Local government buyers need to be “bolder and braver in embracing new markets” to provide public services.
Jim Bligh, head of public services at the CBI, told the Society of Procurement Officers in Local Government (SOPO) conference a “fundamental change” was needed, including local authorities moving “from being provider of a service to being commissioner of that service”.
“Local government we think needs to be bolder and braver in embracing new markets and ensuring it has the skills to steward those markets,” he said.
“We need fundamental change in how local government interacts with markets. There needs to be a completely new relationship.”
He added: “Better market management will require better commercial skills.”
Bligh cautioned against including conditions on pay in contracts, such as the living wage, which he said would add “£2 more per hour per staff member”.
“If businesses can afford to pay the living wage and they want to then they should, but if it’s a requirement, it will filter through to the cost,” he said.
He also said social value was not the ultimate priority for buyers when drawing up contracts.
“Steer away from social value as the top end in itself, because clearly getting a good deal for the taxpayer is the only priority for all of us,” he said.
Bligh said calls to include private firms providing public services in the Freedom of Information Act should be resisted.
“We think the customer has every right to know where their money is being spent. We want transparency to be at the heart of contracts,” he said. “We don’t want the Freedom of Information Act to be extended. We would not want that poor piece of legislation spread to the private sector.”