Too many contracts going to Irish firms, claims business chief

By ALISTAIR MUNRO
Published on 28/12/2012 00:01

SCOTLAND’S economy is suffering as a result of major construction contracts being awarded to firms across the Irish Sea, a business leader has claimed.

Stewart Nicol, the chief executive of Inverness Chamber of Commerce, has said that a total of eight contracts, recently awarded by Highland Council and worth almost £25 million, went to firms in Ireland and Northern Ireland at the expense of local companies.

Mr Nicol warned the local authority was fuelling the economies of Northern Ireland and the Republic of Ireland to the detriment of the Highland economy.

He claimed the Irish companies involved were not re-investing in the local economies where they were working.

The business chief said they took their own staff and equipment over, meaning local workers and plant-hire firms were missing out. B&Bs and other accommodation providers were also losing out, he claimed, as many of the companies were housing workers in Portakabins on site.

Among recent contracts awarded by the council are those for new roads, a school, a ferry terminal and a flood alleviation scheme.

Highland Council responded by saying they had to adhere to strict procurement legislation when awarding contracts.

But Mr Nicol said there was “major concern” among chamber of commerce members about the situation and has organised a meeting between local firms and public sector organisations next month to discuss the tendering process.

He said: “In other European countries there seems to be a greater tendency that local businesses win the contracts.

“While we recognise the European legislation, I think there could be appropriate clauses that give the opportunity for local businesses to win the tender.

“I see in Spain and Italy they keep it within the region, not just the country, and they are obviously interpreting the same legislation.”

He said the firms winning the contracts were bringing their own staff, adding: “Their guys are staying in Portakabins, there is not even money going into local bed and breakfasts.

“I am not saying that local businesses are not up to delivering them [contracts], or are not fit for purpose.

“But these are local companies paying Highland council rates, community charges. That is all going into the local economy.”

The downturn in trade in the Highlands has hit a number of construction firms, including the UBC Group which collapsed in May with a loss of 200 jobs. More than 300 were made redundant three years ago after the collapse of Rok Construction.

David Alston, Highland Council’s deputy leader, said: “We have to work within the procurement law but we are keen to work with the construction sector. If there are any ideas on how we could help, we will be willing to listen.

“We have been working with local businesses to make sure that they are well placed to submit tenders. But it is important to understand that companies here also bid for contracts outwith the Highlands.”

Councillor Alston said he suspected Irish firms were paying lower wages, giving them a commercial advantage, and were targeting Scotland because of their own country’s financial crisis.