The Parliamentary Under-Secretary of State, Ministry of Housing, Communities and Local Government (Baroness Taylor of Stevenage) (Lab)

My Lords, this order delivers on the Government’s commitment to build a stronger economy in all parts of the country. It gives local authorities in England the tools they need to support local and UK-based businesses and to strengthen local communities through the power of public procurement. The order enables local government authorities to reserve public procurement competitions for below-threshold contracts to suppliers based within the UK or their local area. Below-threshold contracts are those valued below the financial thresholds set out in Schedule 1 to the Procurement Act 2023 and which are subject to a much more limited set of rules than contracts valued above the thresholds. Those thresholds are set to align with the UK’s international obligations on public procurement. These may be lower-value contracts, but they matter enormously. Between February and November 2025 alone, they accounted for over £1 billion of spend and represented almost two-thirds of the contracts awarded by subcentral authorities—I think that is Civil Service-speak for local authorities. Currently, local authorities are prevented from considering supply location when carrying out procurements by Section 17(5)(e) of the Local Government Act 1988. That provision was enacted to prevent politically motivated boycotts of foreign countries through procurement—an essential safeguard that this order fully maintains. The order permits this restriction to be set aside only when authorities reserve competitions for below-threshold contracts to either UK-based businesses or to businesses based in a defined local area. Authorities cannot target specific countries, and political boycotts remain unlawful. Before bringing forward this legislation, we listened carefully to local authorities. The previous Government consulted on a similar proposal in 2023, which received strong support in principle. However, authorities were clear that the proposed approach then—limiting reservations to a single county or a single London borough—was too restrictive. It was unworkable for combined authorities spanning multiple areas, for councils procuring jointly across boundaries and for parish councils. This Government have taken a different approach. The order provides the greater flexibility that authorities asked for by allowing them to set the local area as their own area or the entire county or borough within which they are located, or to extend it to include any bordering counties or London boroughs. This matches the reality of how local government operates. Economic geographies do not stop at administrative boundaries. Authorities can also combine this geographic flexibility with existing powers to reserve contracts to small and medium-sized enterprises and voluntary, community and social enterprises. This means that an authority could reserve a contract to local SMEs or to UK-based social enterprises, maximising flexibility to support their communities in the way that makes the most sense. Transparency remains paramount. When authorities use these powers and advertise the opportunity, they must clearly state in their procurement advertisement what area the competition is reserved to. The order also amends the Procurement Regulations 2024 to require that authorities state the relevant area in any below-threshold tender notice that is published. Suppliers will know up front whether they are eligible, and the public can see how their local authority is using its powers. Statutory guidance has been published to support implementation and was prepared in consultation with the Local Government Association. The broader policy of enabling authorities to reserve competitions for below-threshold contracts had cross-party support during the passage of the Procurement Act. Labour welcomed it in opposition and local government has asked for it consistently. The order empowers local authorities in England to support local economies, strengthen UK businesses, and create opportunities for SMEs and social enterprises, all while maintaining essential safeguards against political boycotts. I beg to move.