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Charles Levy
Senior Economist
Charles  Levy

British Procurement for British Firms?

Authors: Charles Levy Charles Levy

05 July 2011

Last week Ian Duncan Smith explained to a Spanish audience that British businesses should do more to hire British, rather than foreign workers (as commented on by my colleague Andrew Sissons). Yet today it emerged that the government is failing to direct its own funds towards British firms – Bombardier have blamed their decision to scale back the Derby plant on the decision by Thameslink to purchase trains from a German consortium. It seems that the government wants British firms to ignore the single market and hire British workers, but isn’t willing to play games with public procurement to get round the same single market rules, or take risks with public services to achieve the same outcomes.

Our research, Making the most of public services, showed that we really do need to be thinking more imaginatively about how we support innovation and drive growth through public procurement supply chains. There is certainly room for pragmatic, or even slightly Machiavellian approaches to procurement that would favour British enterprises while still driving competition. This is much more likely to get British people into jobs than criticising the free movement of workers across the EU.

It is positive that the Business Secretary has now committed to think more cunningly about procurement and in particular to “work with industry and its representative bodies to support the UK rail supply chain to maximise business opportunities identified through contracts like the Intercity Express Programme, Thameslink and Crossrail.” But, it is frustrating that this has come after a full year in office, a period in which there has been a review of the major items of public procurement.