Navigating the New Procurement Landscape
Originally published in the MJ
Big numbers are often a good way to get the thinking juices running. Ahead of the November 26 Budget, the estimated annual expenditure of the UK state weighs in at a stonking £1.28 trillion, bloated by extra spending commitments of around £150bn a year that piled on during the pandemic and haven’t been shed.
Set against this figure, councils in England currently spend £127bn each year on goods and services. As a strategic lever at local level, there really isn’t anything to compare for anything as immediate in securing broad economic, social and environmental ends. Only strategic planning comes anywhere as close.
Inspired by former communities secretary Angela Rayner’s speech at the Local Government Association Conference 2025, Localis returned to examine how the landscape for place-based procurement reform has moved on in the year since the Procurement Act and the flexibilities it promised was put into play this February with the establishment of a single, unified statutory framework.
Our study, entitled, ‘New values, new landscape: public contracts for social prosperity – 2025 update’ suggests there remains large scope for local government to redirect and shift the purpose of its expenditure to benefit the communities they serve.
Within New Values, Localis last year set out a strategic procurement agenda based on orienting public contracts toward ‘social prosperity’, meaning contracts that not only deliver services cost-effectively but also advance social value, e environmental sustainability, and inclusive local economic growth. We urged councils to integrate procurement with wider socio-economic objectives defined by local wellbeing, using the new Procurement Act’s flexibilities to privilege local SMEs, VCSEs, and build skills outright through such contracts.
The report also championed innovative delivery models to this end, recommending models with a strategic mix of insourcing and outsourcing, hybridised in accordance with appropriate roles and responsibilities. These included the use of LATCos or other arms-length vehicles to both pursue strategic goals in service delivery and play a key role in their administration, convening, and management.
One year on, Localis discerns a divide in how new legislation might influence future advances in procurement impact. On the one hand, the government’s legislative agenda for the English Devolution and Community Empowerment Bill contains scope to expand socially focused contracting and to strengthen community resilience.
However, on the other hand, streamlining measures outlined in the Planning and Infrastructure Bill, and perhaps further amendments to be tabled in the run up to the Budget, could centralise and unravel attempts to provide bespoke community-focused social value from new housing and infrastructure developments.
Despite the progress made on procurement in the last year, key risks and contradictions remain. Firstly, the tension between central mission-setting and local strategic autonomy must be carefully managed. While central frameworks such as NISTA, the National Procurement Plan, and the Industrial Strategy Council offer coherence, they can risk disempowering localities.
Secondly, the report finds fiscal constraints remain acute, and that despite increased settlement certainty, councils continue to face demand pressures and capacity challenges that will hamper their ability to implement more complex procurement strategies.
Thirdly, while legal flexibilities now exist under the Procurement Act, cultural inertia and risk aversion within commissioning bodies risk slowing down the take-up of new commissioning approaches that could create greater public value and efficiency.
‘New Values, New Landscape’ recommends that to make the most of the new procurement landscape, councils should monitor:
- the uptake and local implementation of ‘most advantageous tender’ provisions;
- the efficacy and accountability of new hybrid delivery models as they are put in place;
- the integration of devolved spatial strategies into national investment plans;
- the alignment and expansion of social value KPIs across local and central government;
- the durability of insourcing initiatives under economic pressure
In short, public procurement has become one of the clearest strategic levers councils have to deliver social prosperity, good jobs, resilient services and greener, fairer local economies.
With the Procurement Act now in force, creating a single, more flexible framework, and major devolution and planning reforms reshaping how places govern, the opportunity and stakes have both shifted significantly since our previous ‘New Values’ report.
Our update shows how councils can lock in social, economic and environmental value into every major contract while still retaining democratic control through hybrid delivery models, including through the use of LATCos as controlled entities, rather than defaulting to the tired outsourcing binary of the previous regime.