Purchasers urged to back UK firms

3 September 2003
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04 September 2003 | Robin Parker

Public-sector purchasers are to be put at the centre of two major drives to strengthen the UK's industrial base.

Manufacturing organisations are putting pressure on Patricia Hewitt, trade and industry secretary, to overhaul public procurement processes to improve access for UK firms and keep the domestic industrial base competitive.

In a joint letter, Brendan Barber, general secretary of the Trades Union Congress, and Digby Jones, director-general of the Confederation of British Industry, called for a "more open approach to public procurement". They claim this will "enable businesses to make more considered bids, take the necessary investment decisions well in advance and ensure that they have a workforce with the skills needed."

Engineering group Alstom recently blamed the lack of a "sustainable domestic market" for its decision to scale back its Birmingham train manufacturing site with the loss of 1,400 jobs. It expects to halve its workforce to about 5,000 within the next year.

Andy Scott, director of international competitiveness at the CBI, said suppliers needed longer lead times to help them prepare for contracts.

"Adding due consideration for the UK's industrial capacity into contracts will help to ensure an ongoing competitive supply base and end the 'feast or famine' situation suppliers find themselves in."

A Department of Trade and Industry spokesman said Hewitt would address their concerns at a meeting with industry groups and unions in London this week.

Meanwhile, the Department for Environment, Food and Rural Affairs launched a review of the public sector's procurement of food and catering services to help small and medium-sized suppliers bid for work more fairly.

Launching the scheme, Lord Whitty, food and farming minister, said he wanted to give UK farmers "a fairer crack of the whip" by awarding contracts on the basis of freshness, animal welfare and environmental issues rather than just value for money.

The move came as Britain's biggest milk processor, United Milk, went into administration. Up to 300 farmers who supplied the plant complained they had not been paid.

Alexis Brooks, lead procurement adviser at the Institute of Public Finance, said purchasers will face tough decisions on the criteria they can use to prioritise domestic suppliers within European Union competition law.

"Purchasers will have to think hard and be more explicit about the criteria they use in their supply contracts while still having to focus on saving money," she said.

"It will force buyers and suppliers together, and purchasers will have to find more innovative ways of collaborating, whether through more consortia of local companies or through workshops and forums."


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