The Scottish government is to overhaul its public procurement system after a study revealed that Scottish companies were losing major public building and infrastructure projects to big international corporations. The report, produced by The Jimmy Reid Foundation claimed that the Scottish economy was missing out on contracts worth hundreds of millions of pounds.
The study claimed that Scotland’s current £9.2 billion annual public procurement expenditure was dictated by the need to find the cheapest option and that the process of bundling contracts to take advantage of economies of scale was removing many Scottish firms from contention. Out of 49 major public contracts, it was found that 28 had no effective Scottish participation. The report argued that contracts should be designed to allow medium and small companies a chance to be awarded public works, which would benefit the local economy.
In a response to the report, the Scottish Cabinet Secretary for Infrastructure and Capital Investment, Alex Neil, announced a review of construction procurement. He confirmed that the Scottish government was committed to introducing the Sustainable Procurement Bill which would include a number of community benefit clauses designed to ensure that public procurement policy was favourable to Scottish businesses.
The Sustainable Procurement Bill could provide a powerful boost to jobs in Scotland as small and medium firms will stand to reap considerable benefits from the procurement reform it offers.