The Future of Local Government Isn’t Bigger Contracts. It’s Bigger Public Value.
Britain has spent decades trying to improve public services by making procurement bigger.
Bigger contracts.
Bigger providers.
Bigger commissioning frameworks.
The assumption has been that economies of scale automatically produce better outcomes.
Yet despite increasingly sophisticated procurement systems, many of the challenges facing our communities remain stubbornly unchanged. Youth unemployment persists. Inequality grows. Local high streets struggle. Digital exclusion continues. The climate emergency accelerates. Public trust weakens.
Perhaps we have been asking the wrong question?
Instead of asking who can deliver a service most cheaply, we should be asking who creates the greatest long-term value for a place.
Economist Mariana Mazzucato has argued persuasively that governments should focus on creating public value rather than merely correcting market failures. I believe this principle has profound implications for local government.
Civil society organisations should no longer be viewed simply as grant recipients or contract providers.
They should be recognised as producers of public wealth.
That wealth is measured differently from conventional market economics.
It is measured through stronger neighbourhoods.
Lower unemployment.
Reduced crime.
Cleaner environments.
Better mental health.
Greater social cohesion.
Improved opportunities for children.
These outcomes generate enormous economic value even when they never appear on a balance sheet.
At Action West London we see this every day.
Our Circular Economy programme begins with something remarkably ordinary: unwanted electrical equipment.
Working with local authorities and the West London Waste Authority, we recover electrical items that would otherwise become waste.
Some are donated to residents experiencing digital exclusion.
Others are refurbished and sold.
The proceeds are reinvested into accredited Green Skills training, enabling unemployed residents to learn electrical repair while reducing carbon emissions and extending the life of valuable products.
A single intervention creates environmental, economic and social value simultaneously.
Waste becomes an asset.
Revenue funds training.
Training supports employment.
Employment reduces poverty.
Repair cuts carbon emissions.
Communities become more resilient.
The value remains in West London.
Contrast that with many traditional procurement models.
Large national organisations secure contracts.
Delivery is subcontracted locally.
Management fees remain centrally.
Corporate overheads are recovered.
Financial value leaves the community.
Even where outcomes are delivered successfully, much of the economic benefit no longer belongs to the place that generated it.
This is not an argument against larger organisations.
Many perform excellent work.
It is an argument against systems that routinely extract value from local economies instead of building it.
Local government possesses an extraordinary opportunity.
Procurement should become an instrument of economic development rather than simply a mechanism for purchasing services.
Every contract represents an opportunity to strengthen local skills, local employment, local supply chains, local environmental outcomes and local democratic participation.
This is where devolution becomes especially important.
Listening to Andy Burnham’s recent reflections on the future of English devolution offered genuine optimism.
But meaningful devolution cannot end with metro mayors.
Nor should it stop at local authorities.
True devolution means enabling communities themselves to become partners in creating public value.
Councils should remain democratically accountable.
Civil society should become financially stronger.
The two are complementary, not contradictory.
When local charities build local wealth, democratic institutions become more effective because they gain trusted partners embedded within communities.
The alternative is to continue measuring success almost entirely through financial efficiency.
Some programmes will never generate commercial returns.
Supporting children in care.
Reducing youth violence.
Helping refugees integrate.
Building community cohesion.
If these interventions improve lives while reducing future public expenditure, they should not be dismissed because they fail a narrow commercial test.
That is not market failure.
It is successful public investment.
The next chapter of English devolution should therefore be about more than transferring powers.
It should be about transforming how value itself is understood.
The question is no longer simply who delivers public services.
It is who builds stronger places.
When local organisations create economic, environmental, democratic and social value that remains rooted within their own communities, local government becomes stronger, not weaker.
That is the real promise of devolution.
And it is one worth pursuing.