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FSB urges change of policy

Public sector ‘should spend 10% of budget on micro-firms’

Andy WilloxScotland’s public sector should target a tenth of its spending power on firms with fewer than 10 employees, says the Federation of Small Businesses (FSB).

It argues that if the Scottish devolved public sector spent just 0.5% more of their total procurement budget with micro firms every year, they would reach this target over the lifetime of the next parliament. By 2021, the move would bring at least an additional £250 million into the country’s smallest businesses annually.

Official figures show that micro businesses currently receive about 7% of the £11 billion that Scotland’s public sector spends on goods and services every year. This is despite the fact that the 340,000 Scottish micro businesses with between zero and nine employees account for 94% of all Scottish businesses and 84,000 of these businesses have one or more members of staff.

Further, research conducted by FSB and the Centre for Local Economic Strategies (CLES) shows that every £1 a council spends with a local, small business generates 63p of additional benefit to the wider local economy, compared to 40p worth of additional benefit when spent with a large local business.

DB Photogtraphy advert 2Andy Willox, FSB’s Scottish Policy Convenor, said: “Despite some recent procurement improvements, micro firms still aren’t getting their fair share of valuable public contracts. The next Scottish Government must address this issue – forcing bodies to publish records of their spending while tackling the barriers to local firms bidding for public work.

“An ambition to increase the amount spent with micro firms by at least half a percentage point a year is a credible and realistic target. All of Scotland’s political parties must realise that a great way to develop our local economies is to use public spending to strengthen smaller firms. We’re looking for their support.”

FSB’s call for a renewed push to make public procurement work for local economies comes ahead of a slew of small business election events from Lerwick to Haddington organised by the campaign group.

Mr Willox said: “Ahead of this year’s election, FSB has underlined the need to develop resilient, diverse local economies which are less dependent on a small number of large industries. Up and down the country, we’re giving smaller business owners the opportunity to quiz local politicians on issues like procurement, taxation and broadband.”

In Edinburgh, FSB is holding a national hustings event on 20 April with Young Enterprise. School pupils participating in Young Enterprise’s company programme will attend the event and put questions to senior party representatives.

Geoff Leask, chief executive of Young Enterprise Scotland, said his organisation and FSB have forged a strong relationship.

People with an interest in small business issues can sign up for FSB’s events at ibacksmallbusiness.scot

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