Council to Focus on Forging Links with North Yorkshire's Smaller Businesses

Closer links with thousands of smaller businesses which form the foundations of North Yorkshire’s economy are set to be built upon to support council services across the county.

North Yorkshire Council says that small and medium-sized businesses as well as organisations involved in the voluntary and community sector are already a key focus for the award of its contracts to deliver services.

However, more support and guidance are set to be given by the council to help small and medium-sized enterprises (SMEs) and voluntary and community and social enterprises (VCSEs) compete effectively with their larger competitors to secure public sector contracts.

The scale of opportunities with North Yorkshire Council is expected to see more than £600 million spent on contracts with the private sector during the current financial year alone.

It's hoped that the launch of a single authority to cover the whole of North Yorkshire will bring in millions of pounds of savings by having contracts for a single organisation, helping counter the challenging inflationary pressures amid the cost of living crisis.

North Yorkshire Council’s leader, Cllr Carl Les, said:

“We recognise the important role that smaller businesses play in the success of North Yorkshire’s economy, bringing in vital investment and supporting tens of thousands of jobs.

“As a council, we have a firm commitment to helping these smaller enterprises flourish, and they are key to helping us deliver services to hundreds of thousands of residents across the county.”  

North Yorkshire’s economy is heavily slanted towards smaller businesses and there is a total of more than 32,700 micro, small and medium-sized enterprises alongside 90 large businesses in the county.

Contracts with SMEs worth hundreds of millions of pounds were signed by the previous eight authorities that merged to form North Yorkshire Council, which launched at the start of April.

The former North Yorkshire County Council alone spent £549 million on procurement during the last financial year, including £269 million with SMEs – 55 per cent of the total figure.

Of the 5,021 suppliers which the county council worked with during 2022/23, a total of 2,765 were SMEs and the stated ambition is to increase this number even further with the launch of the new authority.   

In 2022/23, 55 per cent of the total spend was within the local economy, which resulted in the county council working with 2,145 local suppliers. A total of £62 million of the county council’s spend – the equivalent of 11 per cent - was with 703 regional suppliers.

By joining up services and maximising spending power in its first few years, North Yorkshire Council says it is set to recoup between £30 million and £70 million, which will become annual savings.

However, it says the high rate of inflation and growing demand for services such as adult social care will mean difficult decisions and creative solutions will be needed to realise the multi-million pound savings.  

North Yorkshire Council’s deputy leader and executive member for finance, Cllr Gareth Dadd, whose portfolio includes procurement, said:

“The opportunities that we have now as one council to provide efficiencies of scale by signing contracts for a single organisation are set to bring millions of pounds of savings.

“These will be especially important as we face such a challenging financial situation with the current level of inflation and the cost of living.”

An SME called Go4Growth was recruited in 2021 to design a programme to bridge the gap between smaller enterprises and the public sector.

This work has helped smaller, local and diverse organisations to develop the practical skills to enable sustainable growth through accessing and securing opportunities with the public sector.  

Go4Growth offers free support for companies aiming to work with the council and other public sector organisations. Through this partnership, 250 suppliers were supported in 2021/22, with 86 per cent categorising themselves as micro-businesses or sole traders and 14 per cent stating they are small businesses.  

Go4Growth’s director, Gill Askew, said:

“Since we were recruited in 2021, we have built strong and productive working relationships with the public sector in North Yorkshire.

“We have been able to deliver support to SMEs and VCSEs across the county to hundreds of local providers.

“The single council will provide greater access to a broader marketplace of providers who want to secure growth within the public sector, both directly and indirectly with the authority.

“It means that we will be able to increase the breadth of support we are giving, ultimately supporting more local economic development.

“We’re really excited about what the future has to offer and we’re looking forward to providing more support to help North Yorkshire’s businesses and voluntary organisations to grow.”

In the past 12 months, one of the largest procurement exercises, the Social Care Approved Provider Lists which delivers support to people in residential settings, their homes or providing day services, has been secured.  

The work involved in the exercise highlighted some of the barriers which the VCSEs and SMEs report when trying to do business with councils.  

A tailored engagement programme was developed to support providers through the application process and encourage more smaller enterprises to engage with the public sector. So far, 70 per cent of providers - a total of 216 - which have been appointed to the list in North Yorkshire are SMEs.

The new Procurement Bill, which is due to be introduced by the Government within the next year, will provide more opportunities of making procurement quicker, simpler and more transparent while still delivering value for money and including specific criteria in deciding the award of contracts.

It is hoped that this will level the playing field for SMEs and drive economic growth across the UK by reducing costs and making it easier for businesses which are bidding for contracts.

Go4Growth is staging a series of events to help smaller enterprises forge ahead with securing contracts with the public sector. Topics include finding opportunities in the public sector, writing policies, and promoting businesses, and more details are available at https://go4growth.co.uk/events