Buying power is key to Labour’s localism

12 Oct 23

Starmer’s decentralising plans go beyond the surface, writes Callin McLinden of Localis.

Kier Starmer Shutterstock 2216402007

Kier Starmer. Image © Rupert Rivett/Shutterstock

Keir Starmer’s Labour Party is displaying a tacit leaning towards decentralisation and empowering local government.  A notable aspect of this rhetorical emphasis on transferring significant power from Westminster to the British populace is encapsulated in the party’s commitment to altering the landscape of local public procurement. 

During Labour’s 2023 annual conference, a pledge was made to extend additional housing powers to local mayors, indicating a potential impact on local procurement in the housing sector. Furthermore, Starmer’s inclination towards a constitutional overhaul could redefine the roles of local authorities and mayors in economic matters, thereby affecting local procurement processes.

Perhaps more concretely, however, Labour delegates are poised to review and approve a comprehensive policy programme, encapsulated in a 116-page document under Labour’s National Policy Forum.

This document is anticipated to significantly influence Labour’s manifesto for the upcoming general election. Particularly, the section on ‘Government Contracts’ seems to resonate with a strategic, more localist public procurement ethos, working towards aligning contracts as levers for local economic empowerment and sustainable growth.

The unveiling of an outright National Procurement Plan exemplifies Labour’s commitment to ingraining social value as a core tenet in contract design, rather than an afterthought. This plan aligns with the introduction of a new Fair Work Standard, recognising and rewarding exemplary employers, under the aegis of a newly envisaged Social Value Council. This council, set to meld public, employer, and trade union representatives, will be mandated to meticulously review and bolster social value delivery in public contracts.

This proposed approach designs government contracts to integrate stretching social, environmental, and labour clauses, ensuring holistic, value-driven public procurement practice. The economic and security dividends of British ownership are to be amplified through refined regulatory frameworks, epitomised by a reinforced public interest test for takeovers. A Supply Chain Taskforce is envisioned to scrutinise supply chain requisites across critical sectors, ensuring a resilient supply chain ecosystem conducive to local business growth.

Central to Labour’s vision in this regard is the support for local enterprises, envisaging a procurement mechanism devoid of bureaucratic red tape, thereby offering small businesses a fair shot at bidding success. This blueprint echoes the strategic procurement approach identified by Localis in our 2021 report ‘True Value’, intertwined with a revamped industrial strategy underpinned by building a ‘Buy, Make, and Sell in Britain’ culture, aiming to galvanise the local industrial landscape across regions.

The reimaging of the UK Infrastructure Bank is also notable, intended to operate under new criteria ensuring judicious use of public funds for creating meaningful employment, with a board composition inclusive of trade union representatives ensuring a balanced representation of interests. Its mandate would extend to fostering supply chain resilience, echoing Labour’s broader industrial strategy aimed at local and national ‘industrial renaissance’.

A resonant theme throughout Labour’s proposal is nurturing Britain’s skills base, leveraging government contracts to foster apprenticeship and learning avenues. This, coupled with a drive to engender a culture change focused on local and national industrial growth, sets the stage for a Green Prosperity Plan aimed at fuelling sustainable, localised industrial growth. 

Labour’s procurement blueprint emerges as a seemingly well-crafted amalgam of economic prudence, social value, and environmental stewardship that, if committed to and successful in practice, is poised to revitalise the public procurement landscape and build on the current government’s upcoming reforms as of October 2024.

From a localist perspective though, Labour’s renewed approach to public procurement, particularly at the local level, appears to at least attempt to address the longstanding tension between central oversight and local autonomy. However, caution must be exercised. The central-local dynamics in the UK have evolved and soured significantly over the years, with notable attempts by various governments to decentralise often falling short of intended objectives.

The historical centralism characterising the UK government’s procurement policy has left local authorities under significant central supervision with limited local autonomy – with only the most innovative and high-capacity local authorities able to break step and make the most of such a dynamic.

Labour’s proposed approach to procurement, aimed at supporting local businesses and ensuring social value, does present a potential decentralisation of procurement decisions to empower local authorities. 

Yet, a change of government does not automatically herald better relations or procurement practice. No matter how worthy the proposed reforms may be, central government is but one notable factor in a complex public procurement system with many actors.

The complex interplay of various agents in the procurement ecosystem, many of whom have varying levels of capacity, innovation, and strategic prowess, warrants a cautious optimism.   So it is safe to acknowledge that Labour’s proposed reforms could be important steps in a long journey towards a truly localised and empowered procurement paradigm.

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