Research Project

Procuring for place: New reforms to promote local innovation and sustainability
30 June, 2009

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European law on public procurement should be revised to allow councils to put their communities first, and to develop innovative ideas, thriving local economies and good building design, according to a new report from the think tank New Local Government Network (NLGN).

The paper calls on the UK Government to lobby the European Commission to place a greater emphasis on local discretion and the needs of particular communities rather than enforcing rigid practices that stymie creativity across the £50 billion of spent by local government.

This research argues that across the country there is an increasing shift to promote local economic resilience, wider community goals, environmentalism personalised services and innovative design through procurement. This requires new approaches to considered risk taking and to driving wider community outcomes beyond simply the bottom line price.

However, despite unearthing some excellent practice across the sector, NLGN’s survey found that there is scope for greater innovation in how local government procures.

Underlying this cultural risk-aversion is a prescriptive European legal framework that rewards compliance. The report argues that the legal framework leaves councils who are seeking to pursue local economic sustainability and innovative service design battling against a set of rules that prohibit innovation, reward the status quo and narrow the scope for service improvement.

Radical reforms to the European Union’s Competitive Dialogue procedure are also proposed to allow more innovative ideas to flourish, to ensure greater efficiency and for more proactive dialogue between authorities, bidders and providers.

The research argues that councils should go further to replicate some of the best practice including:

  • Tracking their procurement spend in their communities to ensure economic sustainability
  • Opening up opportunities to smaller businesses
  • Specifying their contracts in terms of the goals they wish to achieve rather than stating particular methods of working

Author of the report and Senior Researcher Nigel Keohane said:

‘Procurement covers some £50 billion and about half of the money spent by our local authorities. How it is done, therefore, is critically important not only in terms of efficiency but also in terms of ensuring that we build schools that last and design services that meet the specific needs of our community.

‘However, European legislation is undermining the scope for innovation and discretion at the local level and its influence spreads far beyond the simple letter of the law.

‘Especially now, as local communities seek to ensure their local economies are resilient, that we try to factor in our response to climate change and provide quality services, it is time for the Government to push for change to free up a more community-focused approach.’

The report will be launched in association with 4Ps and CABE on Tuesday 30 June at the LGA conference.

Publication Date: 30 June 2009
ISBN: 978 1 903 447 81 9
Authored by: Nigel Keohane