businesses that opportunity however I think the collapse of carillion shows what the issues can arise for small businesses when they become part of those really long complex supply chains so there is an issue of complexity but I would say the main issue which we touched on earlier for small businesses within the supply chain is late payment you know that obviously Scottish procurement legislation does have requirements upon the primary contractors in relation to their suppliers but we feel there's more needs to be done obviously I've highlighted the on-going issue that our members are having with late payment to a UK level FSB have been campaigning extensively on that for years and we saw at the autumn statement just at the end of last year the chancellor commit to so from April next year companies with a turnover of five million or more will be banned from bidding for public contracts if they have a record of paying their suppliers after 55 days or more so we're really looking for things like that which make it clear to real government to make it clear to these kind of large companies that is unacceptable to treat your small subcontractors like a kind of overdraft facility to be honest. I think broadly I've heard about large companies taking on the contracts but completely subcontracting everything so they're really just managing the subcontracts rather than rather than any products or anything in there is that something you've come across personally in a previous job in the third sector yes working for part of a larger organization that was quite commonplace to do that but I think it's maybe a different approach with your the third sector large employer managing that they are probably quite likely to have a different approach to their smaller subcontractors than a private sector company might. It's hard to tell whether it's a positive thing or not that everything's subcontracted to local businesses. It can be but it just depends on the behaviour I suppose of the as you say the manager if they're not doing it themselves. I would agree with what Stacey said around risk to the small provider in those types of situations as you've described and the late payment issue is definitely an issue. I think the framework contract thing is we haven't had a tremendous amount of feedback about it from some of our members. I think there are positives from a contracting authority perspective in the sense that then the prime contractor takes on a lot of the risk and a lot of the management of those suppliers which then means that the contracting authority doesn't have to do that so from a public push perspective I can see some benefits there but I think the challenges there are around those larger organisations having that localised supply chain and having some rigor about how that localised supply chain has been created and making sure that they've got all the elements in that localised supply chain to be able to deliver the contract so that they know that there's rules for lots of organisations and that there's rules for chambers of commerce, there's rules for the FSB in terms of trying to encourage some of those organisations to look at those supply chains and make sure that they're diverse, they're local and they've got community big benefits embedded et cetera et cetera so I think that's the only issue to flag there from our perspective. Are there any successful examples of local cooperatives getting together on a regional or whatever basis in order to bid because that would have the same effect as having a large company bid and then subcontracting except that would be obviously kept in Scotland for local benefit? I'm sure there are, I'm not personally aware of that many, I mean I'm obviously aware of regional initiatives such as the city region deal that we have here in Edinburgh and the collaborative approach so that's not the same thing admittedly but you know that collaborative approach in terms of bidding, competitively bidding for a piece of work I'm not aware of an example but I'm sure they exist, I'm sure they're out there, I'm just not personally aware of them. And just one last question, I mean talking to a number of community groups of my own constituency and they have been, had experience of bidding for business and they've had difficulties with navigating the websites and in one case they gave up because it was just too difficult. Is that an experience that you've had any feedback on, the complexity or inefficiency of the website? Stacey, you're nodding. Yeah, so as I said I used to work in procurement so I used to go on public contract Scotland daily and it still took me ages to navigate my way around it and that was my job to do it. It's a helpful website public contract Scotland probably when it was developed however many years ago but it's a very old website that's very difficult to navigate as I said I was my job to navigate it so at least I was getting paid to do that but a small business you know that's additional to their responsibilities they're not going to spend the time to navigate that website it definitely needs updated. Colin, have you had any experience in this? I've had no feedback and reference to that specifically sorry. Joanne? Yes, I mentioned earlier actually when Gordon had asked about improvements or someone had asked about improvements yeah I think public contract Scotland is a great resource it's a single point of access which is always helpful but it is clunky as outdated I think updating that is definitely something that would benefit small small to medium enterprises and encourage that bidding culture that we've talked about bringing in some new technologies AI for example looking at contracts matching so that it's not such a labyrinth to navigate might be helpful to so absolutely I would say that that that's something that should happen yeah. Thank you. Good morning panel just on if I could follow a quick question from my colleague there around the big contracts and subcontracting them out I mean that you know as a model phraser might have slightly alluded to there is I'm more on a passing interest to public procurement I've heard for example in the construction industry that it is big companies coming in winning the contract and then subcontracting out completely so all they're really doing is just taking a margin off the top the issue here really is around you know local authorities having one contract to deal with rather than six or seven is that something we still have to to address I'll ask you