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Small businesses demand fairer share of public purse

SMALL businesses are demanding a better deal to secure tens of thousands of jobs and improve their prospects.

The call comes as The Herald launches a campaign for more action to be taken to support what is the backbone of the economy: small and medium-sized business enterprises (SMEs).

The vast sector, which accounts for 99% of businesses and 75% of jobs in Scotland, faces obstacles in the creation of jobs and prosperity.

One of these obstacles is procurement, and Scotland's small businesses are urging last-ditch changes to a Holyrood Bill aimed at giving them a bigger share of public spending.

The Procurement Reform Bill, which reaches its final stage tomorrow, will not apply to five hybrid companies set up by the Scottish Futures Trustthat are accessing £1 billion of public money to build schools and health centres.

Moreover, business groups say £10 billion being spent on public contracts remains skewed in favour of large and non-Scottish companies, and that the bill could fail in its aim of boosting local economic growth.

In light of this warning, The Herald aims to spotlight public contracts, roads and town centres, and skills needed for the economic growth.

l The £10bn opportunity: We look at how some public agencies say their hands are tied by European legislation while others find ways to support small suppliers.

We ask the Scottish Government to toughen its bill and future guidance to help agencies prioritise the local economy.

l Roads and town centres: We look at the continuing lack of spending on roads and at key issues for small businesses in town-centre regeneration.

We ask the Scottish Government to take up its share of the new £200m UK roads fund and use it for infrastructure.

l Young workers: Sir Ian Wood's report last year is a blueprint for the skills of the future.

We ask the Scottish Government to ensure schools and colleges engage with SMEs, not just big business, to bridge the skills gap.

Andy Willox, Scottish policy convener for the Federation of Small Businesses (FSB), said: "Public-sector purchasing, the skills system, saving the high street and the state of our local roads are some of the real bread-and-butter issues facing small businesses today. The Herald should be applauded for launching a campaign on these oft-neglected issues and giving them the attention they deserve."

Liz Cameron, chief executive of Scottish Chambers of Commerce, said: "We welcome The Herald's forthcoming campaign, which hits all the right buttons for business. At a time when Scotland is engaged in a debate over our future constitutional status, it is right to use this opportunity to highlight the fundamental issues that affect businesses' ability to compete."

The new legislation will require public agencies to consider community benefits as well as savings when spending a combined £10bn a year on procuring goods and services.

Already exempt from the bill are Scottish Water and arm's-length organisations (Aleos) set up by councils in areas such as leisure, transportation, property and care services.

Also exempt from the bill are five hybrid public-private firms, known as HubCos, which have taken more than £1bn of spending on schools, health centres and infrastructure.

MSPs will ask how the HubCos and Aleos are to be held accountable for delivering community benefit and fair treatment of workers, including a living wage.

Mr Willox said the FSB welcomed the potential of the bill, but added: "I'm astonished the Scottish Government is deliberately excluding so much tax- payer-funded buying from the scope of their reforms.

"We are urging MSPs to look again at the legislation and ask if it is really appropriate for us to turn a blind eye to the purchasing practices of arms-length bodies and HubCos."

Deputy First Minister Nicola Sturgeon, who is responsible for the Bill's passage, said the Scottish Futures Trust had advised that its offshoots are "private companies and, as such, it would not be appropriate for HubCos to comply in all respects with the provisions of the Bill".

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