ALTHOUGH spend through the National Procurement Service (NPS) is increasing, it has not developed as quickly as expected resulting in concerns over its funding and less than anticipated savings.
A report from the Wales Audit Office has also suggested that some public bodies think the NPS is too close to the Welsh Government.
Public bodies spent £234 million through the NPS in 2016-17, but this was well short of previous estimates, a report by the Auditor General for Wales has said.
Although spend through its procurement arrangements has increased year-on-year since its inception in 2013, public bodies are not using the NPS as much as anticipated. Of the £234 million spent through NPS in 2016-17, the 73 member organisations spent £222 million. NPS’s 2015 business plan had targeted a figure of £2.2 billion.
Until the end of 2015-16, a £5.9 million Welsh Government ‘Invest-to Save’ loan covered most of NPS’s operating costs. The Welsh Government expected that NPS would then start repaying the loan from surplus income generated by a supplier rebate. However, the rebate generated only £0.9 million in 2016-17 compared with operating costs of £2.8 million. Although there are signs of income increasing in 2017-18, NPS is still not expecting to cover its costs. The Welsh Government has used its reserves to meet the shortfall.
As at August 2017, NPS has reported savings for public bodies of £14.8 million for 2016-17 as well as wider benefits to the economy such as job creation and direct spend with Welsh suppliers. While the reported savings have increased year-on-year, the figures have been substantially lower than some early estimates.
The report also found that some public bodies have been concerned that the NPS is not sufficiently independent from the Welsh Government and that its focus is towards national issues rather than local priorities.
The report makes five recommendations on issues including:
- identifying why public bodies are not using NPS as much as anticipated;
- clarifying the process for members opting-out of using NPS procurement arrangements; and
- agreeing a sustainable funding mechanism for the NPS.
Huw Vaughan Thomas said today “There is still broad in-principle support for the NPS, but it is vital that public bodies have confidence in it and it is clear that previous expectations about the growth of the NPS are a long way from being met. The NPS needs to do more to identify and address the reasons why public bodies choose not to use its procurement arrangements and to convince public bodies of the benefits.”
The Chair of the National Assembly’s Public Accounts Committee, Nick Ramsay AM, said: “The National Procurement Service (NPS) has an important role to play in getting a better deal for public bodies for their goods and services and in delivering the Welsh Government’s wider procurement policy objectives.
“The Auditor General’s report makes clear that the NPS is falling well short of what appears in hindsight to have been over-optimistic expectations about the amount of public spending that it would be able to influence, at least in its early years.
“The report raises some broader questions about public bodies’ commitment to collaborative purchasing and about the balance between national and local priorities, and the overall governance of the NPS.
“The Committee will be considering this report about the NPS alongside the Auditor General’s wider report on Public Procurement in Wales, published last month.”
Kwarteng gambles on rush for growth
CHANCELLOR of the Exchequer Kwasi Kwarteng unveiled his and Liz Truss’s economic vision for the UK on Friday morning.
The headlines are straightforward.
There will be £45bn in tax cuts by 2027; however, the largest cuts – national insurance cuts, the abolition of the cap on bonuses and the highest income tax rate- benefit only high earners.
Cut in the basic rate of income tax to 19% from April 2023;
National Insurance will not rise as scheduled, and the Government will reverse the current year rise as of November 6;
New Health and Social Care Levy to pay for the NHS will not be introduced;
The top rate of income tax was cut from 45% to 40%;
Cancel the rise in corporation tax which was due to increase from 19% to 25% in April 2023;
Rules around universal credit tightened by reducing benefits if people don’t fulfil job search commitments;
VAT-free shopping for overseas visitors;
End of the cap on bankers’ bonuses;
Planned increases in the duties on beer, cider, wine, and spirits cancelled;
Government to discuss setting up investment zones with 38 local areas in England.
Alongside the above, the Chancellor announced plans to remove environmental safeguards for building developments and reduce the regulatory burden on financial institutions.
KWARTENG LEAVES LABOUR AN OPEN GOAL
In an interview with Rishi Sunak during the Conservative leadership contest, Nick Robinson observed that it would be a nasty surprise for the former Chancellor when he found out who’d been in power for the last twelve years.
Kwasi Kwarteng followed Liz Truss’s preferred method of operation: he pretended they hadn’t happened.
