John Denham has asked councils to consider how their procurement benefits the wider needs of local people.
Speaking at the Chartered Institute of Public Finance & Accountancy annual conference in Manchester, the communities secretary highlighted the £42bn spent by local authorities on procurement of goods and services annually.
“This money can just buy services – or it can be used to ensure the service providers also provide apprenticeships and other training opportunities,” he said.
“This money can just buy a standard service at the lowest possible cost – or it can be used to encourage businesses, including local businesses, to provide innovative solutions which deliver better value for money.
Mr Denham also demanded greater value for money, saying that although government expenditure, “the days when councils could claim that every problem could be answered by a cheque from Whitehall are over”.
“Local authorities will need to make each taxpayers’ pound work harder than ever. Indeed, councils must be able to promise residents that every taxpayers’ pound will work as hard as for them as taxpayers worked to earn it in the first place,” he said.