Barnsley and Sheffield councils are the worst two local authorities in the country for spending money with local businesses, according to a new think tank report out today.
The Spend Small: The Local Authority Spend Index has ranked councils on their procurement spend with small companies over the last three years.
Barnsley spent just 4.2 per cent of its procurement budget and Sheffield spent 4.33 per cent.
Sheffield also had one of the biggest falls in small firm spend, reducing it by 15 per cent in the last three years.
The research was carried out by the Centre for Entrepreneurs think tank and open data company, Spend Network, suggests council procurement from the small business community is a fundamental step towards achieving local economic growth.
According to the report, just twenty large companies earned an astonishing £9.9bn from English and Welsh councils in three years, while 78,128 small firms shared an £11.1bn pot over the same period.
Centre for Entrepreneurs director Matt Smith said: “The Index shows Barnsley Council has a lot to improve on. This will take time. What’s important is that the council’s leadership commit to boosting small firm spend, and oversee the development and implementation of a Spend Small policy.”
Centre for Entrepreneurs chairman and serial entrepreneur Luke Johnson said: “One of the best ways that government can support small businesses is buying from them. Sadly, many entrepreneurs struggle to win business from government, finding the process to be complex, bureaucratic and tilted in favour of large incumbents.
“Although central government has an explicit strategy to do more business with small firms, the same cannot be said for local authorities, so performance varies widely. Given the opportunity, small, entrepreneurial firms are proving they can cut costs and drive innovation in the public sector, while boosting their local economies.
“The Index aims to highlight the best performing councils, encourage those further down the rankings to evaluate their performance, and overall make it easier for entrepreneurs to win business.
“It’s time for all areas of government to Spend Small.”
At the other end of the scale Monmouthshire County Council spent an impressive 25.6 per cent of its budget with small firms over the same period.
Next best were the Isles of Scilly at 25.4 per cent, followed by the Royal Borough of Windsor and Maidenhead at 21.85 per cent.