Will EU Procurement Rules Prevent Councils from Choosing Local Suppliers?

New EU procurement rules could make it almost impossible for councils to give preference to local suppliers, according to the Local Government Association (LGA).

Councils want more freedom to award contracts to local suppliers and also to raise the £170,000 procurement threshold (above which local government has to advertise contracts across the EU).

The EU tendering process takes months to complete and increases costs – to both buyers and suppliers. However, proposed EU procurement rules could make it almost impossible for local authorities to give preference to local suppliers. Neighbouring councils looking to reduce costs by sharing services will also be forced into time-consuming and expensive EU tendering.

Small to medium-sized businesses get less than 14% of central government’s procurement budget while councils spend 49% with SMEs. The LGA believes this would increase if councils were allowed to target procurement at a local level – promoting growth and job creation in their area.

Cllr Peter Fleming, Chairman of the LGA’s Improvement Board, said: “We desperately need the Government to take the fight to Brussels on our behalf and promote a re-write of the rules which are stifling public service innovation and limiting councils’ ability to promote growth in their area.”

It is interesting to note that according to a consultation document on a procurement reform Bill published by the Scottish Government, SMES supply 78% of public sector contracts in Scotland! One wonders why there is such a big difference when all EU countries are governed by the same EU procurement rules. Answers below please…

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