The only way is ethical procurement, Localis report on local spend advises
The public sector should strive to be more ethical and place-sensitive when buying goods and services worth up to £300bn each year, the think-tank Localis has argued.
In a report published today entitled ‘True Value: towards ethical public service commissioning’, the place experts examine the current state and likely future of the public service marketplace, as well as the role of social procurement reforms to advance the ‘levelling up’ agenda.
The paper urges the public sector to make the most of the freedom from EU directives to reform public spending on goods and services so the process becomes more strategic, innovative and delivers better services and local outcomes for communities.
Among key recommendations for place-based procurement reform, Localis calls for central government to prove the impact of their procurement spend, especially in priority areas of the country, to show how they are achieving goals outlined in the Levelling Up White Paper.
In its recommendations, Localis also sets out a local English charter for ethical public procurement centred around seven key themes:
- good jobs;
- good business;
- understanding local impact;
- carbon commitments;
- good training;
- high standards.
Localis chief executive, Jonathan Werran, said: “Procurement has been very much a criminally-neglected art, whose skills and potential impact are more vital now than ever post-Brexit.
“The extent to which better public service commissioning can improve public efficiency and social benefits to communities is seen as a niche issue. But, nearly a decade after the Social Value Act, as a positive force for shaping and improving the daily life of ordinary people everywhere it can’t be bettered.
“Local government has a pretty big dog in this fight. Some £180.6bn was spent with third parties in the last three years and £63bn alone was spent on third parties in 2019-2020. The trick for the next decade will be to boost the value of the local pound in making local economies stronger for people and places – whether through better local wages or enhanced skills acquisition for jobs in the age of net zero.”
Callin McLinden, Localis researcher and report author, said: “Public procurement has immense potential for recovery and levelling up – and now finds itself in its most exciting, yet precarious, moment for decades. Now free of the EU rulebook and in the hands of a government that is at least indicating its willingness to leverage public spending to tackle inequalities, there is a profound opportunity to remodel public procurement to work more strategically and deliver for communities.
“The government’s proposed reforms have many positives and notable negatives – but above all else they begin to realise the strategic power of procurement. ‘True Value’ investigates the potential of this strategic power – and how it can be most effectively delivered locally to best facilitate recovery and levelling up at the level of place.”
Alan Long, Executive Director of Mears Group, said: “To achieve meaningful levelling up in our communities, companies who bid for work with the public sector need to be more honest and open about social value outcomes when bidding for work. There are too many examples of poor practice in the sector which means councils do not get meaningful payback for their communities.
“Procurement at council level also needs an overhaul. I hope that the procurement changes will create a level playing field and genuinely enshrine social value as a metric on which contracts are decided, rather than simply on price.
“If we all get this right, the prize will see real and immediate benefits and harness the public pound for the benefit of all.”