22-02-2025
Focus on diversity and net zero if you want government contracts, firms told
Companies have been told to focus on net zero and diversity goals if they want to win public contracts under the Government's new procurement rules.
In a new guide to procurement published this month, ministers have urged firms to show how they will help achieve Sir Keir Starmer's 'five missions' and provide 'social value' when bidding for public contracts.
The guide asks companies to set out how they will 'strengthen community cohesion', 'remove barriers to entry for young people and under-represented groups' and help with 'accelerating net zero' when carrying out projects for the government.
Businesses are also encouraged to focus on 'creating opportunities in areas of deprivation' and demonstrate the 'highest standards' of 'environmental sustainability'.
Critics said the new guidelines are an example of 'eco zealotry' and 'woke virtue signalling' trumping value for money.
The National Procurement Policy Statement replaces a guide drafted under the previous Conservative government as part of its Procurement Act 2023. The earlier guide did not mention net zero and explicitly discouraged 'onerous requirements' for diversity reporting on companies bidding for government work.
The latest guidelines also urge government departments to funnel more money to charities and NGOs as part of the new focus on 'social value'.
Sir Jacob Rees-Mogg, the former business secretary, said: 'The intention of the Procurement Act 2023 was to maximise value for money for taxpayers. When the public finances are under such strain trying to use it for woke virtue signalling is especially foolish and potentially unlawful.'
Andrew Bowie, the shadow Scottish secretary, said: 'It seems this government is more concerned with their eco-zealotry than delivering value for money for the taxpayer.
'By enforcing these mad targets on companies, the British public will face higher bills, and worse services – just to fuel Ed Miliband's own ego and ideology.
'After their disastrous Budget, the Government should be prioritising value for money over eco-zealotry rather than taking another step in the wrong direction and lumbering costs on tax payers.'
Lord Kempsell, founder of anti-waste group UK DOGE, said: 'It may be well intentioned but this kind of overly bureaucratic layering will slow down vital procurement and just backfire – it shows why we need UK DOGE right now – the crack team is ready to go, Labour should call us at once.'
The procurement process became controversial during the pandemic when the government was accused of cronyism and of wasting billions of pounds of taxpayers money.
The Conservatives overhauled procurement in 2023 with a Procurement Act that aimed to make the process simpler and more transparent.
In September 2024 the Labour government announced that it would be introducing a new National Procurement Policy Statement because the previous one 'does not meet the challenge of applying the full potential of public procurement to deliver value for money, economic growth and social value'.
A Government spokesperson said: 'Our entire focus is on growing the economy, creating high-quality local jobs, driving innovation and opening up opportunities for businesses.
'The National Procurement Policy Statement and Procurement Act does not place any unnecessary burdens onto business, instead it simplifies the procurement process, removing bureaucratic rules and regulations and re-focusing the £400 billion spent each year in procurement to deliver the Plan for Change.'
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