SMALL firms are not landing enough public contracts, the Federation of Small Businesses has said.

According to the FSB, about a fifth of Scotland’s £12 billion procurement budget goes directly to small businesses.

It claims the proportion of contracts won by smaller firms is largely unchanged since 2011, despite legislative and administrative reforms designed to improve small business success, adding that more should be to encourage “more sustainable” public sector supply chains.

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Andrew McRae, FSB’s Scotland policy chair, said: “Over the last decade we’ve seen a slew of laudable procurement reforms in Scotland.

“Unfortunately, they seem to have had little impact on the share of work won by smaller firms.

“That means that we’re failing to use the full potential of public sector spending power to develop our local economies.

“In this new report, we ask Scotland’s public sector decision-makers to carefully measure how they’re contracting at the moment and develop realistic action plans to improve spending with local business.

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“That might mean attaching proportionate terms and conditions to contracts, or breaking a giant contract into bitesize lots, or working with other local public bodies to stimulate local supply.”

It also said action should be taken tackle the problem of late payments.

Mr McRae added: “Across the UK, a small number of big businesses are very good at winning at public contracts. But that doesn’t mean that they’re run well or treat their supply chains fairly.

“While our top priority is for smaller firms to win more work, ministers also need to ensure that big primary contractors treat their sub-contractors with respect.

“With thousands of Scottish businesses going under every year as a consequence of late payment, ministers should do everything in their power to help end this scandal.

“We’re making the case for action to boost supply chain skills-development to give Scottish productivity a much-needed lift.”