The Local Government Association (LGA) is calling on the government to campaign for changes to 'tortuous' European Union procurement rules which it says are denying local councils opportunities to make cost savings and promote local growth.

In particular, the LGA wants to see a significant increase in the 'ludicrously low' £170,000 threshold above which public sector tenders have to be opened out to the entire EU. This process can take several months to complete and creates 'a significant and costly barrier' to shared service agreements between authorities, which the LGA says have been shown to save substantially on costs.

The LGA is also concerned that a forthcoming revision of procurement regulations is likely to make it 'virtually impossible' for local councils to give preference to local suppliers.

It points out that councils spend 49% of procurement budgets with SMEs and says this figure could be higher if local authorities were allowed to target spending at local companies in order to stimulate growth. The LGA is seeking a relaxation of rules that demand contracts with employee organisations or staff mutuals be opened up to providers across Europe.

Peter Fleming, chair of the LGA's improvement board, said: 'Opaque internal market regulations, which fail to distinguish public sector goals from the private sector's profit motive, are standing in the way of councils delivering better value for money to taxpayers. We desperately need the government to take the fight to Brussels on our behalf and promote a rewrite of the rules that are stifling public service innovation and limiting councils' ability to promote growth in their area.'

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