to add. We've not had any specific feedback on that not specifically from that sector on that issue I'm not quite sure how that procurement piece works in terms of obviously I mentioned the example of the new build which is a framework contract run by Scotland Excel for all of Scotland's local authorities but I'm not sure of I'm not aware of any other arrangements in terms of framework contracts around that sector specifically. No it's just thank you but the you know the panel you've very well highlighted the administrative burden in bidding for public sector especially for SMEs and the newer companies but the policies such as the quick note system has has that had any impact in sort of reducing that red table I'll come to you stay safe. Definitely quick quotes is definitely popular among our members we've looked at obviously it's got kind of limitations around a threshold the thing that you can put through quick quotes so we think there's definitely it would be of benefit to expand those thresholds for quick quote to allow more contracts to be put into it. Colin, let's talk about food procurement. You know we've had these conversations before when I did some work in this when I first came into Parliament continually eight years ago and we were all 32 authorities where the food was procured from and it's staggering actually staggering where everything came from you know you alluded to ice cream from Belgium but we're also root vegetables and you know potatoes from Ireland it was you know and the one that the press jumped on was chicken from Thailand for some obscure reason so it wasn't a very good picture back then and even though there were some local authorities like East Ayrshire who were procuring 75% of food into local authorities is the picture any better now I don't see it at the moment I don't see much improving it that a bit but from your perspective has that picture improved? No I think hopefully from the evidence that I've previously given Brian that I don't think it has and again as I said I think it's going to get worse I mean obviously I'm not going to labour the point on the bread in the ice cream but actually one of the biggest and most popular items on the school meal and it is totally meets all the compliance was pizzas and I say was the pizzas because up until well at the end of last year 2023 the sole provider or manufacturer of those school compliant pizzas McKen pulled out pulled the pizza from the market so we now have actually no pizza on the school menus or the one that's compliant anyway because again we've not invested in local procurements the local procurement strategy bizarrely Pusini is available in the school and it's a Scottish producer of the Pusini and he could they could quite easily make a pizza that's compliant for the schools but the schools require a square pizza and he makes a round pizza and so and to make a square pizza involves buying more kit molding and another production run etc which you know if Scottish Government were to come along and say yep we'll give you the money to buy that kit happy days the school the kids have their pizza again and in the meantime they're probably using their free bus pass to jump on the bus to go down the local high street at lunchtime to buy it from the local bakers so you know we are still fixated on the price as I said 75% of the procurement or on most of the tenders is focused on price so when we come back to reviewing and feedback and what not that's where I'm saying actually let's look at what the other 25% means actually let's rebalance the waiting so that it is actually more about local food procurement whole system food systems whole of life costs as opposed to just that Thai chicken and actually on that we are we are trying to work Scottish Government doing a bit of a project on how actually we can create demand for Scottish chicken that is price comparable to to the others that are on the market but yeah I don't know if that answered your question Brian Fooley no I mean you just you know just added in you know square pizzas and round plates um who can see the problem there at all but one of the things I was going to I wanted to ask you about and you've alluded to this as well as is the issue of price we're focused so much on price and the bottom line is you know the way in which we produce food in this country and and the rate the proper cost associated with that you know even down to you know pain you know living wage and above can make from a if we look at price as the only or the main objective here puts our producers at a disadvantage so do you think we're we're not looking as you said it's the whole life if you like the impact on environment of of reducing you know miles from from field to fork of the health impact of of producing or offering highly nutritious food to our schools and hospitals we're not looking at that are we no we're not if we if we are looking at cost and we do actually want to support our local supply chain community wealth building there are products out there that are manufactured are available on the high street part of the issue is that the nutritional guidelines at schools in this case have to follow are too rigid too strict there's no flexibility so that bread that was no longer available they can't the school can't just go down the high street and get something from the local as does or get the wholesaler to put in an alternative you can't sub anything you get your local delivery from your supermarket you get an automatic sub might not be exactly what you want but it's a subject at least you've got it can't do that with any of these contracts so the schools then have to go without the kids then have to go without because nutritional guidelines that came in in 2020 are too rigid if we actually look at them as a starting point flex them adjust them or at least say to the schools look there is flexibility if the crap happens you know if pizza is no longer available actually you can bring in one that's similar might not have the same nutritional content but you can bring in an alternative that actually then starts to unlock some of the product that is available in the market even just aligning aligning with some of the school the English school meal regulations would unlock some of local the food available in Scotland or most perfectly maybe the UK because there's misaligning there there's UK producers making product for schools in England but they don't make the regulatory requirements for Scotland so they can't even