Simpler rules regulating how councils buy goods and services after Brexit could boost local growth and create jobs, the Local Government Association says today.
Council leaders say the Government needs to introduce a more efficient UK system regulating how councils buy goods and services when we leave the European Union.
The LGA said this could include giving councils greater ability to use local suppliers, specify a minimum local living wage for their suppliers’ employees, or specify additional social value so that companies awarded contracts can be asked to employ or train a number of local people.
Councils currently have to follow EU-wide advertising and award procedures when they buy goods and services. The process sometimes sits uneasily with supporting the local economy. The EU process can also take between 3 and 18 months – twice as long as typical private sector procurements.
Almost no public contracts end up being awarded to companies in other EU member states. Only 20 per cent of English councils receive EU expressions of interest from companies based in other EU countries. Across Europe, only 1.6 per cent of public contracts are awarded to companies in other member states.
The LGA says a “lighter-touch” system which simplifies this processes, and provides more flexibilities to promote local growth, is vital so that councils can procure to shorter timescales and lower high administration costs for businesses, especially small and medium-sized enterprises.
Councils in England, who collectively spend £55 billion per year on goods, works and services, will also still need to be able to advertise any contract of any size EU-wide should they wish to after Brexit, it said.
Cllr Kevin Bentley, Chairman of the LGA’s Brexit Task and Finish Group, said:
“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.
“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.
“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.
“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.”
Note to editors
There was a diversity of views among local government about Britain’s membership of the EU. To reflect this, the LGA remained neutral during and post the referendum.