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Public procurement is lose-lose if it excludes regional contractors

The process of public procurement in the UK has long required an overhaul, and in the South-west in particular there is a drastic need for urgent improvement.

Last week, MP for South West Devon Gary Streeter raised the issue of inappropriate public procurement of construction in the House of Commons.

He particularly referenced the regional Education Funding Agency framework for schools where there were clear indications that local procurement would deliver more cost-effective solutions.

The EFA has a four-year regional framework for the procurement of individual school projects, both new builds and refurbishments.

In July 2014, seven contractors were appointed for Lot 4 covering the seven counties of Cornwall, Devon, Somerset, Dorset, Wiltshire, Gloucestershire and Bristol (Avon).

Shocking exclusion

Astoundingly, not one of the seven companies appointed to this framework are local to the South-west, despite there being a number of outstanding construction companies in the area, many with an excellent track record for public sector projects.

That leaves leading local businesses – companies with the power to transform the economic growth of the region they are working in – locked out of the chance to win these prized public procurement contracts.

“Local companies are much more likely to understand, and wish to contribute to, the community they are working in”

The benefits of a multi-user framework agreement for procurement are well-known, and substantially reduce the administrative burden of running a full procurement procedure for every project.

But it is an insult to the region to exclude all of its own companies.

I firmly believe regionally based companies are far better placed to deliver schools successfully in an economic manner, and should not have been excluded from the EFA framework.

Local companies are much more likely to understand, and wish to contribute to, the community they are working in, as well as to hire local sub-contractors and make best use of a local supply chain, creating jobs in the area as well as boosting the local economy.

Change policy

The Department for the Environment and Rural Affairs has a strategy for buying locally; why is it not possible for the DFES to do the same for contractors?

Locally focused procurement is something all public bodies must become better at prioritising as a matter of urgency.

In a region like the South-west, our economy would be transformed if government departments, agencies, local authorities and public services were to procure locally whenever possible, especially for major projects.

This new way of procuring schools is a lose-lose system, which favours multinational and centralised national firms with no vested interest in an area, and at the expense of regional firms, who care about, and contribute to, the communities they work within.

Steve Hindley is chairman of the CBI Construction Council and chairman of The Midas Group

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