Businesses demand 'Scotland first' policy from public sector

SCOTLAND's public sector must adopt a "Scotland first" approach in improving procurement opportunities for small business, the Scottish Chambers of Commerce (SCC) said yesterday.

Director Liz Cameron called for a radical new attitude towards the "national economy" in the procurement policy of the Scottish public sector.

She called for a "less bureaucratic approach" to the dispensing of contracts to business, one that was tailored to the realities of the Scottish business landscape, and which advantaged "native" businesses without contravening EU competition law.

The Scottish public sector, she said, could "best serve the national economy the more their supply needs are spread across all sizes of company, and the more those companies are based in Scotland".

The remarks are predicated on the widespread belief that competitors in Europe make public contracts easily accessible to homegrown companies.

The SCC statement calls for the public sector to "wholeheartedly buy-in" to the idea of prioritising the strategic aims of the Scottish economy above pure price considerations.

In this it goes a considerable way beyond the SNP government's economic strategy, which contains only vague commitments to "more effective use of public-sector procurement".

Cameron said: "We have actively engaged with the public sector on how business, particularly small business, can achieve access to its valuable markets.

"But this needs to be a two-way process. We need a commitment and an understanding of the wider economic picture from those who make the decisions. Price alone should not be the sole criterion of contract decisions."

Cameron said that business rejected the claim, made by the previous Labour administration, that growing the public sector (currently worth 51 per cent of Scottish GDP) automatically grew the private sector: "But local authorities, the health service, universities, colleges, schools, and the Scottish Government itself can best serve the national economy by spreading its supply needs across all sizes of company," she said.

"Ideally those companies should be based in Scotland."

The SCC is seeking a more "Scotland-friendly" interpretation of EU procurement rules, which define an SME as one with fewer than 250 employees.

As 95 per cent of Scottish businesses have ten or fewer employees the SCC wants micro-businesses – "tomorrow's growth companies" – to be given more chance to compete for contracts with non-Scottish companies at home, in the rest of the UK, and beyond.

Cameron added: "We are concerned that a push for economies of scale by the amalgamation into larger contracts (for example by local authorities pool-buying] could marginalise smaller players.

"If this is the route we are to take then there must also be provision, encouragement and support if necessary, for SMEs to bid as consortia and attention to process to ensure it is actually open to SMEs.

"There will be no advancement towards opening public procurement for smaller suppliers unless the public sector wholeheartedly embraces this concept."