§ Baroness Miller of Chilthorne Domerasked Her Majesty's Government:
Whether Section 17 of the Local Government Act 1988 is preventing local authorities from pursuing a local purchasing policy with regard to food, and whether the restrictions that seem to apply to local authorities also apply to other bodies such as National Health Service trusts. [HL2866]
§ Lord WhittyThe Government recognise that local authorities may wish to consider adopting local purchasing policies but it is for them to judge how far this can be done within existing UK and EU legislation.
Local authorities are limited in their scope to use procurement to pursue local purchasing policies by Section 17 of the Local Government Act 1988, which sets out a number of "non-commercial matters" which must be excluded from the contract process. The 1988 Act does not apply to National Health Service trusts. 43WA However, a more significant dimension is the EC Treaty and the European Directives for Public Procurement. These apply to all public contracting bodies, including National Health Service trusts.
EC procurement directives, which are implemented in the UK by various public procurement regulations, prohibit discrimination on the grounds of nationality. To bring local purchasing considerations into the contracting process may well conflict with these wider requirements. In addition to requiring contracts to be awarded on the basis of non-discrimination, transparency and competitive procurement principles, the EC Directives/UK Regulations set out detailed procedures and criteria for the selection of tenderers and the award of contracts. The selection criteria relate to the financial standing, technical capacity and personal standing of the companies involved and the award criteria cover what is necessary to deliver value for money in performing the contract.
However it is open to local authorities to build non-discriminatory quality factors into contract specifications for the procurement of goods and services under Best Value and to take account of this in the evaluation of bids. They could also assist local suppliers to tender for work by, for example, holding briefing sessions which explained the way that the authority tendered, how and where it advertised forthcoming work and how firms should respond to those requests.