Businesses bidding for major government contracts will now be expected to deliver more for communities like Newcastle, as the Labour Government strengthens rules to ensure public spending creates good jobs, apprenticeships and opportunities for local people.
Under new procurement rules, companies competing for government contracts worth more than £5 million will be judged more heavily on the benefits they bring to local communities. The weighting given to creating jobs, supporting apprenticeships, tackling local skills shortages and providing work experience will double from 10% to 20%.
The reforms mean that the Government’s £90 billion annual procurement budget will do more than simply buy goods and services. It will also help create skilled jobs, support young people into work, and strengthen local economies across the country, including in Newcastle.
The changes are designed to ensure businesses winning public contracts invest in the communities they serve by creating high-quality jobs, paying fair wages, offering apprenticeships and providing work experience, particularly for young people, care leavers, people with long-term health conditions and those not currently in education, employment or training.
The Government is also cutting unnecessary red tape that has often prevented smaller businesses, social enterprises and voluntary organisations from competing for public contracts. Simplified rules and a higher threshold for additional procurement requirements will make it easier for local firms to bid successfully.
To ensure companies deliver on their promises, major suppliers will be measured against clear performance targets, with annual progress reports published to improve transparency and accountability.
First Secretary of State Louise Haigh said every pound of taxpayers’ money should benefit local communities by creating good jobs and giving young people the skills they need for the future.
Leader of Newcastle Labour Group, Cllr Ged Bell, said:
“Newcastle has incredible businesses, skilled workers and ambitious young people. These changes mean public money will do more to support local jobs, apprenticeships and training opportunities, helping ensure the benefits of government investment are felt here in our city.
“Labour is making sure government spending works harder for communities like Newcastle by backing British businesses, creating opportunities for local people and giving more small firms the chance to compete for public contracts. That’s how we build a stronger local economy and create growth that people can see in every postcode.”