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The London Borough of Havering ensures that over 78% of their spend goes into their local economy. Using a local SME means that 83p of every £1 spent will filter back into the local economy. However, at a time when cost control is paramount can Local Government afford to use small suppliers?
At Ticon, we prefer to turn this question on it's head, 'can Local Government' survive without SME suppliers? Given that nearly 50% of Local Government spend is with SMEs that looks unlikely. Whilst it is tempting to view small suppliers as a luxury, in fact small suppliers are likely to provide the bulk of a council's procurement savings.
So what can you do to flow more money into your local economy?
Step 1: Invite small, local companies to bid for business. Of course they have to compete with everyone else, but it doesn't hurt to invite them to bid for work. If you research your supply chain you could be surprised at what you might find.
Step 2: SMEs often provide better service, better service can be a cost saving in itself, so if you tender a contract, make sure you evaluate the cost of managing that contract as well as the cost of supply.
Step 3: Big suppliers also use smaller suppliers, what are your larger companies doing for your local economy? They won't tell you if you don't ask them, so require your tender respondees to tell you what spend and skills they will push into your economy. Step 4: Raise the tender threshold, why run tenders unless you have to? If you can award with three quotes, as long as you're specifying properly you can still provide suppliers with an valid competition. Step 5: Pay your suppliers early, if you can't pay them early, pay them on time. |
Government 
Details of our review of purchase cards in Essex. Working with Visa and Barclaycard, our case study shows how prepaid cards will save Essex £673k per annum, mainly through integrating cards into their e-procurement systems.
Do you know whether any of your critical suppliers are over-exposed to debt? Is the functioning of your organisation at risk if one of your suppliers fails?