A third of SMEs in survey said they were doing less work in the public sector than five years ago
Small contractors are losing out to national firms on “bread and butter” minor works for public sector clients, a survey of SMEs has found.
A third of the 460 SMEs that responded to the National Federation of Builders study are doing less work for the public sector than they were five years ago.
Companies whose turnover was less than £25m were most likely to report a drop. Only 12% of companies were doing more work for the public sector, usually firms earning more than £25m a year.
Most blame the introduction of frameworks, where small works are packaged up and let to larger contractors. More than half said public sector procurement practices were “unhelpful” to SMEs – only 12 of the 460 respondents said they were beneficial. Forty per cent are looking for new markets and many small builders are dependent on the volatile private housing market.
The government is encouraging public bodies, such as local authorities, housing associations and healthcare trusts, to use frameworks to improve efficiency. However, small firms say contract packages are too large and tendering processes too complex.
Julia Evans, chief executive of the National Federation of Builders, said: “For our members this has been a huge issue. Increasingly work in the public sector is not coming through to members – they’re getting less than they were expecting and they think it will get worse.
“We need to say to local government that SMEs are an important part of the local economy and we need to engage with them.”