In today’s conditions, politics, development, and economy should derive from the central government as well as from local and regional administration. The objective of Kavala’s municipal development strategy is to strengthen its administrative, economic, social, and developmental role. A necessary condition for the exercise of this role is the reform of the procurement system as a result of an in depth analysis and a broader understanding of public procurement.
The city of Preston in the UK has developed a spend analysis good practice. The URBACT Project Making Spend Matter Transfer network will attempt to transfer, adopt and adapt the practice. In particular, the participating cities are Pamplona (Spain), Vila Nova De Famalicão (Portugal), Schaerbeek (Belgium), Kavala (Greece), Bistriţa (Romania) and Koszalin (Poland).
At the beginning of the process, the Municipality of Kavala, following the Preston’s spend analysis methodology, found that € 4,651,491 out of € 9,325,024 of public procurement spend for the financial year 2018 were spent in the local economy.
At the 3rd Transnational Meeting held in Bistriţa, Kavala focused on the advanced analysis of its public procurement spend and the development of a business database. The analysis looked at the financial benefits of public procurement in terms of employment and local supply chain with a total of 114 local public suppliers, representing a total value of € 4,110,751.00 for the year 2018. From an employment perspective, the results of the analysis showed that out of the 318 employees working for Kavala’s local public suppliers, 94% lived in Kavala and the remaining 6% lived in other areas of the country.
The supply chain analysis highlighted that in Kavala’s supply chain, 31% of suppliers are based in the city, and 69% are based in other areas of Greece.
With this research Kavala aimed to identify, through the supplier’s responses, how much of the procurement spend with its suppliers, reached companies and inhabitants of the city, looking at the local financial benefits by analyzing the proportion of contract value spent with staff and the supplier chain.
This analysis highlighted that by conducting public procurement with local organizations, the Municipality of Kavala strengthens local employment with a total amount of 1,054,359.00 € and, respectively, supports the local market with the amount of €995,532.00.
Through the spend analysis, Kavala managed to achieve a better understanding of how the public funds are circulated in the local economy as well as the economic impact that those funds have on employment and the supply chain. The research highlighted the need for cooperation with the local market to introduce policies and practices through public procurement for the benefit of local development. It shows that local suppliers providing goods and services for the Municipality can support the resilience of the local economy.
Undertaking public procurement spend analysis for Kavala is the starting point of a series of activities aiming to redesign procurement processes and practices to support community wealth and strengthen local resilience. The progress will include political leadership, supplier engagement and extensive consultation with local stakeholders to be strategically designed and operationally implemented.
In this way “Making Spend Matter” project allows Kavala to develop a strategy for strengthening economic, social, and environmental outcomes through public procurement.
Article by: Ioannis Chatzikonstantinou, Head of Kavala’s Finance Division, ULG Coordinator
