A future Labour government should appoint a cabinet minister with responsibility for purchasing and ensure there is at least one buyer for every £1 million of central government spend, according to a report from the party’s task force on public procurement.
The report recommends a “professionally resourced procurement and contract management function within the civil service” should be established, and that a “Labour government’s approach to public procurement needs to be strategic rather than ad hoc, taking full advantage of the freedoms allowed under EU law to align government contracting with Labour’s wider political goals and underlying values”.
The report, which was produced by a task force involving the Labour Finance and Industry Group and the Society of Labour Lawyers, said its recommendations should be stated as policy “from day one of a new Labour government”, but an independent review should be competed within three months to “consult with affected stakeholders on their detailed implementation”.
The report said a “new and socially responsible procurement policy” should be introduced, which includes scoring bidders for social value, community benefits and environmental impact and then making the winning bidder's proposals in these areas enforceable through contract performance conditions.
“In this way, while not mandating apprenticeships or payment of the living wage in every case, bidders could be encouraged to make proposals for taking on apprenticeships and paying the living wage, and the winning bidder’s proposals would become enforceable under the contract,” said the report.
The report also recommends a target is set that 25 per cent of central government spend goes to SMEs “at all levels of the supply chain by 2020”. The current government recently announced that it had reached an "aspiration" to channel 25 per cent of spend through SMEs.
Hamish Sandison, chairman of the task force, said they did not argue that government “should make or buy particular public goods, nor that it should insource or outsource particular public services”.
“Our working assumption is that for the foreseeable future, government will need to buy a substantial proportion of its public goods and services from third parties – whether from suppliers in the private sector or from social enterprises and voluntary organisations,” he said.
He said during the last Labour government “it is probably not unfair to say that Labour ministers were slow to use public procurement to stimulate social and environmental improvements”.
“Looking ahead to the next five years at Westminster, there has never been a better time in our country’s history for the incoming government to use public procurement to deliver social value and community benefits,” he said.