The Chancellor comprehensively dumped on the policies pursued over the last dozen years by successive Conservative governments, for a decade of which Liz Truss has been a member.
His statement was, as one ministerial colleague said, “a game changer”, although perhaps not in the way he envisaged.
So complete was the change of economic policy that it leaves an open question about how Mr Kwarteng and his Cabinet colleagues ended up in the same political party as most of their backbench colleagues and served under the last three Conservative leaders.
Shadow Chancellor Rachel Reeves did not miss the open goal. Even as Mr Kwarteng and Ms Truss shook their heads on the government benches, she hammered home that the Chancellor’s statement was an admission the record of Conservative governments since 2010 was one of a failure to deliver growth or a viable economic plan.
THE SUPPLY SIDE FIX
The Chancellor and Prime Minister’s rationale is that cutting taxes for the already well-off will benefit all citizens as they are incentivised to invest and act in entrepreneurial ways. In addition, reducing regulation for businesses will encourage increased commercial enterprise.
They believe the growth stimulated will make up for any loss in tax revenues as increased economic activity, encouraged by lower taxes, leads to increased government revenues.
That approach is called supply-side economics, which focuses on increasing the supply of goods and services through growth.
In every developed nation where the Government’s brand of economics has been tried, two things have happened: a cataclysmic bust has followed a short-term burst of economic activity.
In addition, wealth inequalities – and the UK is already grossly unequal – are embedded and made worse.
Low taxes on the wealthiest do not distinguish between those who generate wealth through their industry or create economic activity through business investment and those who inherit wealth or sit on capital without producing anything.
“THE RICH WILL REJOICE”
Wales’s Finance Minister, Rebecca Evans MS, responded: “Rebecca Evans, Minister for Finance and Local Government, said: “Instead of delivering meaningful, targeted support to those who need help the most, the Chancellor prioritises funding for tax cuts for the rich, unlimited bonuses for bankers, and protecting the profits of big energy companies.
“Instead of increasing funding for public services in line with inflation, we get a Chancellor blithely ignoring stretched budgets as public services find their money is not going as far as it did before.”
Plaid Regional MS Cefin Campbell said: “This Budget will see the rich rejoice as their bonuses rocket and their tax bill sliced, once again it will be the poorest and most vulnerable bearing the brunt of the disastrous cost of living crisis.”
Plaid Cymru’s Treasury spokesperson, Ben Lake MP, added: “Tax cuts for the super-rich will do absolutely nothing to drive growth in the Welsh economy.
“I urge the UK Government to recognise that our Government in Wales must be given the fiscal tools to unlock our economic potential ourselves. That is the only way to improve the lives of people across Wales.”
Welsh Conservative Shadow Minister for Finance, Peter Fox MS, said: “Today shows that the UK Conservative Government has a comprehensive plan to provide a sharp boost to the economy by putting cash back into people’s pockets. Labour in Wales has the power to cut taxes in Wales but chooses not to.
“Mark Drakeford needs to take a leaf out of Liz Truss’ book and take immediate action to support hard-working people and struggling businesses, stimulating the Welsh economy rather than stifling it.”
Scott Corfe, Research Director at Social Market Foundation, said: “The Chancellor is taking a very high-risk gamble with the economy.
“If his package of enormous tax cuts and ‘supply side reforms’ fails to translate into significantly higher economic growth, we risk further falls in the pound and surging gilt yields as investors lose confidence in our ability to pay our way in the world.
“That, in turn, means higher inflation, an unsustainable trajectory for the public finances and steeper interest rate rises – potentially deepening rather than alleviating the cost of living crisis.”
Liz Truss confirmed as the new Prime Minister
LIZ TRUSS was confirmed as the new leader of the Conservative Party on Monday, September 5.
The widely-tipped victory saw Ms Truss capture 80,000 out of 140,000 votes from Conservative members.
Her margin of victory, 57% to 43%, is comfortable but nowhere near the levels suggested earlier in the campaign.
In her first speech, she claimed she would fulfil the pledges made in the Party’s 2019 election manifesto and praised her predecessor, the disgraced Boris Johnson, for getting Brexit done.
“Leave cannot name one country we would get a better trade deal with if we left the EU.”
