Pilot opens door for smaller firms to bid for council jobs up to £213K

A new pilot procurement scheme in Greater Manchester will help smaller companies win public sector contracts from their local council.

The pilot has been launched by STAR Procurement – the organisation that looks after the procurement requirements of four councils in GM and another two from the Liverpool City Region – and uses an AI powered digital platform to ‘matchmake’ lower value council contracts with small, local businesses. 

The scheme – the first of its kind in the UK – should ensure businesses are at the front of the queue to deliver goods and services needed by their own local authority and should see significantly more town hall cash being spent within their own borders to help create growth and jobs in the regional economy.

Stockport, Tameside, Trafford and Rochdale councils who together make up STAR in GM, have all agreed to take part in the pilot.

The pilot will introduce a simple, quick and easy route to winning town hall contracts not reliant on complex e-tendering portals. The pilot will initially focus on lower value contracts under 50k, although this will be reviewed as the pilot progresses and could go up to as much as £213k.

Greater Manchester Mayor, Andy Burnham said the pilot was part of his ambition to create “a more inclusive economy” in Greater Manchester. “By keeping spending local, we can ensure the benefits are felt by our people and communities,” he said.

Director at STAR Procurement, Lorraine Cox, who has been the driving force behind this pilot said she was confident it would deliver benefits in spending the public purse locally, and would strengthen relationships between the public sector and small and medium businesses.

She said: “This pilot will test a proof of concept, and contracts will therefore release in small phases to allow STAR to assess processes and impact. We anticipate success and therefore intend to widen the scope in the future.”

The Federation of Small Businesses (FSB) says the project could be opened to other councils in the city region, something it has been campaigning for since 2022.

FSB claimed its research shows most small businesses typically regard council procurement as overly complicated, time consuming, and out of reach.

Robert Downes, Development Manager for the FSB in Greater Manchester, said: “This means many new contracts will be up for grabs for the first time with the clear aim to award to local businesses. These will be new opportunities for the smallest firms to deliver public sector contracts, minus the quite onerous processes that more expensive town hall contracts incur during the established procurement process.

“For councils, it means they could and should be getting better value for taxpayers’ money by opening up contracts to many more business, and spending locally which we know helps create wealth in our communities. It’s a real win-win for the public and private sectors particularly at a time when budgets in all sectors are under pressure.”