The number of Scottish businesses winning work from their local council has almost halved over the past decade, industry leaders say.
And town halls are spending less locally than they did ten years ago despite Scottish Government reforms designed to increase local procurement. The Federation of Small Businesses (FSB) said the statistics published by the Improvement Service underlined the need for First Minister Nicola Sturgeon to set out robust new procurement measures when she unveils her Programme for Government in Holyrood today.
FSB’s Scotland Policy chair Andrew McRae said: “The Scottish public sector is a serious economic player. It spends around £11 billion buying goods and services every year – money that, if spent smartly, can generate added benefits for the local community.
“We know that money which is spent local stays local – and that buying from local small businesses has economic and social benefits way beyond the bottom line.
“But despite political intention to get more cash spent locally, today we see that far fewer local businesses are getting a fair share of our public sector’s spending power.”
Scottish local authorities spent approximately £7bn on goods and services this year. Scotland’s councils had 51,312 local suppliers in 2008, but by 2017 this figure had dropped to 29,910 – a fall of 42 per cent. In 2008, the average Scottish council spent 30 per cent of their procurement budget with firms from within their geographic boundaries. By 2017, this figure had dropped to 27 per cent.
“When the First Minister stands up in Holyrood tomorrow to unveil her Programme for Government, tough action on procurement needs to be in there,” Mr McRae said.
“That means requirements for all of the public sector – from hospitals to schools – working together at a local level to co-ordinate buying strategies and open up opportunities for firms in the area. It means ensuring that new procurement rules requiring contracts to be broken down into the smallest possible lots are actually enforced.” The Improvement Service Report reviewed councils’ spending figures over the past ten years.