Opportunities for public procurement post-Brexit

How can public spend work harder for local economies following our departure from the EU? Matthew Jackson has some ideas

I have spent the last ten years undertaking work around local wealth-building as part of my role at the Centre for Local Economic Strategies (CLES).

We have been particularly interested in public procurement – the way in which we go about purchasing goods and services – and in particular three things.

Firstly, we’re interested in where the procurement spend of local authorities and other anchor institutions goes and the impact it has upon local economies. Secondly, shifting the behaviour of procurement officers so that they think not only about price in the procurement process but also about social value and addressing local challenges. And thirdly, shifting the behaviour of suppliers so they deliver wider outcomes which go beyond the provision of a good or service.

CLES’s work in Manchester and Preston is well known. In these places we have adopted a long term, evidence-based and collaborative approach to respond to the three areas of interest described above. More money is now being spent in local economies, procurement is being used as a lever to address wider challenges, public procurers are thinking differently, and supply chain organisations do have a greater affinity to the places in which they are delivering.

Despite the above evidence of change, I still stand up on platforms across the UK and Europe and am asked, ‘Does EU procurement law enable this?’ or ‘Is procurement a real lever for local economic development?’ or ‘Can the supply chain be influenced?’ or ‘Can procurement become less risk averse?’.

The answer to all these questions is always a unanimous yes.

The EU procurement directives of 2014 introduced three very important phrases in relation to public procurement. They talk of the importance of flexibility in the process of procurement, about the need to increase the amount of spend with small and medium-sized businesses, and about using procurement strategically to achieve wider social and environmental goals. In the UK, we have had the social value act in place since 2012 encouraging procurers to think about economic, social, and environmental considerations in the process.

The foundations are effectively already there for more progressive practice and in CLES’s latest publication we talk about these opportunities for public procurement post-Brexit. There are two tiers of required change when it comes to procurement policy and practice post-Brexit.

First, at the national level there needs to be a ‘beefed up’ social value act which is applicable to local public procurers and those in central government, and whereby social value is not just a consideration but a requirement. This is effectively a piece of more socially responsible legislation.

Second, at the local level, this ‘beefed up’ legislation needs to be implemented, but in a way which is relevant to local circumstances and with a realisation that procurement is not just a way of making a decision about what to buy, but a process or cycle which sits across and is relevant to: strategy development, commissioning and design of services, tendering, decision-making, and the delivery of goods and services and associated monitoring.

Our work around procurement and wider local wealth-building has realised that procurement is important. It is a core component of the wealth which we have at our disposal. Collectively, at the central and local levels, we need to use this wealth to both address wider challenges and grow our places, both economically and socially.

Post-Brexit may be the time for legislative change; but there is an opportunity to further shift cultures and behaviours around public procurement now.