Procurement teams must consider wider benefits of public spending

New guidance for public bodies stresses that job creation, investment in skills and opportunities for local growth should be taken into account when awarding public contracts.

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

Procurement teams have been told that they have to not merely award contracts towards the lowest bidder – particularly when wider economic benefits could be proved.

The guidance also sets out how organisations should ensure they've the best organisational capacity, skills and capacity to manage efficient procurements and how transparency should always be a key component of public procurement.

Cabinet Office Minister, Lord Agnew, said: “The public sector over the UK, from hospitals and schools to central government, police forces and universities, spends about £290 billion annually through public procurement. The huge power that expenditure must support us in tackling probably the most important issues we face today, from generating economic growth and helping our communities recover from the Covid-19 pandemic, to supporting the transition to net zero. With the new statement published today, procurement teams will have to consider those issues in addition to making sure they deliver top-quality public services which are good value for that taxpayer.”