Row over small firm council spend

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A South Yorkshire council has ‘serious concerns’ over figures which ranked it bottom in the country for spending with small firms.

Barnsley Council is speaking to the Local Government Association to see if other councils have raised concerns about the report, from the Centre for Entrepreneurs.

Barnsley Council says it in fact spends around 50 per cent of its budget with small and medium-sized enterprises, not four per cent as the think tank report claimed.

Sheffield Council was ranked second from bottom in the same document, released earlier this week.

Coun Alan Gardiner, corporate services cabinet member at Barnsley Council, said: “We have serious concerns in regards to how these figures have been arrived at, as we know we spend closer to 50 per cent of our budget with SMEs.

“Because councils report differently, and the information contained or omitted isn’t consistent, the methodology used is distorting the true position.

“We have always made it easy for small businesses to work with us. We’re not rated one of the top 10 councils to do business with for nothing.”

The Centre for Entrepreneurs said it used published spend data and a ‘transparent definition’ of what constitutes small spend, and a small firm, to create the Local Authority Spend Index.

A spokesman added: “Only through such transparency of data and methodology can figures be trusted and allow for reliable comparison between councils.

“Far from ‘distorting the true position’, for the very first time we are cutting through councils’ opaque statistics to give a true picture of small firm spend.”

Local authorities can use different measures of what constitutes a small firm for their own data.

Sheffield Council said earlier this week the reason its small business spend seemed low in the report was because many of its services were outsourced. Contractors are then urged to use small, medium and local firms, a spokesman said in a statement.

But Gordon Millward, regional chairman of the Federation of Small Businesses, said: “These figures are a wake-up call for councils in South Yorkshire.

“Despite years of campaigning, councils have clearly not learned the lesson that there are clear benefits to be gained by gearing their procurement policy towards small local businesses.

“In these austere times, one would imagine local councils would be completely sold on the prospect of making savings by using local suppliers and keeping wealth within the local economy. These figures are a shameful indictment of council policies that are failing local business communities.”