Local Government Procurement

Debate between Iain McKenzie and Brandon Lewis

Wednesday 16th January 2013 Westminster Hall

[The Parliamentary Under-Secretary of State for Communities and Local Government (Brandon Lewis)]

I congratulate the hon. Member for Denton and Reddish (Andrew Gwynne) on securing the debate. He is right; local authorities can be market shapers and are uniquely placed to support local jobs and business growth in their areas. They understand their local economies. They have links to local businesses and can work with both public sector and private sector partners to create the conditions for growth. Councils with planning powers can shape their local market, driving regeneration and growth. That will be increasingly important and advantageous for them with the new business rates retention scheme.

I will explain where I have a difference of opinion. We must ensure that we procure efficiently and effectively, and councils can decide to use the money locally as part of driving growth, but procurement is not about engineering their areas. Procurement should be about good procurement. I will come to that specifically in a moment. We have to trust councils, as part of localism, to get on with it and not be tempted, as central Government, to fix it for them or to direct them too far on how they spend money locally.

Councils are almost always one of the largest spenders and employers in their local economies. Local government as a whole holds assets worth more than £230 billion and, as the hon. Gentleman rightly said, last year spent about £60 billion on directly procuring goods and services. That is a substantial amount of money. Many local residents will take the view in relation to that £60 billion spend—this would be the same for any business—that if we can save just a couple of per cent, councils will be able to spend more money on front-line services. They must ensure that they use that money efficiently and effectively for local residents.

By making life easier for small local businesses to bid for and win council contracts, which the hon. Gentleman touched on, and by being cleverer about how they use their spending power, local authorities throughout the country can do more to stimulate local growth. The Government have taken significant steps to support councils to embrace their role as supporters of the local economy. We have introduced a number of reforms to free town halls from Whitehall bureaucracy and give them the tools to help with the difficult challenge of driving growth. We have done that by providing strong positive financial incentives for local authorities and communities to support and encourage local housing and business growth—for example, by allowing them to keep a share of business rates.

We have supported local enterprise partnerships. We have allocated £730 million to them to support local development. There is substantial planning reform to ensure that planning policy supports growth. We are providing greater financial flexibility locally, so that there is greater scope to support local economic growth. We are providing £1.4 billion of direct support through the regional growth fund. We have agreed city deals and announced Portas pilots to revive local high streets.

We are also taking a number of steps to support local authorities directly in using their spending power to support and boost local economies. For example, we have established the contracts finder portal and created simplified pre-qualification questionnaires, which are free for use by local authorities. Those make it easier and cheaper for small and medium-sized firms and the voluntary and community sectors to bid for public sector opportunities.

We have also taken steps to deal with the recognised commissioning skills deficit in local government. The commissioning academy will provide development on commissioning skills for up to 2,000 public sector employees over the next three years. That will be supplemented by the establishment of an online home for public sector commissioning expertise and learning, so providing all local authority officers with access to free learning materials on commissioning.

Clearly, central Government cannot deliver better hands-on local procurement. What we can do is create the right conditions by eliminating unnecessary red tape, as my hon. Friend the Member for High Peak (Andrew Bingham) said, and by removing barriers to local innovation. It is for local authorities themselves to take the initiative in their local areas. The general power of competence in the Localism Act 2011 gives them far more power than they have ever had before to do just that. I look forward to more and more local authorities taking advantage of the opportunities that that general power gives them.

There are some very good examples out there. I want to touch on a few, including the local council of the hon. Member for Denton and Reddish. There are some very good examples specifically at Tameside metropolitan borough council, which has been particularly proactive in stimulating local procurement with Meet the Buyer events and initiatives such as the Tameside Business Family and Tameside Works First.

Hon. Members touched on Manchester more generally. The north-west procurement portal and supplier training events are also excellent examples of pooling procurement expertise and making it simpler for SMEs and local businesses to tender for public sector contracts. The result has been a widespread shift to more local procurement spending across the entire north-west. As hon. Members will know, Manchester city council has shifted 10% of its current spending from non-local suppliers to local suppliers, so generating many millions of pounds for the local economy.

Eleven local authorities and 11 other Hertfordshire-based public sector organisations have grouped together using the collective brand Supply Hertfordshire. A web portal advertises all contract opportunities for member organisations. That includes regular e-mail notification for suppliers.

[Mr McKenzie]

Does the Minister agree that collaborative procurement offers not only savings, but greater opportunities to provide such information as contract monitoring?

[Brandon Lewis]

The hon. Gentleman makes a very good point. Working together produces an awful lot of benefits; he is right about that. They include spreading best practice and being able to buy in a larger critical mass and therefore get a better purchase price.

There are many good examples out there. I have mentioned what Hertfordshire is doing with small and medium-sized businesses. Waveney district council has simplified its tender documents to encourage third sector organisations, as well as small businesses, to tender for contract opportunities. Its objective is to reduce the maximum time for suppliers to complete a tender response to one hour. That kind of practice makes life much easier for businesses that do not have the capacity to take on some of the larger tender documents that we have seen in the past. We need to make contract opportunities more accessible in such ways.

I again thank the hon. Member for Denton and Reddish for initiating the debate to give us all a chance, through the record of Hansard, to highlight to local authorities that want to take notice of what they could be doing. Their members can look at what other authorities are doing and challenge their officers to go further and faster on this journey.

Finance (No. 4) Bill

Debate between Iain McKenzie and Brandon Lewis

Thursday 19th April 2012 Commons Chamber

[Brandon Lewis]

I supported the Budget a couple of weeks ago and I still do now. It is important to look at it in its entirety, and at how it fits in with other things that are going on. At the moment, an increase in personal allowance is being put in place; it will rise by £1,100 in April 2013, taking it to £9,205 in total. That is the largest real personal tax cut for the median earner in more than a decade, from which 24 million people will benefit. It will give basic rate taxpayers a real cash gain. The Government are taking 2 million low-paid workers out of tax altogether.

Let me put that increase in local context as the Member of Parliament for Great Yarmouth. It lifts an additional 75,000 people in the east of England out of income tax altogether. That will have a dramatic impact on many low earners in my constituency, which is the 54th-most deprived local authority out of 326. The average earnings in Great Yarmouth are £21,900 per annum, compared with the national average of £26,100.

[Mr Iain McKenzie (Inverclyde) (Lab)]

Does the hon. Gentleman agree that to benefit from this increase in the tax threshold one first needs to have a job? That is what most of my constituents are asking for—a job.

[Brandon Lewis]

I thank the hon. Gentleman for that intervention, which gives me a chance to highlight the good news we had this week regarding the number of people in employment. In Great Yarmouth we saw not only an increase in employment this month, which is very welcome, but an increase in the number of young people in employment. That is a testament to the work the Government are doing, and also, I hope, a sign of the improvements that are coming. It is also a testament to the opportunities put in place through the previous Budget and the work of the Department for Work and Pensions, particularly on work experience and the Work programme, which is also having an impact.

In Great Yarmouth, we also have a particularly high number of part-time and seasonal workers due to the nature of the constituency and its tourism industry. The change in personal allowance is a huge help to that sector of the local work force. It puts extra money into the pockets of hard-working families across my constituency.