Before the COVID-19 pandemic, the Local Government Association (LGA) commissioned IPPR North to undertake an analysis of the levers councils can use to build more inclusive local economies. The Building more inclusive economies report published today, recognises that while inclusive growth strategies vary strongly across the country, there are three levers which are most prevalent, and can be viewed to some extent as a starting point:
• councils’ role as a direct employer
• councils as commissioners and procurers
• and the convening power of councils.
The report outlines that commissioning and procurement are among the biggest levers that councils have in building inclusive economies. It states that there is considerable scope for councils to influence their local economies with their spending and ways to take spending decisions to build an inclusive focus. Nearly half of all local government expenditure is accounted for by procurement (IFG 2018). In 2017/18, local government saw around £79 billion of revenue expenditure and £19 billion of capital expenditure spent on procurement (ibid). It argues that in light of COVID-19, the role of councils as economic actors will be crucial in restarting local economies. Councils’ procurement budgets are almost always the largest such local spend in any given area.
Drawing on it’s evidence base, it finds councils report that procurement teams are rightly highly risk averse and often it is difficult to encourage innovation to achieve social value and lever in the inclusive growth agenda because of real and perceived legal or financial barriers. As such, it recommends that commissioning and procurement require political leadership to drive through a focus on inclusive growth.
Commenting on the report, techUK’s Head of Local Public Services Georgina Maratheftis adds:
“This is a very comprehensive report and the vast case studies show the excellent record of local government to innovate. As place shapers, councils, as the report rightly recognises, have an even more important role in leading the way for an inclusive recovery. In particular, procurement if done well can enable innovation and stimulate markets such as govtech.”