Net Zero to be scrapped from procurement rules in favour of jobs-focused 'social value'

Net Zero will be scrapped from Britain's procurement rules in favour of a new "social value"-based system.

Louise Haigh, effectively serving as Andy Burnham's deputy while the Prime Minister is on holiday, has said the Government will scrap its list of demands for how procurement works.

Ms Haigh said public procurement had tried to "tick too many boxes" for too long.

"If you prioritise everything, then you’re prioritising nothing," she told the Financial Times.

The previous rules, set to be replaced in January, had included "a whole gamut of conditions around Net Zero, around the environment", Haigh said.

"There were things that I think a lot of businesses would have struggled to prove, like tackling domestic abuse and improving high streets. It became quite amorphous," she added.

The Cabinet Office's new "social value" model will require both British and international firms to prove they are creating jobs and opportunities in the UK.

Social value's weighting will double from 10 to 20 per cent for contracts worth £5million or more under the proposed model.

Guidance is set to be published in the autumn, and the new model will come into effect from January.

Haigh said the Government would be "stripping back" social value, adding that the £90billion spent on procurement should help "communities" and the economy.

The result of the "amorphous" old rules was that "certain players could really game the system", she added - with small and medium-sized businesses "crowded out".

More credit is set to be given to companies which create local jobs that pay above minimum wage.

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But Robert Jenrick slammed the proposed changes, saying a Reform UK Government would have just two "simple tests" for procurement: "value for money" and "backing British businesses".

"We don't need more complex rules for Government contracts," Reform UK's Treasury spokesman said.

"Currently companies have to prove how they will reduce their emissions and promote DEI.

"The social value test created by David Cameron which has underpinned all this must be scrapped. We should only care about value for money and backing British businesses."

Under the current social value system, prospective contractors must prove their company fulfills criteria which tackles at least one of six Government "missions", including "make Britain a clean energy superpower", "take back our streets", and "kickstart economic growth".

Ms Haigh and Chancellor John Healey are set to write to ministers urging them to identify firms which could be granted further Government contracts in order to "back British jobs and skills not just 'where possible', but by design".

They will be told to "outline immediate departmental changes" to bring in the new approach, confirm how much of each department's procurement spending goes to British suppliers, and outline their plans to increase this share, according to the FT.

Each minister has been told to drum up five announcements to support the new agenda and highlight the "top three non-fiscal blockers" to it by August 17.

The Prime Minister previously said Labour would change procurement rules to prioritise "social value" in an effort to improve young people's employability.

Mr Burnham told a podcast last week he aimed to change public procurement to reward companies which offer 45-day work placements to 16 to 18-year-olds in a bid to curb young people not in education, employment or training (Neets).