Emer Higgins (Dublin Mid West, Fine Gael)

I did not know it was for an entire week. Thank God it is Thursday.

I welcome the opportunity to address Seanad Éireann and to share with Senators my vision and my ambition for public procurement. Public procurement is a key priority of our Department and is vital to ensuring we deliver better public services for all of those living here in Ireland. I thank Senator Kyne for the invitation to address the House and to have this discussion, and I thank all the Senators here for giving their time to share with me their views on public procurement.

As Minister of State with responsibility for public procurement, digitalisation and egovernment, I wish to set out some of the key initiatives my Department officials and I are working on in these areas. As everyone in this room knows, public procurement is a fundamental, crucial component of democratic governance, economic well-being and sustainable development. From building roads and power stations to purchasing pharmaceuticals and securing waste collection services, efficient use of public resources contributes to better delivery of services for our citizens.Public procurement also serves as a significant policy instrument, which governments can use to propel changes in public service delivery, create jobs and stimulate private sector growth. A well-performing public procurement system increases citizens' confidence in government and private sector competitiveness, especially when it comes to levelling the playing field for small- and medium-sized businesses, including micro-enterprises, startups and social enterprises. That is why I intend to bring to Government for approval Ireland's first ever overarching national public procurement strategy. This will set out the future direction of public procurement for the next five years. This strategy will require a whole-of-government approach both to its development and its implementation. Consultation and collaboration are central to ensuring we are developing a strategy that works for everyone involved.

With that in mind, I launched a public consultation in March to ensure all those with an interest in the future direction of public procurement have an opportunity to inform this new strategy. The consultation included an online survey and three regional roadshows. The Minister, Deputy Chambers, opened the Dublin roadshow held on 12 May. I opened the Cork roadshow last Friday, 16 May. We plan to hold one in Athlone on 9 June. These roadshows provide an important opportunity for small businesses, startups, social enterprises, utilities and public buyers from across sectors to engage with one another to discuss the barriers and the opportunities in public procurement. I thank Senator Alice Mary Higgins for supporting this work and for hosting a webinar and inviting my officials to present at it. I welcome her interest and work in this space over the years, in particular the Senator's Private Members' Bill, Quality in Public Procurement (Contract Preparation and Award Criteria) Bill 2021. In parallel with the public consultation and our roadshows, my officials are holding bilateral meetings with all Departments and key agencies to explore opportunities to align public procurement policy with wider Government policy. This will be the first time that has happened. We will agree desired outcomes and actions and do that together.

Public procurement accounts for a large share of state spending. The EU calculates it as 15% to 19% of GDP. It can assist a state to deliver better public services and enable public money to be spent in an efficient and transparent, sustainable and strategic way. For many sectors such as energy, transport, waste management, social protection and the provision of health or education services, public authorities are the principal buyers. Given its scale, public procurement represents a significant opportunity for businesses of all sizes but particularly startups, emerging micro-enterprises and SMEs. I will come back to that shortly. Public procurement can also help to achieve wider societal, environmental and economic benefits. For example, a public body can use its procurement to stimulate employment, including among those disadvantaged groups who are underemployed. It can also promote innovation. It can support the growth of SMEs, including social enterprises, and progress government objectives in the areas of climate change and social inclusion in particular. That is why my Department will shortly publish an updated circular on green public procurement. That will set out the key actions in Buying Greener: Green Public Procurement Strategy and Action Plan 2024 to 2027. That is also why my officials continue to work so closely with the Environmental Protection Agency, EPA, and with the Department of the Environment, Climate and Communications on enhancing the green criteria search to keep up to date with EU and national policies.

The programme for Government identified developing Ireland's enterprise base as a key focus for this Government for the next five years. From backing small businesses and startups to scaling indigenous firms, it is important we support them. The role public procurement can play is emphasised by the Government's commitment to reviewing the public procurement process and working to ensure greater participation from SMEs, including micro-enterprises. Public procurement has significant potential to support SMEs and, with it, to support regional development and the wider economy. The award of a public contract can act as a springboard for emerging micro-enterprises and SMEs to expand and even to export.

I previously served as Minister of State with responsibility for business, employment and retail, so I am keenly aware of the challenges faced by Irish businesses, especially in these uncertain times. I am also aware of the growing network of social enterprises. They have the capacity to deliver a vast and an expanding range of goods and services. Awarding a contract to a social enterprise can maximise the societal impact of procurement spend. I am delighted that one of the foundational policy positions of the strategy is to make participation in public procurement easier for suppliers, particularly family businesses, SMEs and social enterprises.

Each year, billions of euro are spent by the State on goods, services and works. This brings obligations but it also brings opportunities. My Department will continue to work to ensure value for money is at the heart of all decision making. I am keen to use the strategy to explore new ways to promote efficient and effective public procurement that achieves the best possible value for money for the people, our citizens. By this I mean ensuring optimal use of resources, both human and financial. I mean on-time delivery, quality, value for money but also using public procurement to deliver wider societal economic and environmental impact. Each euro we spend on goods, services and works has the possibility to bring far-reaching societal and economic benefit.

Through the public services transformation strategy, my Department encourages public servants to embrace a culture of innovation and to ensure the best possible outcomes are achieved for Ireland. Through the new procurement strategy, I am keen to explore ways in which we can promote the use of innovation procurement as a strategic tool. Innovation procurement has the potential to support the delivery of transformational change by revolutionising the way we purchase goods and services while simultaneously shaping new markets, supporting startups and innovative SMEs, and supporting public bodies to overcome societal and environmental challenges.

It is a really exciting time for public procurement. Alongside work to develop Ireland's first national public procurement strategy, my Department is also developing a first digital strategy for public procurement. The digital strategy will provide direction for the digital transformation of public procurement in Ireland. It will set out a vision, enablers, strategic goals and desired outcomes for digital transformation. In parallel with the development of a national public procurement strategy and a digital strategy for public procurement, there is also a great deal going on in the EU space. The EU Commission is reviewing the existing legal framework governing public procurement. My Department is consulting at a national level to inform our engagement with the Commission as part of the evaluation of the procurement directives and negotiations on future legislation.

In framing our new national strategy, I am conscious of the need to reflect the developments at EU level with the requirements for a dynamic and effective public market system nationally. In harmony with public procurement policy, my Department is also responsible for fully leveraging the benefits of the State’s expenditure through the establishment of central procurement solutions. Central procurement solutions, and they are primarily framework agreements, are national level arrangements established by my Department. They are available for use by other Departments and State agencies. Central procurement is Government policy. It is designed to deliver better quality procurement solutions that meet the needs of the public service and better society. These procurement solutions established in my Department aggregate the State’s expenditure, deliver value for money and provide process efficiencies for both public buyers and suppliers as well as managing risk. In 2024, central solutions, with an estimated contract value of €4.2 billion, were established. Some €1.9 billion flowed through these central solutions, which is the highest ever annual usage recorded, with an estimated €65 million to €70 million in cost avoidance and savings.

Public sector bodies continue to see the advantages of using our Office of Government Procurement, OGP, central solutions. Central procurement solutions also provide support for the Government’s horizontal policy considerations, including such areas as green public procurement, the circular economy, SME access to public contracts and the inclusion of social considerations. My Department is responsible for 11 master categories of expenditure for commonly required goods and services that all Departments and agencies require in the course of their work, such as things we all use in our offices day to day. Across these categories the Department has established 95 central procurement arrangements. I will come back with some illustrations of these in my closing statement. I am conscious of time, so for now I will hand the floor over to Senators for their views, comments, suggestions and ideas.