be brought so there is a pizza in the English schools but can't come into Scotland the um vanilla Maggie Chapman in just now she had some questions around price and waiting and once as you started that theme I'll let Maggie pick it up and I can come back to you once Maggie's had some questions thanks very much clen good morning to the panel thank you thank you for what you've said so far this morning I suppose following up from that and it's that tension between price sustainability and the and the different waiting with the sustainable procurement duty is there is there a mechanism is there a way that longer term value or longer term outcomes can be can be incorporated or as it stands is it just this is the value now this is the waiting now we can't actually we either don't collect we can't collect data or we can't project forward and I just wanted to Colin you talking about alternatives if we had if we took a longer term look say you know over five years are you getting these outcomes would that would that help balance some of that do you think I think we need to look at what that five-year projection looks like and in fact you know we're looking at everything in a five-year or a 10-year actually to get where we want to be in terms of the health of the people and the everything that we're trying to it's actually probably going to be a generation before we actually see that real difference but if we can actually look at getting industry involved and what's available what is going to be required then we can start and build the metrics around what you're asking Maggie because the concern is that we say right this is what we need now going forward with actually working out how you're going to get there we're going to be in the same boat again but just with further regulation you know because my concern is that we're suddenly saying well actually you can't bring anything in that's got a carbon footprint of x you know when we started looking at carbon accounting because that actually adds more more cost and disincentive for small producers who won't be able to give you that data and that goes back to when we're looking at good food nation but let's not be too prescriptive at the very start because it is a worry that you know we start to put more regulation top of regulation. Stacey do you want to comment on that? Yeah again and I've mentioned that a couple of times before but I'd expected that something we'd be looking at through when we get into the community wealth building legislation. The only thing that I would say is obviously I've kind of highlighted how much regulation compliance our members are having to deal with so I think a key part to that is going to be actually honing in and it's very easy to fall into that trap of just collecting information for information's sake. We have to be very clear on why we are collecting information and businesses need to understand why that's been collected rather than just becoming another checklist for them and they are not seeing the benefit of disinformation being collected. I've got another question on that but it takes us off in another on another tangent. If I can just follow up on that then Stacey, one of the questions I had was around the sort of broader social benefits that we're supposed to get from these procurement changes improvements with the focus on reducing inequality and I'm wondering when we're talking about collecting information do we understand, do we government, you know, whoever, do we actually collect data in terms of who, what contractors are doing, what subcontractors are doing and what their supply chains, do we actually, do we know in terms of either environmental impact, social impact and that reducing inequality focus are we collecting the right data and if not who's responsibility, who can kind of bring all of that together given what you say about the burden of bureaucracy, the burden of all of the administration of all of this. So I would say I've not heard this from members of my role at FSB, this is my previous experience. Community benefits can sometimes be kind of something that's done at the end to the kind of tick box exercise and it's not actually demonstrable that it's had an impact on that, you know, it's like did we go out to school and do in our session with some pupils, you know, good but you know that's not having the impact you're talking about so but again I would in my experience that's because councils don't have the adequate resources to properly contract manage that and you know when there is a prime subcontracting out they'll have the sometimes not so regular meetings with them to look at progress of the contract and you know with that kind of focus on price I would say things like community benefit clauses are maybe kind of further down the priority list in terms of the monitoring that they do sometimes. Okay and John earlier in your comments you've mentioned things like fair work and those kinds of things again are we do we understand what subcontractors and you know secondary contractors in a way that actually allows us to understand the genuine benefits or not of what we're trying to do. I think I would agree with what Stacey has said a lot of this is you know somebody's you know you're writing a bid and you think well what can we throw in there just to sort of trying up the scoring a little bit on some of that so some of it does feel a little bit tick box exercisey I think a lot of that information is perhaps being provided I know certainly in bids that I've been party to in a previous life before I joined the chamber of commerce that information was always provided what is done with it once it gets to a contracting authority how it's collated how it's analysed and then how it's monitored going forward don't know and so it's certainly asked for which is one of the reasons why we've got the administrative burden that we've all discussed it's certainly asked for it's certainly provided it's used in the scoring mechanism but then it's what is done with it once it gets it gets to to that point and I think the other thing just to I mean we're completely you know we completely understand the fear work piece and living wage and sustainability and all that you know that's absolutely crucial and we completely understand that but we have had some feedback on sometimes the proportionate nature of some of those requirements in relation to everything else that's being asked particularly of smaller organisations and micro businesses at the lower