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 as well as those at other public organisations such as local authorities, NHS trusts and police forces - makes it clear that the wider benefits of spending public money should be factored into the procurement process.

Procurement teams have been told that they must not simply award contracts to the lowest bidder – especially when wider economic benefits can be proved.

The guidance also sets out how organisations should ensure they have the right organisational capacity, skills and capability to manage efficient procurements and how transparency should always be a key element of public procurement.

Cabinet Office Minister, Lord Agnew, said: “The public sector across the UK, from hospitals and schools to central government, police forces and universities, spends about £290 billion a year through public procurement. The huge power of that expenditure must support us in tackling some of 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 as well as making sure they deliver top-quality public services that are good value for the taxpayer.”