Mersey firms miss out on £400m of council contracts

List obtained by LBN shows more than £400m of Liverpool council contracts or framework agreements have gone to firms outside of Merseyside in 2020. Tony McDonough reports

Liverpool Town Hall
Liverpool City Council has awarded more than £400m of contracts to outside firms

 

More than £400m worth of contracts awarded by Liverpool City Council so far in 2020 have gone to companies outside of Merseyside.

A list obtained by LBN reveals that out of 50 contracts given out to firms by the council this year, worth a total of £118m, just four went to businesses based in the Liverpool city region.

And out of 18 companies on two council framework agreements, a £280m highways framework and another worth £25m for school cleaning, just two of them were Merseyside firms. One council insider told LBN that the figures “betray” Liverpool Mayor Joe Anderson’s commitment to local jobs and apprenticeships.

However, the city council says the list does not reflect the full range of contracts handed out in 2020. It says that in the last financial year 43% of contracts went to Liverpool firms – rising to 55% when the Liverpool city region is included.

For councils to give work to companies outside of their areas, isn’t unusual. Local authorities are obligated to seek best value on contracts and have to advertise them widely. It works both ways as Mersey companies themselves often bid for, and win, public sector contracts in other parts of the UK.

Liverpool city region is also short of top tier contractors who can take on large infrastructure projects such as the £47m Liverpool City Centre Connectivity Programme which is remodelling major roads across the city centre.

But the awarding of other contracts may raise more questions. There are two contracts, worth more than £1m combined, for PPE during the pandemic, awarded to companies in Manchester and Bexley in London. There are a number of Merseyside firms producing PPE.

And £100,000 went to a public relations firm based in Wandsworth in London. There are a plethora of PR businesses in the Liverpool city region and across the North West.

The Strand
The Strand in Liverpool is undergoing a £22m transformation

 

Given Mr Anderson’s repeated commitments to do as much as possible to make sure local companies benefit from council procurement, the figures for this year may come as a surprise to many. Even more so given the severe impact COVID-19 has had on the Liverpool city region economy.

The council insider added: “At a time when Liverpool’s economy is potentially at its most fragile, it seems that some very senior city council officers are almost committed to making the state of affairs even worse.

“The fact that contracts have been awarded to companies outside of our city openly betrays the Mayor’s commitment to local jobs and apprenticeships. It is scandalous that a chief executive and officers are able to get away with this.

“Mayor Joe Anderson and members of the cabinet will be rightly furious, and an independent investigation should now get underway to get to the bottom of these issues.”

In a statement, Liverpool City Council told LBN: “During the last financial year, 43% of city council contracts have been awarded to Liverpool businesses. This rises to 55% in the city region and 75% for businesses based in the North West.

Liverpool City Council is deeply committed to supporting local supply chains and using its contracts to stimulate local employment. More than 440 people have been employed as a result of council contacts in 2019/20, with a further 300 apprenticeships created. For this financial year, our suppliers predict 985 jobs will be created as a result of winning their contracts.

Tenders are evaluated in line with national and European law and those that best meet the criteria, win the contracts. In some areas, the city also may not be home to a business that has the specialism or size of workforce required for a particular job.

More than £1m in PPE contracts has gone to firms outside of Merseyside

 

“But equally it is common for larger companies outside the city to have local suppliers as well as a satellite office, either in the city, or region, employing Liverpool residents. The Mayor has instigated a review of our approach to social value to ensure we are in line with best practice and in the best interests of our local economy.

Liverpool City Council maintains regular updates with various business networks on upcoming tenders and schemes and is currently pursuing a £1.4bn programme of investment to stimulate the city’s economy and has identified more than 40 major projects which will employ thousands of people.

The council is also at the forefront of supporting local businesses throughout the Covid pandemic and has helped distribute more than £100m to companies in the city’s retail, hospitality and tourism industry and has vigorously lobbied the Government for additional support, such as business rates and rental payment extensions and the extension of the furlough scheme.”

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