Local Councils Urged to Use New Procurement Act to Promote Social Prosperity
Councils in the UK are being encouraged to make better use of their collective annual £72bn spend on goods and services to promote community prosperity. This advice comes from a new report published today by the think-tank Localis.
The report, titled “New Values: local public contracts for networked social prosperity”, highlights the importance of the new Procurement Act, which will come into effect next February. The act aims to drive social prosperity by encouraging local authorities to tailor commercial contracts for neighborhood services to local economic needs. This could involve supporting small and medium enterprises (SMEs) and providing training pathways for residents.
The act, which prioritizes the “most advantageous tender”, aims to promote a wider concept of value for money that fosters social prosperity and inclusive growth. Local authorities will be encouraged to optimize their purchases of goods and services through a balance of insourcing, outsourcing, and hybrid models tailored to local needs in a whole-place manner.
According to Localis, councils should consider adopting a “local service reshoring model”, where smaller authorities hand over administrative responsibilities to arm’s-length delivery bodies, while delivery is outsourced to local agencies, such as Local Authority Trading Companies (LATCos) or from the private or third sector.
Given the move towards greater insourcing and the constraints of council capacity, local authorities are further urged to consider banding together to set up or make use of existing delivery vehicles for strategically assessing and controlling public contracts.
The report also recommends the use of dynamic contracting, where local contracts are equipped with mechanisms that allow for periodic review and adjustment of commercial terms to meet local needs.
The report makes several key recommendations for central government, including conducting economic and social impact studies to better direct local strategic capacity, providing greater clarity on legal definitions and scenarios under the new legislation, and supporting a local government capacity building program for council procurement departments.
Callin McLinden, the report’s author and Localis senior researcher, said, “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 hybridized.”
Justin Galliford, CEO of Norse Group, added, “Smart procurement is about more than just contracts – it’s about ensuring the best long-term value for our communities, creating social value, and ensuring local growth. Models like LATCos offer councils the advantages of insourcing, such as greater control over services and employment of staff, while operating in a more commercial environment with expertise.”
Jonathan Werran, chief executive of Localis, said, “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 programs to give council procurement teams the skills to navigate increased complexity and transparency.”
The report also makes key recommendations for local government, such as integrating procurement strategies with wider socio-economic objectives, considering hybrid models for new public contracts, and emphasizing dynamic contracting.
The report concludes with recommendations for both central and local governments to maintain momentum and continue collaborating to ensure that public contracting for social prosperity remains a priority.
For media inquiries, please contact:
Jonathan Werran, chief executive, Localis
(Telephone) 0870 448 1530 / (Mobile) 07967 100328 / (Email) jonathan.werran@localis.org.uk
Notes to Editors:
An advance copy of the report is available for download here:
https://www.localis.org.uk/wp-content/uploads/2024/10/Localis-New-Values-Report-AUG24-A5-PRF07.pdf
About Localis
Localis is an independent think-tank dedicated to issues related to politics, public service reform, and localism. They carry out innovative research, hold events, and facilitate a growing network of members to stimulate and challenge the current orthodoxy of the governance of the UK.
@Localis
About Norse Group:
Norse Group delivers the spaces and services communities need to thrive. They combine breadth, expertise, and scale with the insight of a local partner and the values of the public sector. Their mission is to offer an integrated approach to providing public sector services, generating sustainable long-term relationships and returns in a fair and ethical way, for the benefit of their clients, employees, and all other stakeholders.
www.norsegroup.co.uk
@NorseGroupLtd
Key report recommendations:
Policy recommendations
Central government
– Launch a local government capacity building program to enhance the staffing and training of procurement departments.
– Provide greater clarity in legal definitions and scenarios around the new procurement regime.
– Conduct economic and social impact studies on local authorities and their public contracts.
Local
