Changes in EU procurement rules 'are stifling councils'

10 Jan 11
Changes in European Union procurement rules make it more difficult for councils to be innovative, according to a Local Government Association survey
By Vivienne Russell

10 January 2010

Changes in European Union procurement rules make it more difficult for councils to be innovative, according to a Local Government Association survey.

One of the main problems highlighted in the online survey, which questioned 141 procurement officers working in English and Welsh councils, was the impact of the Remedies Directive. Introduced in 2009, the directive allows bidders to review an authority’s award decision if they believe a contract has been awarded unfairly.

Sixty-nine per cent of respondents said dealing with challenges from unsuccessful bidders was an issue for their council.

One respondent said the number of complaints raised by unsuccessful bidders had ‘increased hugely’ since the directive took effect.

‘[It is] a huge extra burden to process all this, even when in most cases the process can be shown to be fair and the complaint is unjustified,’ they said.

Other issues raised by the survey were legal uncertainties around shared services with other councils and public bodies. A total of 65% of respondents said this was problematic, with several calling for clear guidance on the legal and practical implications of collaborating with other councils.

The area most respondents thought had improved under the directives was transparency. Competition between suppliers and the costs of goods and services were the areas most commonly identified as unaffected by the directives.

An LGA spokesman told Public Finance: 'The results are in line with what we expected. The EU Procurement Directive has improved procurement practice in a lot of councils and increased transparency. However, there is still an issue of too much red tape. Staff are spending more time jumping through bureaucratic hoops, which has driven up the cost of running procurements. The tendering process needs to be simplified to bring down that cost and we’ll be pursuing that.

'In addition, the potential cost of defending themselves against legal action has led a number of councils to be cautious in their procurement practices, which has stifled the kind of innovation which could lead to big savings. This is particularly true in the area of sharing or trading services with other public bodies. Uncertain wording in the directive has left a number of councils unsure whether they have to go through an open tender process before entering this type of agreement. We’ll be lobbying for this issue to be clarified in an amended directive.'

The survey was published on the LGA’s website on January 6.

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