Fri. Dec 3rd, 2021

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Give them to the North and Midlands! PM told to give contracts to Red Wall companies

3 min read

Boris Johnson facing 'disappointed' red wall MPs says Watt

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The influential Centre for Social Justice (CSJ), chaired by former conservative leader Sir Iain Duncan Smith, has called on the Prime Minister to focus its contracts with private companies in areas like the north of England and Midlands which have lost out. The report – entitled Spending It Better – points out that each year the Government signs off almost £300 billion worth of private contracts but while Britain was in the E it had to have an open competition for companies across Europe.

In one infamous case Derby based Bombardier missed out in 2013 on the £1.4 billion contract to build Thameslink trains with the German firm Siemens winning the deal leading to the loss of hundreds of jobs in the East Midlands.

With Brexit achieved the CSJ argues that the awarding of contracts can be focussed on areas like the former red wall seats where Mr Johnson has appointed Michael Gove to deliver his levelling up agenda.

Sir Iain, a leading Brexiteer in the parliamentary party, said: “This new report makes it clear that it is in the UK Government’s hands to ensure that the hundreds of billions of pounds that is spent on procurement is directed towards helping British companies in Britain and ensuring that those areas of the country that most need investment receive it, rather than foreign-owned firms.”

The CSJ’s chief executive Andy Cook added: “This is a real opportunity to use existing government spending in a way that benefits the areas and communities that need it most. 

“By spending it better, we can drive up jobs and opportunities in places where employment is currently low. If Brexit was about taking back control, we now have an opportunity to put that into action.  

“The Government should adopt a formal principle of public money for public good, and use its enormous spending power to bring much needed investment into Britain’s most left-behind communities.”

The report notes that outside the EU, Britain can set its own rules free of Brussels interference meaning that ministers have the scope to insist that orders placed by Whitehall, government agencies and local authorities must go to companies operating in the poorest parts of the country, such as the north east and the north west – home to many of the so-called Red Wall seats that switched from Labour to Conservative at the last election.

The UK government spends around one-third of all its annual expenditure on contracts to private companies, amounting to around £290 billion per year, more than twice the total annual NHS budget, more than five times the size of the defence budget, and greater than Britain’s total expenditure on social security, including the state pension.

The money spent on procurements goes to private suppliers of vital goods and services to the UK government: building schools and hospitals, running prisons, cleaning and maintaining public buildings, constructing and maintaining roads and rail rolling stock, running social care facilities, providing catering and other services for public institutions, and supplying our emergency services with vital equipment.

The think tank warns that recent controversies surrounding the awarding of PPE contracts, and the problems with UK supply chain resiliency exposed by Covid-19, have thrown into sharp relief the urgent need to get public contracting right.

Although the Government published a Green Paper outlining ideas for reform in December 2020, the CSJ argues that it should go further by linking its procurement strategy explicitly to its “levelling up” agenda, prioritising the award of contracts to areas with high levels of economic deprivation.

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