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Posted: Mon 6th Jan 2025
Labour MP Sarah Champion has reintroduced to Parliament a Bill aimed at awarding more public contracts to British businesses, including farmers, manufacturers and small firms.
Originally introduced in March 2024 but halted due to the general election, the Public Procurement (British Goods and Services) Bill would make amendments to the Public Services (Social Value) Act 2012 and the Procurement Act 2023 to encourage greater uptake of British products in UK government contracts.
The Bill will receive its second reading in Parliament on 24 January.
In her speech when she originally launched the Bill last March, Champion said:
"Every year, the UK government spend more than £300 billion on public procurement, which accounts for almost a third of all public expenditure.
"However, despite this huge figure, the Spend Network's analysis found that big corporations win 90% of the contracts that are deemed suitable for small and medium-sized businesses. As a result, SMEs are missing out on around £30 billion-worth of public contracts annually. That is £30 billion that could be going to British businesses.
"SMEs are the beating heart of our economy, accounting for 99% of businesses in the UK and 61% of employment, which equates to 16.7 million jobs. It is therefore shocking that they are consistently missing out on so many suitable public procurement contracts.
"In addition, a worrying number of contracts are awarded to foreign suppliers. Research from Tussell found that in 2020 alone the public sector spent £18 billion with overseas suppliers rather than supporting their UK counterparts.
"The Public Accounts Committee's report, Competition in public procurement, published in December, concluded that the government 'has not demonstrated that it has consistently used its purchasing power to support local and national policies and objectives, or to drive healthy and competitive markets, including buying from SMEs.'
"It also found that the government has 'not been fully capturing data on procurement, much less using analytics from collected data to draw insights on how competition in public procurement is operating within government and give context to purchasing decisions.'
"That has to change, and my Bill can do that."
The Procurement Act 2023 will come into force on 24 February. It will introduce several reforms to procurement rules including changes aimed at reducing red tape so more small businesses and social enterprises can compete for and win public sector contracts.
In a press release on her website, Champion said that if adopted, "the Bill would support the government's aims, by increasing the importance of social value during the procurement process, improving transparency around contracts awarded to SMEs and increasing the visibility of British food procured by the public sector".
