Ditch your 'cosy relationships' with big business and buy small, local authorities told

The Centre has asked the Government to play a bigger role, taking responsibility for encouraging more councils to follow suit.

Luke Johnson, chairman of the Centre, said many entrepreneurs are struggling to win business from local government because its process was “complex, bureaucratic and tilted in favour of large incumbents.”

He added: “For too long needless bureaucracy and limited transparency have protected cosy relationships between government and big business.”

Public sector purchasing reforms had made it easier for small, younger firms to win government contracts, “proving that they can cut costs and drive innovation in the public sector while boosting their local economies.”

Data for the league table were drawn from an analysis of 42m transactions by 158 local councils costing £89bn over the three-year period.

Figures from eight councils, including Bournemouth, Exeter, Bury, Leicester county council, Sefton and York, were excluded because of doubts about the quality of the data. A breakdown shows London boroughs head the list of councils buying more from small companies over the past three years.

Wandsworth has shifted almost 30.5pc of its spending to small companies in the period, with Greenwich (25.5pc), Croydon (20.2pc) and Newham (17pc) also among the most active.

On the other side of the coin Nottinghamshire county council cut small business spending by 36.3pc, followed by Newport (33.3pc) and Sheffield (15.2pc).

Residential care services with an outlay of £448.7m was the biggest earner for small businesses, then construction (£313m) and business support (£220.6mn).

more