Launching their manifesto for May’s local authority elections, FSB has highlighted that Scottish councils have a combined procurement budget of around £7bn. However, the average Scottish local authority spends less than a third (29.1%) of this budget with businesses from within its boundaries.
The small business campaign group says that if all councils gave local firms two additional percentage points of their total procurement budgets per year, this would deliver a £140m annual boost to local economies across Scotland.
Andrew McRae, FSB’s Scotland policy chair, said: “Businesses and councils across Scotland have a shared interest in local economic recovery. Working together, they can be huge drivers of change in their communities. That’s why we’re urging parties and candidates at this year’s elections to get behind the great firms on their doorsteps.
“Modest procurement spending targets could deliver massive compound benefits. With councils facing their own budget pressures, this move would squeeze additional value from taxpayers’ cash.”
The manifesto, called The Power of Local, also urges councils to support new businesses, with a focus on boosting new-starts led by traditionally under-represented groups, including women and migrants. This new help could be delivered through the council-run Business Gateway service, it argues.
Statistics show that immigrant-led small and medium-sized businesses contribute £13bn a year to the Scottish economy. But FSB research found that this group of entrepreneurs were likely to be unaware of state-funded sources of enterprise support and business advice.
A study FSB conducted with Women’s Enterprise Scotland also shows that women-owned businesses created almost 80,000 jobs between 2012 and 2015. However, just one in five businesses in Scotland are majority owned by women, and women continue to start-up in business at a lower rate than men.
Official Scottish Government figures show that Scotland lost around 20,000 small businesses in a single year of the pandemic.
Andrew McRae said: “The pandemic forced thousands of Scottish businesses to shut up shop for good. Our research shows that while migrant and female entrepreneurs are increasingly important to Scotland’s economy, too few tap into state-funded support.
“If we’re serious about rebuilding our local business community, then we need to make sure that every budding entrepreneur is given the best chance to succeed. That’s why we’re urging councils to continue to fund support for new-start businesses, adapting the help on offer to make it work for everyone.”
As of March 2021, there were 342,125 Small and Medium-sized Enterprises (SMEs) operating in Scotland, providing an estimated 1.2 million jobs. SMEs account for 99 per cent of all private sector businesses and 55 per cent of private sector jobs.
Notes
- A copy of the manifesto can be found here
- Official statistics about Scotland’s business population can be found here
- Figures looking at Scotland’s councils’ procurement spending can be found here (pg 215). Read FSB’s report looking at small businesses and procurement in Scotland.
- Read FSB’s research looking at the contribution of migrant entrepreneurs in Scotland.
- Read FSB’s research looking at the rise of Scotland’s women owned business community. Other figures from Women’s Enterprise Scotland can be found here.
- As experts in business, FSB offers members a wide range of vital business services, including advice, financial expertise, support and a powerful voice in Government. More information is available at www.fsb.org.uk