What would good procurement look like?14th September 2021
By Rhian E. Jones
As Good Law Project has consistently noted, the government’s current procurement procedures amount to cronyism on an industrial scale. The National Audit Office report into procurement during the Covid pandemic revealed contracts awarded to companies closely tied to the Conservative Party, with little of the transparency, accountability or checks and balances that should ensure quality, efficiency and cost-effectiveness and safeguard against corruption in the use of public funds.
Procurement doesn’t have to – and indeed, isn’t meant to – work this way. A different strategy, which works for the local community, business and environment, is not only possible but has recently been implemented in Preston, in a new approach to local government which has been described as both “guerrilla localism” and “extreme common sense”.
A decade ago, the small city of Preston in Lancashire was typical of many parts of the country: hit by deindustrialisation, austerity and government funding cuts. Preston’s final hopes for regeneration had been resting on a corporate-led development project, but these plans collapsed in the fallout from the crash of 2008. Finding themselves failed by conventional models of regeneration, Preston’s newly elected Labour council decided to try something equally new. If developer-led models dependent on outside investment hadn’t worked, why not use the city’s own resources?
Beginning in 2012, Preston’s council began to build alliances with the public bodies on their doorstep, dubbed “anchor institutions” – including local hospitals, colleges and housing associations – to channel more of their procurement budgets towards revitalising the local economy. This strategy, elements of which are also used by local authorities in Manchester, Salford, Bristol and Birmingham, has become known as “progressive procurement”.
Preston’s anchor institutions reorganised their supply chains and opened them to local competition, identifying where they could buy goods and services locally, then redirecting contracts towards these local businesses for a whole range of services, from office supplies and construction work to the provision of school meals. In many cases this involved breaking down large contracts into smaller lots, meaning that small and medium businesses, not just large multinationals, had a chance to bid for and win supply contracts. The often opaque tendering process – which could mean the process was feasible only for those with internal contacts or otherwise “in the know” – was itself simplified and advertised more widely, increasing both transparency and diversity of applicants.
Progressive procurement can also involve environmental and social considerations, focusing on social value rather than simply on bottom-line profit. This could mean requiring institutions to embed clauses in contracts that ensure the use of ethically sourced materials or sustainable energy, or to introduce hiring practices that target areas of high unemployment or social deprivation.
The central components of the Preston Model – identifying anchor institutions and redirecting their procurement processes – are part of an institutional strategy that other local authorities can choose to adopt. But there are additional aspects to Preston’s “community wealth-building”. This includes filling the gaps where no local businesses exist to bid for public contracts, through encouraging the growth of worker-owned cooperatives – both via support for start-ups in new sectors and through employee buy-outs where business owners are selling their enterprises when retiring. Preston City Council has pledged to further expand the Preston Model to create a regional cooperative bank and to engage with the Lancashire Pension Fund to invest more in the local economy.
Preston’s approach reverses decades of doctrines which prioritised outsourcing and chasing investment from large multinationals through financial incentives, rather than investing in local infrastructure and development. This offers a way of truly “levelling up” that goes beyond the government’s hollow promises. And importantly, it provides part of the answer to the undemocratic culture of cronyism that has been evident at the highest levels of government throughout the Covid-19 crisis.
Rhian E. Jones is a writer, critic and broadcaster from South Wales now based in London. She has published five books on politics, history and popular culture and is a co-editor of Red Pepper magazine. @RhianEJones
Paint Your Town Red: How Preston Took Back Control and Your Town Can Too by Matthew Brown and Rhian E. Jones is out now, published by Repeater Books.