Think tank Localis has released a new report that outlines how councils should make better use of their goods and services sending, to drive community prosperity.
The study, titled New Values: Local public contracts for networked social prosperity, has called on councils to use the new Procurement Act to support social prosperity through the use of their collective £72 billion spend on goods and services. Part of this could involve tailoring commercial contracts to the local economic needs.
Coming into force in February 2025, the new Procurement Act highlights the importance of the ‘most advantageous tender’ that will ensure that better value for money can deliver social prosperity and inclusive growth. As part of this, local authorities will be driven to optimise their procurement in a number of ways.
Considering this, Localis have recommended that councils should consider a new model that would see smaller authorities handing over their administrative responsibilities to arm’s-length delivery bodies, whilst delivery is outsourced to local agencies. These agencies could be Local Authority Trading Companies or members of the private and third sectors. Alongside this, local authorities are being encouraged to consider the use of delivery vehicles for the strategic assessment and control of public contracts.
Callin McLinden, Author of the report and Senior Researcher at Localis, said:
“With the enactment of the Procurement Act postponed repeatedly, many local authorities have been left in a state of limbo and would be right to wonder what the fuss has been about.
“The Procurement Act is set to reinvigorate an admittedly dense but promising legislative framework for procurement and local service contracts, carving out greater strategic potential for the buying process to deliver socially prosperous and publicly valuable outcomes – whether services are insourced, outsourced, or innovatively hybridised.
“However, whatever the ambitious approach or model taken, a lack of accountability, capacity gaps, and unfamiliarity with overtly complex legislation has stood in the way of and will continue to frustrate any efforts to ‘take back control’ of public services.
“This is why the government and local authorities must be equally mindful and mutually assured in transitioning towards a more strategic and socially prosperous use of public contracts.”
Further recommendations that have come in the report include:
- Conducting economic and social impact studies to better direct local strategic capacity
- Better clarity on legal definitions and scenarios under the new legislation
- Supporting a local government capacity building programme for procurement departments
Localis Chief Executive Jonathan Werran said:
“In opposition, the Labour Party promised, under the aegis of a National Procurement Plan that would mandate social value in public contracts, to strengthen public procurement so as to support local businesses and ensure contracts drive local economic development, sustainable growth and high employment standards.
“Now they are in Government, we can expect to see a strategic shift towards the wholesale integration of environmental, social and employment considerations.
“To deliver this shift at the level of place and guarantee communities and localities benefit fully from the current annual £72bn spend on local goods and services will require robust capacity building and training programmes to give council procurement teams the skills to navigate increased complexity and transparency.”
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