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Scottish councils urged to increase spending with SMEs

The Federation of Small Businesses (FSB) has urged Scottish councils to increase their spending with regional SMEs ahead of local elections on 4th May.

The group cited figures collated by the Improvement Service which revealed the average Scottish council spends less than one-fifth of their procurement budget with local SMEs.

Andy Willox, Scottish policy convenor at the FSB, claimed a 2% increase in spending with local firms each year could deliver a £600m boost to businesses by 2021.

“Council budgets are under significant pressure,” he said.

“That’s why it is important that they squeeze every drop of value out of their spending power by targeting it on their local economies.”

Scotland’s 32 local authorities currently spend over £6.1bn per year on procuring goods and services.

West Dunbartonshire Council was identified as spending the least on local businesses, with just 5.8% of its procurement budget going towards SMEs in the area.

By contrast, Shetland Islands Council uses 53.6% of its spending power on boosting the local economy.

All of Scotland’s city councils, with the exception of Aberdeen, spend less than one pound in four with local SMEs and both Glasgow and Dundee have fallen below the national average.

This comes despite Scotland’s 348,000 SMEs accounting for 99.3% of all businesses in the country.

“Most smaller firms have far more contact with their local authority than central government,” Andy added.

“And we know that smaller firms are key to prosperous local economies.

“In these uncertain times, strong partnerships between councils and their business communities are more important than ever.

“Our manifesto sets out practical measures councils can implement to boost their local economies and reduce demands on council services.”

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