Local government procurement needs to 'step up to the mark' say MPs

Will Green is news editor of Supply Management
13 March 2014

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13 March 2014 | Will Green

MPs have described progress in improving local government procurement as “slow and patchy” and warned that the sector needs to “step up to the mark”.

In a report published today the Communities and Local Government Committee said councils needed to collaborate more to save cash, that some were “over-zealous” in applying EU regulations, and contract management needed to improve.

The committee said local government spends around £45 billion – a quarter of its total annual expenditure – on procuring goods and services, and £1.8 billion could be saved if collaboration was the “default option”.

However, centralisation along the lines of the Crown Commercial Service in central government was not the answer and “councils must retain the flexibility to deliver local priorities”.

MPs, who began investigating council procurement in July last year, called on the Local Government Association (LGA) to develop best practice guidance on collaboration and to support councils to pool spend in areas such as IT, energy and construction.

The report also said the LGA should disseminate guidance on how local authorities should use procurement to deliver social, economic and environmental objectives on the basis of “best value not simply lowest price”.

At the same time, the LGA should take a lead in simplifying and standardising pre-qualification questionnaires, which the committe did not want removed, to reduce the burden on suppliers.

MPs said contracts for outsourced services should contain clauses stipulating transparency to a similar level as that required by the Freedom of Information Act, on pay and conditions for workers, and fair payment terms for firms further down the supply chain.

The committee said outsourcing did not mean “let and forget” and in some cases councils had failed to monitor quality and then borne the costs when a contractor failed to deliver.

The report, recommending the LGA establish a “flying squad” of trainers to improve skills across local authorities, said: “If all councils are to procure at the optimum level, including procuring in the most effective manner for delivering social, economic and environmental objectives, most need to improve their procurement skills. This will require investment but more cost-effective ways of sharing capabilities need to be found if councils are to address their skills shortages at a time of financial constraint.”

The report added: “Achieving change requires procurement to be seen not as a niche activity for specialists, rather as the essential activity underpinning service delivery. Renewed efforts are needed from the sector, and from its partners in central government and the private and voluntary sectors, to ensure that all council procurement is raised to the level of the best.”

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