Blast furnaces at British Steel's site in Scunthorpe, northern England. Photograph: Darren Staples/ReutersBlast furnaces at British Steel's site in Scunthorpe, northern England. Photograph: Darren Staples/ReutersBritish suppliers to be prioritised for contracts in sectors vital to national securityPolicy brought forward as Middle East war highlights fragility of global supply chains
British suppliers will be prioritised for public contracts in shipbuilding, steel, AI and energy infrastructure under new guidance marking them out as sectors vital to national security.
Departments will also have to either use British steel or justify sourcing it from overseas, under the rules announced by the government.
The policy was already in the works but has been brought forward as the war in the Gulf and resulting shocks highlighted the fragility of global supply chains.
Also, a Public Interest Test will oblige departments to assess whether outsourced service contracts over £1m could be delivered more effectively in-house. The test will cover more than 95% of central government contracts by value.
Chris Ward, a Cabinet Office minister, said: “These reforms are about using the full weight of government spending to support British jobs, protect our national security and grow our economy.”
The new policies come after the publication last June of the National Security Strategy, which sought to align national security with economic growth and build the resilience of British supply chains.
Britain is still subject to obligations such as the Agreement on Government Procurement (GPA) – World Trade Organisation (WTO) rules intended to open up procurement in signatory countries.
However, national security exemptions are being used to implement the rules, which come after consultations.
The government said there will be clear guidance for departments to protect the UK’s economic security and build resilience in four sectors: steel, shipbuilding, AI and energy infrastructure
Larger departments spending more than £100m a year will also have to publish an “insourcing” strategy, setting out how they plan to bring services back in-house, where they represent better value.
Where outside contractors are involved, the government said that “community impact” will be placed at the heart of buying decisions, with firms encouraged to make the case for how national and regional schemes are part of their bids, creating local jobs and apprenticeships.
A new suite of AI tools aimed at streamlining the commercial process has also been developed as part of the new policy.
Ward said that the new approach would make a difference to steelworkers in Port Talbot, those building ships on the Clyde or running tech start ups in Cambridge or Brighton.
“Through our new Public Interest Test, we’re also calling time on the era of ‘outsourcing by default’, and bringing public services back in house, where they belong,” he added.
“We’re also stripping away the red tape that has held back our small businesses and charities for too long, using new AI tools to make bidding for work simpler, faster, and fairer.”
Other related measures being developed include policies specifically tied to national security and shipbuilding
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