Partner Article

Keep it local NECC tells Councils

The NECC is encouraging councillors to do more to support the growth of local firms by buying more private sector services from businesses in the area.

A new NECC report issued as part of the ongoing Buy North East campaign illustrates the impact this situation has on the local economy and the ability of local businesses to win work, expand and take on more staff.

Currently local authorities spend £3.5 billion annually private business services, but only 45 percent of these are firms in the area. This figure would be greatly improved if more companies in the region were eligible to bid for work in the region.

Often larger national companies, who frequently sub-contract the work back to local firms, win these contracts, meaning that the bulk of the profits are then kept outside of the region.

Ross Smith, NECC head of policy, said: “This isn’t about creating unfair advantage for North East companies it is about ending the unfair practices that currently exist that prevent firms in the region actually pitching for the work in the first place.

“Our medium and large companies are the ones that can provide a genuine catalyst for growth in the economy but until we release the shackles placed on them by council contractors then they remain a latent force.”

The report highlights that by placing orders, which are too big for local businesses to pitch for, councils are markedly impacting upon growth. Furthermore, larger North companies are also suffering, as many are too small to be the main contractor but too big for sub-contracting.

Ian Walker, chairman of Newcastle-based SURGO Construction, said: “If like minded companies get together and support one another, sharing skills, knowledge and training, everyone can benefit and the public sector should surely support this viewpoint.

“It’s essential that we have a steady stream of employment opportunities coming through for young people as well as secure jobs for our existing workforce.”

This was posted in Bdaily's Members' News section by Ruth Mitchell .