end of the scale and on bids which are just above the £50,000 threshold so therefore they are they are by nature smaller bids I guess the feedback is that sometimes those requests don't feel proportionate it feels perhaps like they're just their request is made of all bids are respective of size and scale and actually if it's a smaller bid at the smaller end of the scale that still will attract smaller businesses to apply that a proportionality of that request should be something that's taken into account because very often it's just not going to be commercially viable for some of these businesses to put some community wealth building elements into a very low value contract for example the fact that it's being potentially awarded to a smaller micro business is in itself you could argue some sort of form of community benefit so I think that proportionality piece is something that's been fed back to us before so are we missing a trick really with especially given you know given the urgency with which certain issues we all need to tackle it's no single authority or agency's responsibility issues like you know reducing inequality like dealing with the climate emergency are there issues that we are missing there because we're actually we're not only asking for the wrong information or too much of certain types of information but we're not we're not allowing that the waiting flexibility as well so I mean and we've talked about the 75 percent threshold what would you say actually that's what needs to change if we to see some of the some of the environmental climate emergency you know reducing inequality targets be much more meaningful I think I think certainly that that in terms of on a whole whole sale not sure if that would be the answer necessarily but certainly perhaps on a on a case by case basis or a commissioning authority by commissioning authority basis potentially that that that would be more manageable I think that one of the things that we always get fed back as well as on fair work it tends to focus on living wage but there are a lot of employers out there who are doing lots of other things that actually do equate to additional money in people's pockets perhaps not directly through wage and salary but through things like childcare support flexible working all those other things so I think I think some of the definitions within definitions if that makes sense need to be flexed a little to take into account a lot of the other things that a lot of organisations are doing that perhaps don't strictly meet that criteria as it stands at the moment so things like that I think there's definitely room for more more engagement on that and when you say more engagement with whom what what should we what should we as a commission recommend I guess I guess with suppliers in terms of an understanding of and again perhaps if there is that collecting of that information that we know is being provided and something is done with that information in terms of analysis that might help to give to give some of that insight but I think that engaging with suppliers or potential suppliers really understanding what it is that they're doing in terms of some of the additional benefits that they're providing or the additional work that they might be engaged on and somehow making sure that that is taken into consideration in the selection. Thanks Colin if I can come back to you because the questions moved on are there any other things you want to say in response to? Certainly that auditing piece is absolutely agree with that that you know it has a lot of it has become a tick box exercise just for tick box exercise that you know that they're appeasing the the strategy or the what's being asked of them actually means nothing so there is no auditing and that might be something that look if we're looking to review to do a review of and I mentioned about a two stage process maybe that second stage is actually an auditing of the paperwork and actually is the person that's tendering actually able to deliver on you know what they're saying they can do and just on I think there's also a confusion within the local authorities themselves and not actually understanding what they're asking and not following up on the review of their tender because going back to your social benefits piece one of my members one a tender part of that tender process was that they had to give annually funding it's one of the largest councils in Scotland funding towards kids activities or something like that that was fine the one the tender that money is still sitting in my members bank account two and a half years later and the council are going oh what don't know what had that been my final question but i'm a bit mr riddle did you wish to ask another question because because Collins misses up to me quite soon and just just just one more if I could convener thank you i mean i have to question the nutritional value of the rules and regulations whether they've improved the nutritional value of food in schools but one of the things you alluded to earlier on is the difference between procuring an IT system you know which is one supplier supplying tens of millions of pounds worth of a service and for your members who are you know individual food producers who have to go through you know processing of that food and you know with sending it away or whatever and we've had lots of legislation since 2014 around procurement but actually i'm not convinced it's improved anything so does the current framework allow for the difference between that kind of procurement sort of the big IT procurement stuff and and multiple you know suppliers because i think again back to the my original one around i think food food procurement specifically from a local authority perspective it's just easier to have a single point rather than procure lots of local different produce it can be done we've seen it being done in local authorities but is that is that something that the current framework you know we struggle with yes i'd certainly say that you would do struggle with it and you know the additional legislation that's come in i'm not specifically know what you're referring to but it is there has been a there is a bureaucratic system that just adds further complexity and burden and i think it goes back to the fact that you know when we're looking at these tenders you are now in a handful of of suppliers into the local authority today compared to you know 10 years and indeed what it could be or should be we've got 75 wholesale