Local councils in the north of England are holding back economic development by failing to procure IT contracts from SMEs.
More than half of 28 large councils whose spending was analysed failed to place any IT contracts with small suppliers, despite government targets that one quarter of public organisations’ IT budget should be spent with SMEs.
The disparity was uncovered by IT advisory services firm Streamwire, which used Freedom of Information requests to examine how the 28 councils allocated their IT contracts.
Fifteen of them didn’t spend any of their budget with small IT suppliers, while more than 85 per cent said they have no plans to increase the amount they spend with SMEs.
North stronghold slipping out of reach
The research identified a region of councils called the Northern Powerhouse, which includes those in Liverpool City Region Combined Authority, the Greater Manchester Combined Authority, the West Yorkshire Combined Authority, the Sheffield Combined Authority, the Humber Local Enterprise Partnership and the North East Combined Authority.
This ‘Powerhouse’ should lead the way in increasing SME procurement, commented Anne Stokes, CEO of Streamwire.
“The key objective of the Northern Powerhouse was to establish the region as a beacon for doing things differently, strengthening the area as an economic hub and showcasing how other regions could adopt similar innovation and best practice in their communities,” she told Computer Weekly.
“Unless local councils take up this mantle, the government’s goal of building an economic stronghold in the north is surely going to be very difficult to achieve sustainably.”
Some examples of good practice were highlighted: Durham and Wakefield Metropolitan councils spend 48 per cent and 42 per cent of their IT budgets on small businesses, respectively.