Andy Burnham, the Labour mayor of Greater Manchester, recently highlighted the challenges local leaders face when dealing with central government procurement rules, citing the example of Liverpool’s new Mersey ferry. Speaking at a conference, Burnham argued for a shift in government procurement policy to favour British businesses and local industry, suggesting this would support jobs and skills development in regions like the North of England.

The case Burnham raised involves Steve Rotheram, the Liverpool mayor, and the £26 million contract to build the new Royal Daffodil ferry. The ship was constructed at Cammell Laird—recently renamed Balaena Birkenhead—the last remaining shipyard on the River Mersey. Procurement rules require public contracts to go through competitive tender, which initially risked awarding much of the work to Damen, a Dutch company known for lower prices. After extensive negotiations, however, Cammell Laird secured the contract, leading to local economic benefits and the preservation of maritime skills in the area. The ferry was officially launched last week in a ceremony attended by Paul McCartney’s brother, with lively celebrations including renditions of “Ferry Cross the Mersey.”

Burnham used this story to call for a cultural change in Whitehall to ensure government contracting prioritizes British businesses and local economies. This approach aims to leverage public procurement—accounting for roughly £400 billion, or about one-third of public spending—to support domestic suppliers and regional development.

However, critics caution that public procurement rules exist to prevent risks such as cronyism, waste, and inflated costs, by promoting competition and protecting taxpayer money. The Liverpool ferry case illustrates the potential benefits of local contracting, but it also raises concerns about maintaining transparent and efficient procurement standards.

A contrasting example is found in Scotland’s ferry procurement scandal involving Caledonian Maritime Assets Limited (CMAL) and Ferguson Marine, the last shipyard on the Clyde purchased by businessman Jim McColl, who supports Scottish independence and advises the Scottish government. In 2014, CMAL sought two new ferries, awarding the £97 million contract to Ferguson despite the shipyard’s inexperience and inability to provide required financial guarantees. Political influence was evident: Nicola Sturgeon personally announced Ferguson as the preferred bidder, and contract scoring gave equal weight to “quality” and price, allowing Ferguson to win despite having the highest bid.

The project quickly encountered problems. When the first ship, Glen Sannox, was launched in 2017, it had serious defects and returned to the yard for corrections. The ferry did not enter service until 2025, seven years late. The second ferry, Glen Rosa, remains incomplete, with consultancy reports suggesting it would be cheaper to start anew. Total costs are now estimated at around £500 million—five times the initial contract. The delays and overruns have caused significant disruption for island communities relying on the ferries.

This Scottish case underscores the risks of prioritizing local suppliers and political considerations over cost and contractual safeguards. Observers warn that shifting procurement policies toward emphasizing social value and localism, as Burnham suggests, could increase the risk of mismanagement and waste similar to the Scottish ferry debacle.

While the goal of supporting British industry in public contracts is widely shared, balancing this with transparency, competitiveness, and fiscal responsibility remains a key challenge for policymakers overseeing large-scale procurement across the UK.