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Last Updated: Wednesday, 4 October 2006, 05:45 GMT 06:45 UK
'Buy Welsh' public bodies told
Mouse and computer
Computer equipment and support could be sourced from Wales
More than half of Welsh public money spent on goods and services goes to companies outside Wales, according to latest research.

The Value Wales study for the assembly government suggests 2bn is leaving the Welsh economy every year.

An all-party group at the assembly is to hear how Welsh firms can compete more effectively for the cash - on anything from apples to computers.

Business leaders say there is scope for boosting the use of Welsh produce.

The assembly government said it was improving, and that councils, schools and hospitals were buying a quarter of their food and drink from Welsh companies - a 6% increase over three years.

Some ministers are wary the "buy Welsh" policy may cause legal difficulties, as European laws demand open, free and fair competition within and between member states.

Councils and education authorities 53%
NHS 27%
Assembly government and bodies 13%
Higher education 5%
Further education 4%
Welsh public spending share. Source: Value Wales

The research is part of ongoing research by Value Wales, a division of the assembly government. Latest figures suggest that local government and schools account for more than half of public spending, followed by the NHS with just over a quarter.

But lawyers argue there are ways of increasing the number of contracts going to Welsh businesses.

Insisting on "fresh" produce - or including clauses which required a company to respond quickly to deal with problems - could favour local companies without breaking the law, legal experts believe.

The latest research by Value Wales - an agency within the assembly government - suggests between 45% and 49% of public contracts go to Welsh companies.

Public bodies in Wales spend between 4.5bn and 5bn a year - equivalent to a third of the assembly government's entire budget.

Half of this amount is lost to the Welsh economy each year.

The assembly government has estimated that for every 1% increase in spending within Wales, a further 2,000 jobs could be created.

The range of goods and services bought by public companies include carpets and furniture new roads and buildings, stationery, food and drink, and staff training.

"It's a great improvement on where we were"


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