The government is urging local councils to open more of their contracts to smaller businesses.
The Office of the Deputy Prime Minister (ODPM) has set out a code of practice detailing the actions local authorities should take to make public sector contracts more accessible to small enterprises.
The ODPM argues that businesses of all shapes and sizes, including ethnic minority and female owned firms, should have the same chance of securing council contracts as large companies.
It says that all local authorities should sign a Small Business Friendly Concordat by the end of 2005, pledge to help stimulate local enterprise and encourage a varied range of suppliers.
A new Good Practice Guide shows councils how best to open their markets to smaller firms, through fairer processes and increased publicity of forthcoming contracts.
Although government funded organisations spend £117 billion on products and services, the share enjoyed by small businesses is tiny compared to that of large companies.
Research conducted last year by the Federation of Small Businesses (FSB) revealed that only 3 per cent of small firms’ main customers were public authorities.
Local government minister Phil Hope said: “We want all councils to recognise the contribution small businesses can provide in delivering high quality public services.
“In particular, they can often respond quickly and flexibly to customer needs, providing innovation, ideas and improved services.
“This will contribute to the development of prosperous local economies and communities, as well as keep council tax down through more efficient procurement.”
