18 February 2015

New construction strategy will support SME firms to deliver local economic growth

According to the Federation of Master Builders (FMB), the Local Government Association’s (LGA) newly launched local government construction procurement strategy sets the framework for improving public procurement for small and micro firms.

The LGA launched the Construction Category Strategy earlier this month. It is intended to support a more focused approach to what is a key spending area for local government and a major source of employment across the country. The LGA hopes the strategy will highlight new developments and ideas which can help to support improved procurement practices, collaboration and strategic co-ordination of the local government’s annual spending on construction.

After commissioning a report into procurement, the LGA launched its National Procurement Strategy (NPS) in 2014. Construction was selected as a priority category as part of work underpinning the NPS. It identifies what is needed under four themes: maximising savings, supporting local economies, modernisation and demonstrating leadership.

Cllr Peter Fleming, Chairman of the LGA’s Improvement and Innovation Board, said: “Local government wants to build long-term partnerships with suppliers who we believe can help us deliver significant local growth, increased skills and jobs. The strategy is the first step in addressing the need for a strong collaboration between industry and local government to make sure that local people have the skills required to deliver these projects.”

Fleming concluded: “The strategy outlines a general ‘call to arms’ for local government so as to enable increased efficiencies through collaboration and partnering. Construction permeates virtually all other industries, is a major source of employment and is a foundation of a prosperous society.”

Chief executive of the FMB, Brian Berry, said: “With 41% of construction SMEs failing to win nine out of ten public sector contracts they bid for, the Local Government Association (LGA) focus on making procurement processes more SME-friendly is extremely welcome. The new Strategy, which is the first of its kind, is right to highlight how increasing the amount of construction work awarded to construction SMEs is key to maximising local economic growth.

“I urge all local authorities to analyse their own processes against the key objectives contained within the Strategy and ensure their own approach isn’t needlessly blocking small firms.”

Mr Berry concluded: “When it comes to applying pro-SME procurement practices, some local authorities are better than others so the work the LGA does to provide an overarching set of principles is crucial. Relatively simple changes – such as always using PAS 91 as the basis for any construction pre-qualification questionnaires – can make a huge difference to reducing the bureaucratic burden on SMEs and encouraging more small firms to bid for public sector contracts.”


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