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Councils ‘unaware’ of suppliers’ size and location

Although UK councils spend around £88bn a year procuring goods and services, they are largely ignorant about their suppliers, new research suggests.

The Federation of Small Businesses (FSB) found that only 51% of 148 councils that responded recorded the size of the company for each contract awarded. For those that did, spending with small and medium sized enterprises ranged significantly; from less than 10% in some local authorities, to over 70% in others.

Of the councils that responded, 38% did not record where the companies supplying their goods were based.

The FSB asserted that the time and cost involved with public sector tendering was a major barrier to participation for smaller businesses, as was the difficulty accessing contracts through bureaucracy.

John Walker, FSB national chairman, said: “We were surprised that so many councils aren’t being more proactive in terms of how they record their spending.

“Knowing where spend is going in the local area, as well as what type of businesses are getting the contracts, would help councils focus on improving their procurement processes and ultimately boost local communities by helping councils ensure their local small businesses are getting a fair chance to compete for contracts.”

Communities and local government secretary Eric Pickles told the Financial Times: “There are too many clipboard councils with impenetrable walls of red tape that put small firms off from bidding for contracts. More councils should be aiming to work with small and local businesses because of the wider benefits that brings to the community.”

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Helen Fudge   24/07/2012 at 11:09

The FSB's research (undertaken by CLES) is excellent and well worth a read. It draws on insights from SMEs and local authorities to identify a range of sensible recommendations which, if implemented, could make a real difference. I liked the section on dispelling myths!

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