Wednesday, 19 March 2014

Procurement and local protectionism - how 'progressive' procurement will make communities poorer


Writing in New Start (the house journal of the Centre for Local Economic Studies, CLES) Matthew Jackson, the Centre's associate director sets out his argument for using local government procurement to do something other than securing the best price and quality for the goods or services procured. Matthew wants local protectionism:

For me, there is too much about using local government procurement to achieve efficiencies and to mitigate the impact of the cuts as opposed to advocating a progressive new future around local government procurement being used for local economic and social benefit.

This is, essentially, consultant-speak speak for finding ways round the strictures placed on procurement by the EU and Westminster governments. Rather than the commissioning and procurement process being about securing efficient and effective public services, Matthew wants to stretch its purpose to encompass the usual litany of 'progressive' politics:

Procurement should not be a narrow corporate function restricted to local government, nor is localism its primary concern. It sits at the heart of what we want and need from our public services in the future.  Of course it needs to focus on efficiencies, but effectiveness in supporting growth, addressing poverty and inequality and creating great places is the real prize.

The problem here is that these things often conflict - so which gets priority.  If using a large multinational guarantees quality and a lower price does that get the nod over the less reliable and higher cost local supplier? Matthew doesn't answer this question except to suggest that somehow we rig the procurement process.

There should therefore be a defined understanding of the key considerations of what an effective purchase is, regardless of whether it is being undertaken by central government, local government, an NHS Trust or a private business. Of course cost should be a key factor, but so should providing a great future role for our public services, as well as fairness, equality, and the opportunity to create local employment and develop local businesses.

Sadly these weasel words will infect local government leaderships, they'll cluck around the wise words of Matthew and his ilk and they'll fail to realise that the losers in all this are the very local people CLES claim their protectionist model will help.

The only way in which the model can work is for procurement costs to be higher than they would be in a system driven by seeking to maximise efficiency. And that means one of two things - either fewer services delivered to local people because more money has gone on procuring those services than was needed. Or higher taxes meaning that local people have less money to spend.

All this talk of 'fairness' and 'social benefit' coming from local protection is, quite simply, a deception typical of 'progressive' policy-making. The real result is worse government, fewer services and higher taxes.


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