Councils in Scotland urged to spend more with small business in the area

Councils could give Scotland's small businesses a £600 million boost by upping the amount of cash they spend with local firms.

The Federation of Small Businesses (FSB) wants town halls across the country to increase their spending with local small and medium enterprises (SMEs) by 2% a year until 2021.

That would give Scottish firms a £600 million boost by 2021, the business organisation claimed.

Scotland's 32 local authorities spent a combined total of £6.1 billion buying in goods and services in 2015-16, according to statistics - but on average councils spent just under a fifth (19.7%) of this cash with smaller firms in their area.

The FSB said that meant councils spent approximately £1.2 billion with local businesses, adding that if 10% more of the overall procurement budget went to local firms, this would rise to £1.8 billion.

There are some 348,000 SMEs operating across Scotland - making up more than 99% of all businesses and providing an estimated 1.2 million jobs

FSB Scottish policy convener Andy Willox said: Council budgets are under significant pressure. 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.

We're calling on every Scottish council to increase their spending with local firms by 2% per year, delivering a £600 million boost to Scottish business by 2021.''

The FSB made the call as it issued its manifesto for the council elections on May 4, with Mr Willox stating: Most smaller firms have far more contact with their local authority than central government. 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.''