3. Statement by the Minister for Economy: The Foundational Economy

Part of the debate – in the Senedd at 3:12 pm on 9 November 2021.

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Photo of Vaughan Gething Vaughan Gething Labour 3:12, 9 November 2021

Thank you for the series of questions. I'll start with your point about the challenge fund and the assessment. Fifty-two projects were supported, 47 of those completed at March, and the assessment of those has helped to inform the activity we're now moving forward with as well. There's also, though, plenty to learn from the community of practice internally, which Cynnal Cymru have helped to run for us, and I'll certainly consider whether it would make sense to publish something, perhaps a written statement, providing more information on what we've learned from the challenge fund and to set out more clearly how that's helped to inform the backing local firms fund, which will take forward much of the learning from the initial challenge fund phase, which of course came from a previous budget agreement.

I think you asked later on about food as a sector, and it's something that I've already made choices on, investing in the food sector, not just in west Wales but right across Wales. It's one of the positive advantages that I see for the future of the Welsh economy and people's continuing understanding of where produce comes from and how we then use it. I actually think there's a big opportunity to persuade more people to make use of Welsh food in their own choices, as well as frankly other public procurement choices that I've mentioned as well. So, as I said, food, the retrofit programme and social care are the three areas we're initially targeting the backing local firms fund on, to try to take forward some of the lessons on how we understand what looking at the wider question of social value is. So, it's not simply about the price, but it's the value of what we do when we're spending public money. I do expect that we'll learn more from this next stage as we then continue to roll this forward. And, in many ways, the backing local firms fund, from an external point of view, is probably easier to understand than the foundational economy. It is exactly what it says on the tin: back local firms for them to be successful, to gain more from public procurement, to actually the help that will provide in terms of local jobs, but also that broader point about our impact on the wider world. 

And on the NHS, which again is another—. And I see this from the perspective of being the health Minister, and again within the foundational economy and looking again at local procurement, and now in my current role. The health Minister and I have already issued a written statement on a foundational economy approach within the NHS, so I think it's really encouraging that, within six months, more than £11 million has been spent with Welsh firms who weren't previously engaged and delivering work from NHS procurement. So, that's a really positive step, and I expect us to be able to do more in that space progressively in the future. I know the now Deputy Minister for Climate Change regularly made the point internally within the Government, as well as externally, about how and where you get the money spent on food contracts within the NHS, but much more widely, and where that supply is coming from. So, there is more work that I think we can do, not just in food but a wide range of other areas too. And that will involve monitoring and understanding success and, again, making sure that the lessons from that are rolled out.

I think this goes through to your point about a foundational economy lens, so there are a number of things we're doing. We have a community wealth-building approach in Gwent that takes on board lessons from Preston and others, and our external partners in the Centre for Local Economic Strategies, otherwise known as CLES. That is looking at community wealth building across Gwent, but it definitely includes the NHS, so Aneurin Bevan health board are very much involved in that in looking to understand what we could do better and their understanding of their impact within their local economy and the communities in which they not just provide services but spend lots and lots of public money.

That will also include us looking again at the business support we provide—both the support that Business Wales provides, but when we're talking about the backing local firms fund, some of that will be about business advice for those businesses. So, we're looking to see how we can help them to understand how they can get through the gate and be more successful in procurement in its widest sense. You talked a bit about Welsh Government assets—these aren't just physical assets, of course; I think one of our biggest levers is what we're prepared to do progressively with procurement and our understanding of what we expect people to do, in both direct Welsh Government, but more broadly across the public sector.

I'll consider his point with interest about COVID-19 and its impact on the foundational economy and how that might and might not be, but I'm thinking more clearly about how the business restrictions that we've had have had an impact, and then the success of the interventions we've provided more generally. There is work ongoing on that, but I'm thinking more broadly about the recovery, and how we make sure that the foundational economy actually grows—not just survives, but grows the sector with better paid jobs and better conditions for local firms and local businesses.