Proposal: Driving Economic Growth Through Public Sector Food Procurement
Introduction
Labour urgently needs to generate economic growth, but with flatlining figures since coming to power, finding effective strategies is proving challenging. One key opportunity lies in leveraging public sector food procurement to stimulate local economies, enhance food security, and drive sustainable growth.
Labour has already committed to directing 50% of public sector food procurement to local and sustainable producers. By implementing a structured framework to deliver this commitment, the government can potentially unlock £3.7 billion in economic growth annually, representing a 0.15% GDP increase - a crucial step in lifting the UK out of stagnation and into growth by the end of this parliament.
1. The Opportunity: Unlocking £3.7 Billion in Growth
Public Sector Food Procurement – The Numbers
The UK public sector spends £5 billion annually on catering contracts (Source: Steve Reed, OFC speech 2025).
Typically, 50% of catering costs go toward ingredients, equating to £2.5 billion.
Labour has committed to redirecting 50% (£1.25 billion) of that spend to local and sustainable producers.
We don’t know how much today is spent with SME producers but let’s conservatively estimate 10% (£0.25 billion) is spent with SME producers—leaving a £1 billion gap to be redirected.
Economic Impact
The New Economics Foundation estimates that every £1 spent within local food networks generates £3.70 in social, economic, and environmental value.
Applying this multiplier to the £1 billion in redirected spending, we unlock potential for £3.7 billion in additional economic value.
This equates to a 0.15% annual GDP growth contribution, which could be enough to pull the UK out of recession and into economic expansion within this parliament.
Additionally, strengthening UK food security will be crucial amid an increasingly volatile geo-political environment.
2. The Mechanism: The Buying Better Food (BBF) Framework
The BBF Framework provides a ready-to-implement solution to facilitate this transition. It offers:
SME producer inclusivity – Prioritising local and small-scale suppliers.
Transparent, short supply chains – Reducing reliance on complex networks
Farm-level sustainability improvements – Aligning with environmental goals.
Value chain carbon reporting – Ensuring accountability in emissions reductions.
The framework is already operational and scalable, enabling public sector food buyers to meet Labour’s procurement commitments without delay.
3. The Government’s Role: Setting the Mandate
To fully realise this opportunity, the government must set clear expectations for food procurers.
Recommendations:
The government align GBS standards with the BBF Framework, ensuring food procurement meets key sustainability and economic criteria including SME producer inclusivity, transparent short supply chains, farm level sustainability improvement, value chain carbon reporting.
Procurers are mandated to achieve the outcomes in the GBS. Without a mandated standard, Labour’s commitment to local and sustainable procurement will not be achieved in time to impact economic growth within this parliamentary term. By aligning GBS requirements with the BBF framework, the government can facilitate faster, measurable economic benefits.
Procurers demonstrate compliance via:
National Audit Office (NAO) oversight – Annual audits tracking progress.
Third-party certification (e.g. Food For Life) – Ensuring adherence to procurement standards.
Conclusion
This is a ready-to-go, high-impact initiative that directly supports the government’s growth agenda, sustainability goals, and food security strategy. The policy infrastructure is in place - now is the time for the government to mandate action and unlock the £3.7 billion annual incremental economic opportunity that lies within public sector food procurement.