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The top Westminster research centre, The Adam Smith Institute (ASI), has said that little-known public procurement rules are costing taxpayers billions, and hampering much-needed economic growth.
New research by the think tank has revealed that a “woke” law that prioritises “social values” over value-for-money is costing the British taxpayer billions more than equivalent economies.
Public procurement costs the Treasury coffers £379billion a year, well above the OECD average.
The ASI’s new paper – The Price of Everything, the Social Value of Nothing – has focused the spotlight on these little-known rules holding back the British economy.
A law introduced by the Coalition Government in 2012 called The Social Value Act proscribes thirty pages of criteria that businesses, regardless of their size, must adhere to.
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Rather than civil servants awarding contracts based on an obvious value-for-money basis, firms must instead be able to prove their business tackles economic inequality, dedicates staff to “protect and improve” the environment, and uses costly cybersecurity licensure – even for non-tech firms.
The latest Social Value model used by the Government sets out five primary themes that must be “tackled” through procurement: Covid-19 recovery, economic inequality, climate change, equal opportunity, and well-being.
The ASI has now said the rules must be scrapped, in order to save taxpayers large amounts of cash and get the economy growing in the most efficient way possible.
Maxwell Marlow, the report’s author, says current rules unfairly disadvantages small and medium-sized British businesses, adding costs and delays on to suppliers, and gives no accountability to taxpayers.
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Mr Marlow slams the rules as smelling “of a cynical attempt to change businesses to get its ‘values’.”
Recently the Nigel Farage Coutts de-banking scandal highlight the growing wave of “woke” values in the British private sector.
Mr Marlow added: “Public Procurement makes up over 30 percent of the Government’s budget, but this does not mean it should have the power to micromanage businesses under a thin political veneer.”
“Businesses know what is best for them and their shareholders, and should not have to bend to the political whims of ineffective legislation, in order to deliver value for the taxpayer.”
Tory MP John Penrose said that instead of overpaying Billions for woke procurement contracts, “we need the billions spent on public procurement to give citizens and taxpayers the best possible public services”.
“This report asks whether the idea of ‘social value’ lets public officials and ministers off the hook, giving them a handy fudge factor which can slant deals towards second-or-third best providers instead. It’s a sobering question that every serious political party should answer.”
The ASI says the 2012 Social Value Act should now be retracted, and the Government should immediately return to a system whereby the most economically advantageous tender is given the contract.
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