Council leaders say the government needs to introduce a more efficient UK system regulating how councils buy goods and services when Britain leaves the EU.
The Local Government Association (LGA) said this could include giving councils greater ability to use local suppliers, specify a minimum local living wage for their suppliers’ employees, or specify additional social value so that companies awarded contracts can be asked to employ or train a number of local people.
Councils in England collectively spend £55 billion per year on goods, works and services.
The LGA’s call chimes with Unite’s demand that the UK’s public procurement budget, which is worth £268bn and 33 percent of total public spending, be used to help create a stable, internal market that supports domestic industry and provides decent well-paid work for communities.
Councils currently have to follow EU-wide advertising and award procedures when they buy goods and services. The process sometimes sits uneasily with supporting the local economy. The EU process can also take between three and 18 months – twice as long as typical private sector procurements.
The LGA says a “lighter-touch” system which simplifies this processes, and provides more flexibilities to promote local growth, is vital so that councils can procure to shorter timescales and lower high administration costs for businesses, especially small and medium-sized enterprises.
Cllr Kevin Bentley, Chairman of the LGA’s Brexit Task and Finish Group, said: “Regulation of public procurement will clearly continue to be necessary when we leave the EU to allow councils to continue to demonstrate best value for money and ensure effective and fair competition.
“But introducing more local flexibility and easier procurement rules after Brexit would provide more community benefits and more growth opportunities for SMEs. It would also allow councils to promote local suppliers and local labour and ensure workers earn a decent wage.”
Unite is calling for stronger positive procurement legislation as part of a comprehensive post-Brexit industrial strategy.
This would create a stable, internal market by recognising social value and using public spending to support UK manufacturing and services, and promote and advance equality, fairness and a sustainable environment.
The automotive industry is indicative of the current missed opportunity of public sector procurement. Data collected by Unite reveals that 74 percent of vehicles procured by public bodies in the UK are not produced in the UK.
Local authorities have the best statistics for the use of UK produced vehicles – 52 percent of council vehicles have been produced in the UK – while ambulance services have the worst, with 92 percent of vehicles used being produced abroad.
By changing EU procurement rules after Brexit to include an increased emphasis on social value and domestic supply chains, public services, job creation, pay and working conditions can be improved.