At least Liz Truss’s six-year-old prediction about the benefits of Brexit came true.
It also highlights her remarkable capacity to rewrite her past and her fellow Conservatives’ collective amnesia about her.
Liz Truss comes from a comfortable middle-class background.
Her father is an emeritus professor of pure mathematics at the University of Leeds, while her mother was a nurse, teacher, and member of the Campaign for Nuclear Disarmament.
Liz Truss describes her parents as “to the left of Labour.”
She attended the highly-rated Roundhay School in one of Leeds’s more pleasant suburbs. She went to Oxford University to study Politics, Philosophy, and Economics.
She graduated in 1996.
During her time at University, she became President of its Liberal Democrat Society and, in 1994, spoke in favour of the monarchy’s abolition at the Party’s national conference and supported the legalisation of cannabis.
After graduating in 1996, she joined the Conservative Party and promoted the value of mathematics teaching to all students in full-time education.
After entering Parliament in 2010, in 2012, she became a junior minister in David Cameron’s government.
After making an impact in her role in the Department of Education, she got a big promotion to the position of Environment Secretary. In that role, she accepted climate change was happening and promoted the end of pesticides that harmed bee populations.
She reversed her positions within a year, backing the lifting of a ban on such pesticides and ending subsidies supporting the extension of solar energy.
During the Referendum campaign of 2016, she was an ardent Remainer, saying: “I am backing remain as I believe it is in Britain’s economic interest and means we can focus on vital economic and social reform at home.”
She also said: “After the 2016 Referendum, she underwent a dramatic conversion to become an ardent Brexiteer – again blown by the prevailing wind in a direction that would further her career ambitions.”
As a disastrous Justice Secretary, she undermined the independence of the judiciary and oversaw a large increase in violence in prisons.
As a reward, she was shunted to the position of Chief Secretary to the Treasury. After backing Boris Johnson in 2019, she became International Trade Secretary. During that time, she signed trade agreements with the UK’s trading partners on strikingly worse terms than the UK had during its EU membership. She also became the UK’s chief negotiator with the EU and rapidly ran those negotiations into the sand.
From radical Liberal Democrat to right-wing Conservative; from ardent Remainer to enthusiastic Brexiteer; the only constants in Liz Truss’s political views have been her views on individual liberty and the pursuit of career advancement.
A strong supporter of David Cameron; a stalwart of Theresa May’s cabinet; a fervent early adopter of the Boris Johnson cult; Liz Truss will be the UK’s fourth Prime Minister in six years and the third in a row who has risen to the post without facing a General Election.
Her inbox would be extraordinarily challenging, even for someone widely regarded as almost as intellectually negligible and facile as her predecessor.
Liz Truss doesn’t have time to build a brand or establish her authority.
She must hit the ground running with fresh ideas to tackle the UK’s massive economic challenges, the fallout from a shambolic Brexit deal agreed by her predecessor, the cost-of-living crisis, the energy crisis, spiralling inflation, the possibility of a recession, Russia’s war in Ukraine, and delivering all the promises on tax cuts she made during the leadership campaign.
Most importantly, she must signal a clear break with the sleaze, patronage, and low standards of public life that forced Boris Johnson and compelled almost his entire ministerial team to quit when the stench of scandal became too much for them.
Against that background, survival to 2024 and beyond will be a massive achievement.
POLITICAL VOICES FROM WALES ON NEW PM
Welsh Conservative leader Andrew RT Davies MS said: “I am delighted that Liz has been elected party leader and will be our next Prime Minister, especially having backed her during the contest.
“Throughout her political career and this contest, we have seen someone with the tenacity, ideas, and stoicism required to lead the Conservatives into the next election and the country through a difficult period.
“There is a lot of work to be getting on with, especially in tackling the cost-of-living crisis, and I look forward to seeing Liz’s ideas put into action to alleviate the struggle millions are facing.
“It is now time to unite behind our new leader, and further build on our record of delivering for Wales and the wider United Kingdom.”
Predictably, Labour in Wales are not happy.
Labour’s Shadow Secretary of State for Wales Jo Stevens told this newspaper: “Liz Truss has her fingerprints all over the crime scene of the past 12 years of Tory failure. She reliably parroted Boris Johnson’s lies and voted for the 15 tax rises the Tories have imposed in the last two years. At every turn, she’s shown people she can’t be trusted.
