This is big. The Government is going to strip back social value procurement rules, and end Everythingism in procurement. This is a great step towards making procurement markets much better and more competitive. It’s been a big topic of our research at Re:State in the last year, so let me explain: - When government puts out a tender for bids, 10% of the ‘marks’ go to companies who can show they meet various ‘social value’ rules. There’s a whole gamut of guidance which requires them to prove they are things like carbon-neutral, moving jobs outside of London, revitalising high streets, DEI, and many more. These might all be important objectives to the government, but furthering them all through procurement distracts companies from delivering the core purpose of the contract, and adds cost – a phenomenon we call ‘Everythingism’. It’s particularly bad for small companies who get priced out of selling to the public sector because the overheads become so high, so they don’t compete at all – making the market much more concentrated in the long run. 20% of contracts government lets have one or even zero companies bidding for them – a nightmare for the taxpayer. - It looks like the Government are going to start cutting social value objectives and focus the list on these categories: higher paying jobs, apprenticeships, and routes for NEETs into work. This is a big improvement, not just because the list is shorter but also because these are easier objectives for companies to target, measure and quantify than the vaguer goals which are coming off the list. - They are also planning to entirely remove social value requirements from contracts under £1 million in value is very welcome. As we called for in our paper ‘Procure and simple’, giving small companies routes to bypass social value to win work is essential – the system is just too intensive for them to get work at that small scale. - However, it also looks like they’re also considering boosting the weighting towards social value objectives on contracts worth above £5 million, from the 10% of marks they currently get in a tender to 20%. That would be a mistake, and one which will mean more contracts are delivered at lower quality and higher cost – the two most important bits of what procurement should deliver. But if the set of metrics that 20% will be awarded on are significantly shortened, then that does slightly mitigate the impact. But I still hope this part of the proposal doesn’t make it through to the policy changes in the autumn. - Interestingly, the Cabinet Office are also asking departments to draw up a list of 10 high-growth companies to target for more contracts. We called for this approach in ‘Procure and simple’ because the distortions against startups and scaleups entering the procurement market are so extreme that I think you do need a counterbalance, and to focus on ways you give more contracts to them for innovative new products. The biggest problem with procurement policy is that it’s entirely ‘buyer-led’ – contracts which government puts out to solicit bids for. There’s basically no route for a company offering a genuinely innovative new product to come and sell it into the public sector – which massively hampers startups and scaleups. There’s plenty more they could do to eases the path for high-growth companies – for example, more targeted direct awards for innovative products, or exempting them entirely from social value weightings on contracts of any value (both possible under the current Procurement Act). I hope they take this seriously. Procurement rules govern over £300 billion of the economy. There’s a huge opportunity to free up the red tape stops British companies growing, and also stops them becoming great exporters to other governments, because they can’t even get a foothold working for their own Government here at home. @LOS_Fisher

I'm a fan of govt experimentation, but I don't think this is a very good idea. The problem isn't that grocery stores are greedy. The problem is that food got expensive. The Producer Price Index for all foods—avg price paid to domestic producers for food—jumped 30% between 2021 and 2023. Since then, grocery prices have continued to climb, in part due to increases in wages and housing costs. Without strong evidence that NYC bodegas and groceries stores are colluding to protect double-digit net profit margins, the reasonable assumption is that these businesses are operating with <3% margins after rent, labor, and utilities. So, a plan to sell some food with a 30% discount seems like a plan to create very long lines to buy a very small number of subsidized groceries. We'll see how that goes. But I don't think literal bread lines are the image that a socialist mayor wants to cultivate. As Keynes said in 1926, "the important thing for government is not to do things which individuals are doing already ... but to do those things which at present are not done at all." Bodegas are something we're doing already. Large grocers like Trader Joes are really really good at managing supply chains and keeping prices down, whatever you may think of their other policies. I do not trust a busy municipal govt trying to do 1,001 things to be better at groceries than grocers. But I guess we'll find out.