North-south divide on contracts

MP claims ‘procurement bias’ favours firms from London and the South East

GOVERNMENT CONTRACTS have overwhelmingly been awarded to firms in London and the South East to the detriment of the North, new figures have revealed.

Labour MP Gareth Thomas has claimed there is a “procurement bias” towards the two areas in regards to the most lucrative government contracts.

Data requested from the House of Commons library by Harrow West MP Mr Thomas, and seen by The Yorkshire Post, showed how between 2017 and 2020 London received 772 out of 2,879 contracts deemed large enough to be listed in the EU’s Tenders Electronic Daily (TED) database.

Before the UK left the EU, as part of the bloc’s rules, Governmental contracts above certain values had to be published on the TED database. For public works the threshold is €5,350,000 (around £4,575,052), and for service and supplies contracts €139,000 (around £118,865).

Companies in the South East bagged 642 of these contracts between 2017 and 2020. Yorkshire firms received just 210, the East Midlands 163 and the North East only 66. Mr Thomas said the data showed there was still a huge gap between the North and South, and said this had become particularly stark during the Government’s buying of personal protective equipment during the pandemic.

But the Cabinet Office said now that the UK has left the EU, new proposals would make it easier for firms in areas such as Yorkshire to win Government contracts.

And since January this year “social value” – such as how contracts can tackle economic inequality – should be explicitly evaluated in all central Government procurement.

Mr Thomas said: “These figures demonstrate that 10 years after the Conservative government came to power there is a huge divide in which parts of England benefit from the deals Ministers do.

“The Government still has no plan to tackle the huge gap in which region of England benefits from its biggest contracts. It’s time that changed.”

In 2020 alone the figures showed 615 out of 1,162 of the contracts went to companies in London and the South East, with the other 547 being shared between the other seven regions in England.

Last year Yorkshire got 86 contracts – an increase on the 29 it had the year before.

Mr Thomas has introduced a Bill in the Commons which would require Ministers to publish more detailed data on where firms winning contracts are based, and would create a presumption in favour of British companies winning contracts.

A Government spokesperson said: “As part of our levelling up agenda, we are determined to reform the way government contracts are awarded to make sure that businesses of all sizes across the UK benefit.

“The Procurement Green Paper, which was published in December, sets out how leaving the EU provides us with the opportunity to overhaul the public procurement regulations which govern how some £292bn of taxpayers money can be spent.”

There is a huge divide in which parts of England benefit. Labour MP Gareth Thomas.

IT IS nearly six months since Chancellor Rishi Sunak rewrote the Treasury’s Green Book spending rules in order to pave the way for more public money to be spent on infrastructure investment in Yorkshire and the North.

Yet, as The Yorkshire Post and others await the first analysis of these changes, and their impact, a new opportunity is emerging for Mr Sunak, the Richmond MP, to further demonstrate his commitment to this region.

This follows publication of new evidence which reveals the extent to which Government contracts have been overwhelmingly awarded to firms in London and the South East.

House of Commons data confirms that London companies received 772 out of 2,879 contracts deemed large enough to be listed in the EU’s Tenders Electronic Daily database between 2017 and last year. In contrast, just 210 Yorkshire firms were the recipients of such deals.

Now the Government says, in its defence, that Britain has now left the European Union and that its Procurement Green Paper, published last December, does intend to make it easier for firms across Britain to apply for taxpayer-funded contracts worth nearly £300bn.

Yet, while it is Mr Sunak’s duty to ensure that public money is spent wisely, and far more efficiently than at present, it is, nevertheless, in the Government’s interests to be far more proactive when it comes to advertising such contracts and actually encouraging firms in the North to bid for them.

The benefits are threefold. First, costs here are cheaper than in London. Second, it potentially opens up new opportunities to businesses here. Finally, such a move could help to underpin a future ‘levelling up’ agenda. But the latter will only happen when Mr Sunak – and the Government – set out specific policy goals with far more clarity than the current ad hoc tokenism.