food and drink distributors across scotland but there's only a handful supplying into the public sector i think that that says it all that it is too restrictive it doesn't do what we want it to do and yes put in you know computers a computer yeah foods food but actually you're buying one computer but you're you're talking about there's 450 products that are currently sitting on the the food framework and through through our members it's not one food item it's 450 and in fact there's probably more than that 300 are core the other 150 are to allow for the regional regional variations to allow those 1200 adapted menus for the school you know that was just in fit the you know taside three council contracts you've got another 29 councils having to adapt their food menus to to accommodate the children the allergies the you know the neurodiversity and food and anything it's complex it really is complex and actually putting it into the hands of having one supplier doing it all might be the answer but it's not going to achieve anything that we're wanting to do in local community wealth building local jobs employment food security that's not going to be achieved in the hands of one person thank you my last question is really i suppose given given that we're looking at at the this act 10 years on what are the things that we would want to see given that the world's a very different place now than it was in in 2014 how in your view do you think we could use procurement to tackle things like the gendered nature of different employment sectors or the inaccessibility of different sectors for disabled people whether as workers or as suppliers are the things that we could and should be looking at to to to actually make make this legislation deliver the things we want we want for Scotland as a whole i don't know directly if you want to keep this off i mean yes there are there's a short answer to the to the question and i think one of the things that including requirements around sustainability and fair work and community benefits has done is it's really shone a light on those concepts and so a lot more businesses now are a lot more aware of them perhaps than they would have been and are you know our you know want want to comply with the requirements of those of those commitments i think though again i would i would caution and we've talked about this a lot in terms of adding those further levels of bureaucracy i think it has to be proportionate it has to be considered and i think i think if it's used if it's mandated and potentially used as a stick then all it's going to do is not encourage or or or dissuade more people particularly smaller businesses from from becoming part of of those procurement relationships so i think i think yes is the answer but i think that it should be done very very carefully and in a very considered way in consultation with the sector and and done in a way that it doesn't hinder people from from participating in the process okay okay thanks Colin Anner you have to leave so i'll come to you next i mean yeah i don't think i've got much more to add i mean certainly i think i would hate to see more burdens on the requirement of businesses when we actually are doing everything that we can i mean certainly within our sector it's very much about you know looking at gender equality and neurodiversity etc and that forms through our training academy to make sure that certainly our sector is doing all it can to support um as wide a diverse workforce as possible but the concern is that we then make it too prescriptive and then you're prejudicing one over another if you're if one's not doing enough but actually in that area there isn't the employees we're talking about yeah it's a complex mind for you okay okay no thank you i do apologize yeah no i say obviously i've talked quite a lot about businesses being put off we certainly don't want to put them off anymore and i completely agree with what joanne said and i would say you know obviously i just mentioned that the community benefit clauses has become in a tick box but we don't want to be creating a whole list of other ones for it's just tick boxes so you definitely that is something to learn from the community benefit clauses okay thanks thank you uh mr smith you let us know in advance that you have to leave so um thank you for attending this morning um if i come to uh stacey and joanne just a couple of questions maggie Chapman raised a gendered perspective on business do you as organisations collect an information on whether procurement is supporting women owned businesses is it something that or do you see it as being part of the procurement process um stacey welcome to you i mentioned the survey that we did this time last year our big small business survey so all the results that we um got through that survey can be broken down by gender it'd be interesting to share with the committee if uh if people would like to we've not published that breakdown but happy to share it with the committee and joanne is it something because i know that in edinburgh they have i think you mentioned in edinburgh they have a subgroup that's focused on um sms supporting them to access contracts i think at the beginning of the evidence session you talked about i think it was pop-up sessions to encourage um your members to look at procurement is there anything within that work that is focused on women owned businesses um not specifically within that work obviously we do do a lot of work around um encouraging women into business and supporting women who are already in business and women entrepreneurs so there's a stand of work that looks that looks at that um but um there isn't anything specifically to try to encourage women owned businesses to engage with the procurement piece um it's more about women in business more generally engaging in business and and taking up entrepreneurial opportunities and using all the skills that they bring to that so there's nothing specific around that no okay thank you and um stacey can i just ask when you talked about fife and clackmannan and the increases they had in local procurement was it in because i've had quite a long discussion this morning about food uh but where was the increases in particular sectors or services that those authorities delivered that's not available at same improving service data so they only publish okay that brings us to the end of the evidence session this morning thank you to the witnesses for attending i'll now move into private session