EU rules are obstructing councils from saving money

The cost of our EU membership in terms of our basic membership sub is £14 billion a year.  However, the true cost, including the cost of complying with all the red tape, is much higher. Both our contribution to the EU budget and the burden of regulation are going up. One example of the hidden cost is the way EU procurement rules thwart efforts by local councils to get value for money. The Local Government Association is not the most obvious Eurosceptic. Yet even it is becoming exasperated. This is a straw in the wind. The LGA's instinct will have been to schmooze with the EU, not to pick a fight.

"EU rules choking off councils' money saving efforts," is the headline of the LGA press release.

It reports:

Tortuous EU procurement rules, which are choking off opportunities to save taxpayers' money and promote local growth, are in danger of becoming even more convoluted and costly, council leaders warn today.

The Local Government Association, which has produced a Procurement Pledge which commits local and central government to work more closely on these issues, is concerned that moves are afoot which could make it virtually impossible for councils to give preference to local suppliers, and will force those wishing to pool services with neighbouring local authorities into an unnecessarily lengthy and costly EU-wide tendering process.

The LGA is concerned that instead of addressing the problems inherent in the current system an up-coming revision of procurement regulations is in danger of making them worse. It is calling on the Government to go into battle for the UK and ensure the re-write of the European directives delivers for British council taxpayers.

It is calling for a "significant increase in the ludicrously low £170,000 procurement threshold above which local government has to open out contracts to the entire EU." That process causes several months of delay as well as increasing costs. 

Cllr Peter Fleming is Chairman of the LGA's Improvement Board and the Conservative leader of Sevenoaks District Council.

He said:

"Ridiculous EU procurement rules are making it harder for councils to save money by sharing services, and opportunities to promote local jobs and economic growth are being missed. Opaque Internal Market regulations, which fail to distinguish public sector goals from the private sector's profit motive, are standing in the way of councils delivering better value for money to taxpayers.

"We desperately need the Government to take the fight to Brussels on our behalf and promote a re-write of the rules which are stifling public service innovation and limiting councils' ability to promote growth in their area.

"Local authorities have the best record on procurement in the public sector, spending nearly half of procurement budgets with small to medium-sized businesses and teaming up with each other to get lower prices on everything from office paper to complex IT systems. Many would dearly love to be able to use more of their spending power to boost the local economy too. It is crucial that the new rules, expected to be introduced in a few years, clearly address these
issues."

The LGA gives some examples of the sort of savings the EU make more difficult. Cambridgeshire and Northamptonshire county councils have saved £3.8 million on various shared services. Devon and Somerset Fire and Rescue Authority was established by the Somerset Fire Service being extricated from Somerset County Council in order to combine with Devon Fire and Rescue Service. It has so far delivered savings of £5.8 million.

Shared services between Herefordshire Council, Herefordshire Primary Care Trust and Wye Valley NHS Trust – Hoople Ltd has so far saved £620,000.

Lincolnshire County Council, six district councils and a borough council, combine procurement and have saved £10.4 million.

Vale of the White Horse and South Oxfordshire district councils are sharing officers and running joint services and so far these arrangements has saved £10.13 million.

The LGA believe that EU rules stop millions more being saved. Good luck in getting them relaxed. Maybe there will be some temporary respite. Yet overall the burdens from the EU keep growing. Isn't it blindingly obvious that our membership of the EU is a disaster for British local government - just as it is for the rest of us?