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The Importance of Procurement to City Economies

17 January 2017

As noted by Matthew Jackson in his article of 29th November 2016, procurement, as a process, “has historically been seen as something of a challenge for municipalities and other institutions within our cities, especially when it comes to linking it to the achievement of wider local economic, social and environmental benefits”. 

As systems go, it is bureaucratic, legally complex, and quite restrictive towards SMEs.  And it is to this later point that we turn our attention. 

SMEs are the bedrock of the Irish economy.  Figures from the Central Statistics Office (CSO) and available on the ISME website, tell us that there are over 235,000 SMEs in Ireland employing almost 920,000 people.  As noted in the Irish Times in December 2014, “Small and medium enterprises account for 99.7 per cent of all active business enterprises in the Republic, employ 68 per cent of the workforce and generate just over half the State’s annual turnover”.

The growing focus being placed on procurement through programmes such as URBACT is to be welcomed.  The challenges of procurement were highlighted as a key area of concern in the progression of projects to implementation phase in URBACT’s Implementation Network Call in early 2016.  Urban Innovation Partnerships are also placing a strong emphasis on procurement and wider local benefits.  And through this article we hear of the work being undertaken by the Procure Network, an URBACT III initiative being led by Preston City Council and which focuses on how the process of procurement “could be undertaken differently in cities so that the benefits it brings for local economies, business and residents could be maximised”. There are undoubtedly many good practices in train – Jackson at the outset of the article tells us of the achievements of Manchester City Council in increasing the level of procurement spend with Manchester-based organisations and SMES over the past eight years.

Under the auspices of the Procure network, partner cities are being encouraged to understand how EU and national law influences the design of their procurement processes, where their existing spend on procurement goes (i.e. into local economy or not), how they can be more innovative in terms of procurement esp. in terms of supporting social and economic development within their locales, and how SMEs can engage more effectively with the procurement processes – and be supported to bid for opportunities as they arise.

There will undoubtedly be a lot of learning for municipalities across Europe stemming from this Network – and we look forward to hearing more over the coming two years.

See Mathews full article here: http://urbact.eu/importance-procurement-city-economies

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