Local authorities should strive to be more ethical and place-sensitive when buying goods and services, think tank says.

A new report from Localis urges local authorities to use their spending power to promote ethical outcomes and to benefit local communities. Councils spent £180.6bn on goods and services from third parties in the last three years with £63bn alone being spent on third parties in 2019-2020.

EU directives placed restrictions on procurement rules, which meant local authorities were not able to favour local providers when awarding contracts, according to the think tank. The Public Contracts Regulations 2015 also required that contracts be awarded to the lowest bidder across the EU.

In their new report, True Value: towards ethical public service commissioning, Localis argues that the public sector should ‘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.’

‘Procurement has been very much a criminally-neglected art, whose skills and potential impact are more vital now than ever post-Brexit,’ said Localis chief executive, Jonathan Werran.

‘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.’

Local government must mark a decade of social value with purpose driven procurement, writes chief executive of Localis Jonathan Werran in The MJ.