Councils must better understand small firms' procurement says FSB

Treasury estimates total procurement spend of UK local authorities at £88 billion per year. The FSB polled all local councils to see how and where they spend their money. Of the 148 local authorities that responded, the FSB found more than a third (38 per cent) of councils do not actively record the location of their spending and almost a half (49 per cent) don’t know the size of business they trade with.

The FSB wants to see more accurate and public recording of spend so that it can properly inform strategy and decision making. It is calling for all local councils to put mechanisms in place to record and analyse where and with which businesses money is spent. This should also measure the size of business by micro, small and medium. The data should be transparent and publicly available, says the FSB.

John Walker, National chairman, Federation of Small Businesses, said: “We are pleased that so many councils took part in the research. It has allowed us to build up a good picture of what is going on and identify some really good practice. However, we were surprised that so many councils aren’t being more proactive in terms of the how they record their spending. Knowing where spend is going in the local area, as well as what type of businesses are getting contracts, would help councils focus on improving their procurement processes.”

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