Job creation, investment in skills and opportunities for local growth should be taken into account when awarding public contracts, according to new guidance.
Recommendations outlined in the new Procurement Policy Note (PPN) outline the UK’s National Procurement Policy Statement (NPPS), a set of strategic priorities for public procurement and how contracting authorities can support their delivery.
Within the statement, officials in the UK's central government and public organisations, including local authorities, NHS trusts and police departments, have been urged to ensure wider benefits of spending public money are factored into procurement processes.
Moving forward, public procurement should consider how contracts will help to “create new businesses and jobs across the UK, lead to the development of new skills and innovations and tackle climate change and environmental waste”, the guidance stated.
“While securing the best value for money is crucial, procurement teams have been told they must not simply award contracts to the lowest bidder – especially when wider economic benefits can be proved,” it added.
As well as taking on board strategic priorities, contracting authorities must have policies and processes in place that help manage the key stages of procurement delivery, such as the publication of procurement pipelines, market health and capability assessments or pilots.
“This will help secure value for money including delivery of social value outcomes, and ensure that authorities have a solid foundation for continuously improving their procurement practice,” the guidance said.
Contracting authorities should also consider opportunities for working together to deliver the best value for money both at national and local levels.
“By collaborating on procurement and on contract and supplier management, contracting authorities can: make best use of commercial and procurement skills, benefit from economies of scale, achieve efficiencies in the use of resources, and realise savings and wider community benefits,” the NPPS stated.
Lord Agnew, Cabinet Office minister, said: “The public sector across the UK, from hospitals and schools to central government, police forces and universities, spends about £290bn a year through public procurement.
“The huge power of that expenditure must support us in tackling some of the most important issues we face today, from generating economic growth and helping our communities recover from the Covid-19 pandemic, to supporting the transition to net zero.
“With the new statement published today, procurement teams will have to consider those issues as well as making sure they deliver top-quality public services that are good value for the taxpayer.”
This latest statement builds on the recently announced Procurement Bill, aimed at simplifying procurement in the public sector, which was outlined in the Queen of England's speech last month.