Public Procurement (British Goods and Services) Bill

Lyn Brown Excerpts

2nd reading
Friday 15th March 2024 Commons Chamber

[Ms Lyn Brown (West Ham) (Lab)]

First, I thank my hon. Friend the Member for Rotherham (Sarah Champion) for bringing this Bill forward. I know that she has worked incredibly hard on it, and done an enormous amount of work consulting with a wide range of stakeholders on the need for it and its scope.

In Newham, adding value to procurement decisions is seen as a priority, but, as I am sure hon. Members will appreciate, it has been made extremely difficult with 14 years of austerity having left Newham Council reeling while massively increasing local need. The real impact of funding cuts is hard to quantify because each cut has a social and economic impact, but Newham’s general fund has been cut by about 18% and its population has increased by 16%. Of course, we cannot fix all of that through procurement, but we can address some of it through community wealth building in the long term. I want to be really honest about this: it is a really difficult thing to achieve, but that is what the council is working towards, and I believe it deserves our full support.

Like many councils, from Manchester to Darlington, Newham has gone further: it has decided to focus on the many ways we can build a community’s wealth. To me, community wealth is about creating a resilient and inclusive economy for the benefit of the local area. That means harnessing the economic and social power of locally rooted institutions, including our councils, schools, police, universities, health boards and housing associations. One way in which Newham Council is building community wealth is through increasing the proportion of its local procurement spend.

The council has also provided support to local businesses so that they can more easily reply to their tenders. A few years ago, Newham had a significantly lower proportion of resilient businesses than some other areas of inner London, with only 48% of businesses in Newham assessed as resilient in 2018, compared with 69% in inner London as a whole. For some of those businesses, being awarded longer-term local contracts helps them not only to survive, but to thrive and grow in a sustainable way. In the Royal Docks, the council has worked with partners to create London’s first living wage zone, with every single employer encouraged to pay the London living wage of £13.15 an hour.

More than 100 local employers have signed up to the council’s voluntary community wealth building pledge, which includes a commitment to pay the London living wage. The pledge also includes a wide range of steps that the council encourages employers to take to help build community wealth—for example, buying local, prioritising sustainability and supporting local residents. Those include having at least two Newham suppliers within their supply chains or committing to seek out quotes from Newham businesses when procuring new services and products. They also pledge to reduce their carbon footprints.

Businesses are encouraged to switch to a renewable energy provider or to implement a scheme to encourage their staff to cycle or get public transport to work. They are encouraged to invest in staff and young people. Businesses can create lots of opportunities for Newham’s massively talented young people through apprenticeships, and the council seeks to encourage that. Businesses who sign up to the pledge can choose to be linked to the council’s Newham work service to make it easier to hire local people. Businesses can also choose to be linked up with local voluntary projects that need their support.

All that means that businesses and employers become more invested in and embedded in our community. Equally, the emphasis on community wealth building has to involve connecting good local businesses with one another, supporting networks and harnessing the creativity of our small business leaders, because we all know that local Government officers do not have all the answers for how the local economy and society can prosper.

For most participants, the pledge is obviously voluntary, and the role of the council is to encourage and support good practice, not to impose it. There is a clear benefit for businesses, both for their reputation and in having a more secure network of partners around them. There is a clear benefit for businesses, both for their reputation and in having a more secure network of partners around them. Ultimately, we should see procurement for social value as one component in a larger strategy of shaping the local economy, so that the prosperity we create is more widely shared and better sustained over time.

When it comes to procurement, the council has a commitment to use its processes to ensure that contractors, as well as the council itself, pay the London living wage in full. That is clearly of massive importance given the continuing impacts locally of the cost of living crisis. I am sure that all Members present understand that our local areas having thriving businesses means better jobs for our communities and higher standards of living, and we all want that. Newham Council recognises the value of smaller local businesses and the value of good employment standards. Surely that is the kind of encouragement and offer of partnership we should be giving to entrepreneurs and business people across the UK.

Let me give one last example. Populo is Newham Council’s wholly owned housing company, which is building homes for rent—including a significant proportion of genuinely affordable homes—in order to tackle the housing shortage, which is impoverishing so many people in Newham. It is currently building hundreds of new homes in Newham, aiming for 7,000 by 2040. Because it is wholly owned by the council, Populo can embed higher standards in procurement, planning and design so that our wider social and economic goals are met, as well as delivering more of the homes that are so desperately needed locally. There is much more that I could say on this subject, Mr Deputy Speaker, but I want to give my Front-Bench colleague the opportunity to speak as well.