Scotland business

Councils urged to 'spend locally'

Scotland's small businesses are pressing government to do more to ensure that councils buy locally.

The Federation of Small Businesses (FSB) has published research which suggests the strong link between spend on small local firms and the benefit to the local community.

It is calculated that councils spend £43m a year with local businesses.

This is said to generate a total £60m in economic impact as that money is recycled.

But only 27% of councils' total procurement budget is spent within their own boundaries - a lower level than the UK council average.

The FSB in Scotland said spending with larger firms had a lower impact on the local economy.

Policy convener Andy Willox said: "While not underestimating the challenges that Scotland's local authorities face, we hope that this report encourages them to realise that spending locally will boost their local economy.

"Further, the study shows that while spending with large local businesses is good, spending with small local businesses is even better."

He added: "We realise that councils can't purchase on the basis of geography, but they can ensure that they break contracts into appropriately-sized lots.

"They can remove disproportionate terms and conditions and they can work with their local business community to understand the barriers to local firms' success."