North East construction companies calling for changes to public sector procurement policy have found support in the European Parliament.
The region’s three largest independent contractors – Newcastle’s Surgo Construction, County Durham’s Esh Group and Gateshead’s Tolent – say taxpayers are getting a poor deal as the current policy favours large national companies, whose profits end up in London, rather than in North East.
The campaign has gathered great momentum since it was launched a month ago, and now Lib Dem MEP, Fiona Hall, has written to the Cabinet Office expressing concerns.
After a meeting with the heads of the companies, she said: “Clearly, the current strategy of using national procurement frameworks is stacked in favour of the very large national construction firms.
“The result is that small and medium-sized businesses, vital to the North East economy, are being unfairly squeezed.
“There is real concern that the high turnover requirement is a barrier to regional companies and also that the framework approach does not necessarily produce good value for taxpayers in terms of the cost of individual projects.
“The Government needs to look again at the qualifying criteria it has set to ensure experienced, highly-regarded regional firms are not excluded from the process.
“All these companies are asking for is a level playing field.”
The companies’ main concerns revolve around the Building Priority Schools programme and the Scape framework.
Esh Group’s chairman Brian Manning said: “This is not just an issue for our three businesses, but it’s having a major impact on workload for all medium-sized construction companies across the country.
“We are making a stand on this and will challenge frameworks that aggregate construction contracts, insist on turnover criteria and claim best value for taxpayers on the basis of a beauty competition that has little bearing on outcomes”
Tolent chairman John Wood said: “We were all pleased to have the chance to talk to Fiona Hall.
“She mentioned that there are moves afoot in the European Parliament to revise the European Public Procurement Directive as SMEs in Germany are also being adversely affected, so hopefully we may see some fairness in the way that work is procured in the future.
“Operating with common sense would be a good start.”
Surgo chairman Ian Walker, meanwhile, said it was “encouraging” to see support growing”.
“I am delighted that Fiona Hall has made the time to meet up with us to discuss our views at length,” he added.
We are making a stand on this and will challenge frameworks that aggregate construction contracts