The purpose of today's motion, tabled by myself, Vikki Howells, Jenny Rathbone, Hefin David, Adam Price and David Melding is to look again at the central importance of this overlooked sector of the our economy. From the cross-party buy-in to this motion, it is clear that there is an appetite for a new approach.

With my colleague Jenny Rathbone, I recently visited Preston to learn more about their approach to what they call 'community wealth building'. Since the financial crisis, and the failure of a grand new shopping centre that they were relying on to boost Preston, and in the face of continuing austerity, the council have been forced to rethink their approach to economic development. Now, their definition of an anchor institution is profoundly different to ours. They use the term to describe institutions that are locally rooted and securely based—the local university, the FE college, the sixth-form college, the county council, the local housing association and the police force. Together these anchors spent £750 million a year on purchasing goods and services, but just 5 per cent of it in Preston, and less than 40 per cent in the wider Lancashire area. So some £458 million of public money was leaking out of the Lancashire economy every year.

As a result of their new approach to harnessing their foundational economy these local anchor institutions now use procurement to secure the best social value locally. By auditing the 300 most valuable contracts they each had, they've been able to redirect spend to local firms without impacting cost or quality. That's a crucial point. Now, 17 per cent of the spending by the local anchor institutions is retained within Preston—17 per cent, up from 5 per cent—and 79 per cent in the wider Lancashire economy, up from 39 per cent.

This has had demonstrable impact in Preston. An area that was once amongst the most deprived in England is now rising out of the depths. Where wages in most of the UK have been static for over a decade, in Preston they're increasing. And a big contribution to that has come from the local anchor institutions. Five of the six are now accredited living wage employers.

We need to be doing the same—identifying who are the major players in our local economies and asking them to do their bit. We must be clear to all these institutions across the public and private sectors that building up their local economies will provide them with a secure foundation and a lasting future. For housing associations, their rents paid; for the health service, lower demand on services caused by poverty; for the police force, reducing the causes of crime. In Wales, the public sector spends £5.5 billion every year buying in goods and services, and we could use that as a direct means of boosting our foundational economy.

This will require a new approach, an approach that is in keeping with the Well-being of Future Generations (Wales) Act 2015, which as point 3 of our motion points out, offers a significant opportunity to allow us to go even further than Preston. But to do it we need to make changes. Our public sector will need to be empowered to procure in a way that delivers far more than the lowest price. Local businesses will need increased support to deliver and bid on public sector contracts, and we’ll need to invest in higher skilled staff in local government with specialist purchasing skills to drive this change in our approach.

But the barriers to do these things are not as high as we've convinced ourselves that they are. The experience in Preston shows that European procurement rules are not the problem we tell ourselves they are. In fact, the leader of the council, Matthew Brown, and his senior officials told Jenny Rathbone and I that the reforms have been much easier to carry out than they'd anticipated. So point 2 of our motion calls on the Welsh Government to meet with Preston City Council to discuss the lessons that can be learnt.

They stressed to us that their approach is not one that should be applied uniformly. Different places have different solutions and different problems to be dealt with. For example, in Islington, where affordable work space is in short supply, the council have invested in bringing buildings back into community ownership to let micro and small-sized enterprises rent at below market rates. That's been their focus. In Greater Manchester, the pension fund has provided £50 million of lending and equity capital to small and medium-sized enterprises. That's what they identified was their main problem. In Scotland, Highlands and Islands Enterprise have been a leader in the development of community energy assets, providing investment in an area overlooked by traditional financing. 

Now, in Wales, we too have the kernel of a comprehensive approach. There are signs of a new attitude to purchasing. A review of the National Procurement Service presents an opportunity to move away from a focus on high-volume contracts for the lowest price. Our economic action plan commits us to supporting foundational sectors and we need to be clear about what we mean by this, and the extent to which it means jettisoning the old ways of working. But I was encouraged by what the Cabinet Secretary had to say about his plans for a cross-cutting foundational approach during his most recent appearance at the economy committee, and I hope we can hear more today.

But there is more to do. Point 4 of our motion calls on the Welsh Government to trial a range of different models of adult social care that recognises the importance of a localised foundational approach. Too often, people working in the sector are on low-paid, zero-hours contracts with no prospects of progression. Large firms are moving into the sector, and extracting significant profits for little return to care users and the public who fund them. Whilst we have given a £1 million to explore foundational approaches in social care, we give much larger sums of money to some of the worlds biggest companies to entice them to move or stay here, and we need to tip the scales, in social care and across our economy. 

What I learnt in Preston, Deputy Llywydd, above all else, was that their success is due to focused leadership and vision. It has been embedded in the working culture of their anchors and through the sustained effort of committed figureheads. A foundational approach to the economy can be our vision, and the Welsh Government can take the lead. The dawning reality of what Brexit will mean for our economy means we need to do this urgently. Diolch.