New Report Urges Local Councils to Use Public Contracts for Social Prosperity
A new report published by the think-tank Localis has advised local councils to make better use of their collective £72bn annual spend on goods and services to promote community prosperity. The report, entitled “New Values: local public contracts for networked social prosperity,” highlights the importance of the new Procurement Act, which will come into effect in February 2025, in driving social prosperity.
The Procurement Act emphasizes the importance of the “most advantageous tender” to unlock a wider concept of value for money that fosters social prosperity and inclusive growth. This means that local authorities will be encouraged to optimize their buying of goods and services through a balance of insourcing, outsourcing, and hybrid models tailored to local needs in a whole-place manner.
The report recommends that councils consider a “local service reshoring model,” where smaller authorities hand over administrative responsibilities to arms-length delivery bodies while outsourcing delivery to local agencies, such as Local Authority Trading Companies (LATCos) or from the private or third sector.
To support this approach, the report suggests that councils consider banding together to set up or make use of existing delivery vehicles for strategically assessing and controlling public contracts. It also encourages the use of dynamic contracting, where local contracts are equipped with mechanisms that allow for the periodic review and adjustment of commercial terms to meet local needs.
The report also includes key recommendations for central government, such as conducting economic and social impact studies to better direct local strategic capacity, providing greater clarity on legal definitions and scenarios under the new legislation, and supporting a local government capacity building program for council procurement departments.
Callin McLinden, the report’s author and Localis senior researcher, stated, “The Procurement Act is set to reinvigorate an admittedly dense but promising legislative framework for procurement and local service contracts, carving out greater strategic potential for the buying process to deliver socially prosperous and publicly valuable outcomes – whether services are insourced, outsourced, or innovatively hybridised.”
Justin Galliford, CEO of Norse Group, commented, “Smart procurement is about more than just contracts—it’s about ensuring the best long-term value for our communities, creating social value, and ensuring local growth. By focusing on what really matters, councils can help build a future where economic success also means stronger, healthier communities.”
Jonathan Werran, chief executive of Localis, added, “To deliver this shift at the level of place and guarantee communities and localities benefit fully from the current annual £72bn spend on local goods and services will require robust capacity building and training programmes to give council procurement teams the skills to navigate increased complexity and transparency.”
The report also stresses the importance of ongoing collaboration between central government and local councils to ensure that public contracting for social prosperity continues to be realized across the country. It calls for both local and central government to adopt evidence-based approaches and maintain a pragmatic and socially-inclined mindset.
For media inquiries, please contact Jonathan Werran, chief executive of Localis, at 0870 448 1530 or jonathan.werran@localis.org.uk.
The full report can be downloaded here: https://www.localis.org.uk/wp-content/uploads/2024/10/Localis-New-Values-Report-AUG24-A5-PRF07.pdf
About Localis:
Localis is an independent think-tank dedicated to issues related to politics, public service reform, and localism. They carry out innovative research, hold events, and facilitate an ever-growing network of members to stimulate and challenge the current orthodoxy of the governance of the UK.
About Norse Group:
Norse Group delivers the spaces and services communities need to thrive, combining breadth, expertise, and scale with the insight of a local partner and the values of the public sector. Their mission is to offer an integrated approach to providing public sector services, generating sustainable long-term relationships and returns in a fair and ethical way for the benefit of their clients, employees, and all other stakeholders.
Key report recommendations:
Policy recommendations:
Central government:
– Launch a local government capacity building program to enhance the staffing and training of procurement departments.
– Provide greater clarity in legal definitions and scenarios around the new procurement regime.
– Conduct economic and social impact studies to assess strategic capacity and resource allocation.
– Provide tailored and sustained central government support where needed.
Local government:
– Integrate procurement strategies with wider socio-economic objectives.
– Tailor contract design to local economic needs.
– Consider a hybrid model, such as using LATCos and arm’s length delivery vehicles.
– Emphasize dynamic contracting to ensure local objectives are being met.
– Consider joining together to set up or make use of delivery vehicles for strategic assessment of administrative and managerial control over public service contracts.
General:
– Ensure ongoing dialogue and collaboration between central government and local councils.
– Adopt non-ideological, evidence-based approaches to procurement strategy.
– Maintain a pragmatic and socially-incl
Derick is an experienced reporter having held multiple senior roles for large publishers across Europe. Specialist subjects include small business and financial emerging markets.