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The FMB urges increase in spend with SMEs “across the board”

This increase will help with apprenticeship targets.

An increase in spending “across the board” with small to medium enterprises (SMEs) must happen if the greatest local and economic benefits are to be realised.

That is the view of the Federation of Master Builders (FMB) in light of the government announcement of targets that will see more money spent with SMEs on public sector contracts.

Between 2013 and 2014, the government spent £11.4Bn with SMEs, equivalent to 26% of central government spend.

New targets will see this number upped to a third by 2020 so that a further £3Bn each year will be going to SMEs either directly or through the supply chain.

The FMB has welcomed this approach from the government by Sarah McMonagle, Head of External Affairs, believes that the wider public sector should be spending with SMEs.

She said: “The government’s announcement that every £1 in £3 is spent with small businesses is welcome but only applies to central government contracts.

“We want to see an increase in spend with small and micro firms across the board and by every public sector body. In many parts of the country, it is still the case that small firms are all too often squeezed out by larger competitors when bidding for public sector work.”

In particular, the FMB pointed to the economic benefits that widening the public sector spend can provide.

The government wants to create three million apprenticeships by 2020 and Sarah McMonagle pointed out that micro firms are responsible for the training of the majority of apprentices.

“There are lots of good reasons for the wider public sector to spend as much as possible with small firms,” she said.

“In particular, using SMEs has been proven to provide real local economic and environmental benefits. SMEs employ local people, meaning that the money spent is likely to go to local suppliers and remain within the local economy.

“Furthermore, in the construction sector, two thirds of apprentices are trained by micro firms, meaning that spending more with these businesses could help towards the government’s target of creating three million new apprenticeships by 2020.

“An even more ambitious target could go further towards the government’s state aim of three million apprenticeships by 2020.”

The FMB say that if public sector clients are already spending £1 in every £3 with SMEs, they should be working towards increasing that spending to £2 in every £3.