UK Overhauls £90bn Public Contracts: Job Creation Takes Priority Over Green Targets

In a significant policy shift, the UK government is overhauling its £90bn public procurement system to prioritize job creation over environmental and social targets. The move, announced by Prime Minister Andy Burnham, aims to tackle the youth unemployment crisis by requiring firms bidding for government contracts to demonstrate their commitment to creating jobs and addressing local skills shortages.

Key Changes to Procurement Rules

Under the new rules, the weighting for community benefits will double from 10% to 20% for contracts worth £5m or more. However, the focus shifts from measures like equality, diversity, and net zero to job creation. Bidders will earn extra credit for:

• Creating local jobs paying above minimum wage
• Offering training to fill local skills gaps
• Providing 45-day work experience placements for young people

Government's Rationale

First Secretary of State Louise Haigh criticized the current system as a "tick-box exercise," stating, "Every pound of taxpayer money should be spent in a way that benefits local communities—creating good jobs and giving young people the skills they need for the future." The new model will apply to both British and international firms.

Cabinet Office Minister Mark Ferguson emphasized that businesses securing government contracts "have a responsibility to give back," adding that they will have to create more local jobs and opportunities for young people.

Concerns from Environmental Groups

However, the plans have drawn criticism from green groups. Ami McCarthy, head of politics at Greenpeace UK, argued that protecting the environment and helping young people into work are "mutually beneficial and one shouldn't come at a cost to the other." They stressed that companies should be held accountable with environmental targets to achieve a better future without leaving young workers behind.

Youth Unemployment Context

The policy comes as Office for National Statistics (ONS) figures show more than a million people aged 16 to 24 are currently not in education, employment, or training (NEET). Burnham previously used a similar initiative during his tenure as Mayor of Greater Manchester, which saw a rise in youth employment.