Government transformation of procurement broadens scope of 'public benefit'

The Government has issued new guidance covering around £290 billion of annual spending across the entire public sector, as part of plans to transform procurement, and support government commitments to the levelling-up and green agendas.

Job creation, investment in skills and opportunities for local growth should be taken into account when awarding public contracts, following the publication yesterday of a new National Procurement Policy Statement for public bodies.

The new guidance - issued to officials in central government as well as those at other public organisations such as local authorities, NHS trusts and police forces - makes it clear that the wider benefits of spending public money should be factored into the procurement process.

This includes considering how public 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.

And 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.

"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," said Lord Agnew, Cabinet Office Minister. "When it is done well, public procurement can help small businesses grow, increase employment opportunities in disadvantaged areas and increase training opportunities for people in industries with known skills shortages, and the guidance published today sets out how teams should take these considerations into account."

The new guidance also sets out how organisations should ensure they have the right organisational capacity, skills and capability to manage efficient procurements and how transparency should always be a key element of public procurement.

"Now the UK has left the EU and the transition period, we have the opportunity to completely overhaul the public procurement rules that govern how this money is spent and create a simpler procurement regime which tackles poor performance in the supply chain while also reducing costs for businesses and the public sector and complying with our international obligations," Lord Agnew explained.