The decision will abolish the present allowance (40% of contracts worth less than £25,000 and all winter maintenance and emergency work) which local authorities can award to their Direct Labour Organisations (DLOs) without competition. Special arrangements will be made to ensure that local authorities can continue to call out any of their own staff where appropriate to help deal with an emergency.
The move to compulsory competitive tendering follows a consultation with local authorities in 1991, and a meeting between Robert Key and leaders of the local authority associations.
Commenting on the decision, Mr Key said: 'Bringing full competition into local authority highway work is going to promote greater efficiency; give better value for money to the council tax payer; and be a welcome shot in the arm to firms in the highway business, particularly small ones. And opening up winter maintenance for the first time will be an exciting new opportunity for the private sector.
The decision will be implemented by regulations under the Local Government Planning and Land Act 1980. The local authority associations will be consulted on the drafting of the regulations and on the timing of their implementation.