Council chiefs have called on the Government to ‘simplify’ the current rules on how councils buy goods and services once the UK has exited the European Union.
The Local Government Association (LGA) argues EU rules sometimes sit ‘uneasily’ with supporting the local economy and is calling for Whitehall to introduce a more efficient UK system regulating how councils procure goods and services.
‘The UK’s exit from the EU will have a significant impact on local government, creating challenges that need to be addressed but also opportunities to do things differently,’ said Cllr Kevin Bentley, chairman of the LGA’s Brexit task and finish group.
‘The way councils spend money has a huge bearing on local growth and job creation. But EU rules over how they buy goods and services can stifle those efforts and take up time and money.’
Local authorities currently have to follow EU-wide advertising and award procedures - outlined in a series of EU procurement directives - when they buy goods and services, which means they cannot privilege local suppliers over those from other EU member states.
The LGA says that post-Brexit the UK Government should legislate to give councils greater ability to use local suppliers and specify a minimum local living wage for their suppliers’ employees. Councils should also be allowed to specify additional social value so that companies awarded contracts can be asked to employ or train a number of local people.
As well as taking between three and 18 months - twice as long as typical private sector procurements - no public contracts end up being awarded to companies in other EU member states and only 20% of English councils receive EU expressions of interest from companies based in other EU countries.
Across Europe, only 1.6% of public contracts are awarded to companies in other member states.
The LGA argues a ‘lighter-touch’ system which simplifies this process would allow councils to procure to shorter timescales and lower high administration costs for businesses, especially small and medium-sized enterprises.
However, the LGA emphasised councils, who collectively spend £55bn per year on goods, works and services, should still be allowed to advertise any contract of any size EU-wide after Brexit.
‘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,’ said Cllr Bentley.
‘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.’
