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Reported on Wed, 08 Mar 2006

Local authorities and councils have been criticised for ignoring small and medium-sized enterprises (SMEs) when it comes to hiring suppliers, but a business loan could allow SMEs to invest in promoting their services to previously untapped markets.

The Federation of Small Businesses (FSB), which represents the interests of almost 200,000 SMEs, has called on the government to increase the number of local authorities contracting smaller businesses.

Despite the creation of the Small Business Friendly Concordat, a scheme designed for councils to prove they are treating SMEs fairly when it comes to procurement, the Office of the Deputy Prime Minister (OPDM) has revealed that only 33 out of the 388 local authorities in England have signed up.

Clive Davenport, national trade and industry chairman of the FSB, said "The fact that less than ten per cent of local authorities have signed up to treat small firms fairly in their procurement policies is very alarming. We call on the ODPM to put pressure on local authorities to bring this figure up, to above 90 per cent by the end of March and to 100 per cent by the summer."

Mr Davenport added that it was integral for the survival of UK SMEs that councils ensured these firms were considered for the provision of services.

"Local authorities spend well over £40 billion per year on procurement. It is vital for small businesses to be able to access that market on a fair and equal basis," he said.

SMEs struggling to access markets that are typically closed off to them through lack of awareness could take out a business loan to promote their services.

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