“Households right across Wales needed action from the Tory Government to tackle their cost of living catastrophe months ago. Nearly nine weeks on from the start of her leadership campaign, Truss still has no plan and no ideas to address the crisis people and businesses are dealing with.”
Carmarthen West and South Pembrokeshire MS Samuel Kurtz has congratulated the country’s next Prime Minister
Commenting on the news, Samuel Kurtz MS told The Herald: “Congratulations to Liz Truss for securing this victory. Whilst I supported Rishi Sunak, the Conservative Party has always had a wealth of talented individuals, and Liz is certainly one.
“The Party must now come together behind our new PM.
“We have some real challenges ahead of us – both abroad and at home – which the incoming Prime Minister must get to grips with. I have faith that Liz Truss has the ability to support the public as we navigate the oncoming winter.
“As we move forward, my priority is ensuring that the communities I represent get the assistance and support they need as we enter these challenging months ahead.
“I’ll be working with my colleagues in Westminster to ensure that support reaches every household in West Wales.”
Welsh Liberal Democrat Leader Jane Dodds MS said: “Under Liz Truss we are set to see more of the chaos that we saw under Boris Johnson. From failing to deal with the cost-of-living emergency, to letting small and medium businesses face the winter alone, to failing to deal with the climate crisis, the Conservatives have shown they don’t care, have no plan and have failed our country.
“The Conservatives may have changed leader, but after twelve years in power at Westminster the Conservatives have shown they are out of ideas, out of energy and out of touch.
“First the government needs to urgently scrap October’s energy price rise to avoid a social catastrophe for families and pensioners this winter. Then we need a general election, to get the Conservatives out of power and deliver the real change Wales needs.”
National 20mph limit comes into force in Wales next year
WALES will be the first UK nation to impose a 20mph default speed limit following a vote held in the Senedd yesterday (July 12). The Welsh Government voted to limit residential roads and busy pedestrian streets to 20mph.
According to the Welsh Government, this will lessen the likelihood and severity of accidents involving vulnerable road users. It will also encourage more people to cycle and walk.
39 members of the Senedd voted in favour, while 15 members voted against.
The new national default speed limit will come into effect from September 2023. The Welsh Government say the changes affect residential roads and busy pedestrian streets.
According to the Welsh Government, the modifications have an impact on major pedestrian routes and residential roadways. The Welsh Government is still deciding which highways will have 20mph speed restrictions and which ones should stay at 30mph.
The 22 councils in Wales will collaborate with Go Safe to determine implementation timelines, according to the Welsh Government, but enforcement will continue throughout the transition period.
Climate change minister, Julie James, stated: “The future of our towns and cities depends on our ability to move around sustainably and on solutions that have a positive impact on public health environment and communities.
“That is why we will use the principle that walking, cycling and active travel must remain the best options for short urban journeys and a 20mph default speed limit will help achieve this. The introduction of a national 20mph limit would be an important and far reaching policy. If passed Wales would be the first country in the UK to introduce the change. We’re asking you all to be part of this change and make our communities understand the wider benefits of 20mph.
“This change is a generational one and when the time to embed, it will need to be accompanied by an important communication and marketing campaign and behaviour change initiatives. Achieving behavioural change is challenging but Wales has previously shown that we can do it successfully with policies such as organ donation, the banning of smoking in public places, and limiting the use of plastic bags. It does, however, require a collaborative effort between agencies, local authorities and by communities. We need to bring speeds down.”
She continued, saying there is evidence that 20 mph speed limits encourage more people to bike or walk, and she hoped this would lead to people naturally choosing those modes of transportation.
According to Ms. James, 80 people die on Welsh roads on average each year, and current data shows that 30mph is the speed at which 53 percent of accidents occur.
The immediate cost is about £33 million, but according to the Welsh Government, increased road safety brought on by slower average speeds could generate a positive financial return of about £25 million over the course of 30 years due to the money saved on fewer emergency services and hospital visits.
Additionally, the policy might result in significant wider economic gains from increased road safety (£1.4 billion), environmental and health gains from increased active travel (£5 million), and additional unquantified benefits from more vibrant and connected local economies.
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