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Cut-price culture shames councils

AGENDA

LOCAL government procurement is in a mess. Six years after the Government swept aside compulsory competitive tendering in favour of best value, a harmful culture of cheapest price continues to thrive.

Construction News's survey of procurement practice among local authorities makes depressing reading for contractors, not to mention the general taxpayer.

According to our survey, lowest bidders win almost two thirds of contracts worth more than £3 million. For work valued below £3 million the rock-bottom bid steals the job nine times out of 10.

This reveals a woeful lack of understanding at councils. It is widely accepted that awarding jobs to the lowest price cannot guarantee value for money.Where cut-throat bidding is encouraged, damaging contract disputes thrive and budgets fly out of the window.

This is not revolutionary thinking nor difficult for councils to grasp.Government and private sector clients have accepted this for years.Yet, in spite of rafts of research and bundles of good practice guides, a cut-price culture remains ingrained in local government.

Some local authorities are sure to argue that quality criteria are considered and lowest price happens to win after these have been taken into account.

The councils that failed to respond to our survey have done so for reasons best known to themselves. But the statistics derived from 10 per cent of the country's local authorities show lowest price is their chief concern.

This approach short-changes local communities and rewards those who adopt an outdated approach to contracting.

The law says councils must select contractors using best value criteria.The evidence - both factual and anecdotal - suggests this is not happening.

It is about time the Office of the Deputy Prime Minister conducted a full inquiry to restore confidence and ensure everybody is getting value for money.