Councils to get powers to save contracts for local areas

The government has put forward proposals to allow local authorities to reserve some contracts for suppliers in their area.

The reforms aim to unlock growth by slashing commercial red tape, simplifying the public contracts regime and removing barriers for smaller firms to work with government.

Under the proposed reforms, councils, fire and police authorities in England will now be able to reserve competitions for their lower-value contracts to UK-based suppliers and suppliers in a defined local area.  

The change will misapply section 17(5)(e) of the Local Government Act 1988 in certain circumstances and will give local authorities the tools to support growth in their communities, while maintaining the core principles of fair competition and value for money when awarding below-threshold contracts.

Chris Ward, Parliamentary Secretary at the Cabinet Office, said: "We’re changing the rules that have held back councils from investing in local businesses that are the lifeblood of local economies.

"This will put power back in the hands of our communities to drive growth, unlock skilled jobs and create local investment that rewards working people."

Alison McGovern, Minister of State for Local Government and Homelessness at the Department for Housing, Communities and Local Government said: "We want councils to help create jobs, opportunities and growth right across the country.

"Making sure they can prioritise our brilliant local businesses is a huge step forward in achieving that, and will mean more money going to firms that know their areas best and can invest in the communities they serve."