The Federation of Master Builders (FMB) has stated local authorities and housing associations (HAs) should set targets to increase their spend with small businesses

Sarah McMonagle, Head of External Affairs at the FMB, said the Government's announcement that every £1 in £3 is spent with small businesses is welcome, but only applies to central government contracts.

She said: "We want to see an increase in spend with small and micro firms across the board and by every public sector body. In many parts of the country, it is still the case that small firms are all too often squeezed out by larger competitors when bidding for public sector work."

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Ms McMonagle continued: "There are lots of good reasons why the wider public sector to spend as much as possible with small firms. In particular, using construction SMEs has been proven to provide real local economic and environmental benefits. SMEs employ local people, meaning that the money spent is likely to go to local suppliers and remain within the local economy.

"Furthermore, in the construction sector, two thirds of apprentices are trained by micro firms, meaning that spending more with these businesses could help towards the Government’s target of creating three million new apprenticeships by 2020. An even more ambitious target could go further towards the governments stated aim of 3 million apprenticeships by 2020."

She said: "Some local authorities and housing association are better at engaging with SMEs that others but we’re urging all public sector clients to set a target for increasing the proportion they spend with SMEs. Some may already be spending £1 in every £3 but then they should be working towards spending £2 in every £3.

Ms McMonagle added one way the public sector can boost engagement in public procurement by SME's is to ensure they are implementing the EU Public Procurement Directive, which was introduced earlier this year.

(LM)