POLITICIANS from all parties regularly tell us that small and medium size enterprises (SMEs) are the driving force behind the British economy.

If this is true, then why do public sector procurement policies ignore small businesses, particularly in the construction industry?

Increasingly, public sector organisations, such as local authorities, hospitals and government agencies, are moving away from deals with small local contractors towards trading solely with a few large national contractors.

In my opinion, the reason behind this move is the short-term goal of economic efficiencies such as lower prices.

But these efficiency advantages are often disputed as false when judged against the wider benefits that small businesses bring to local and national economies.

It is widely accepted that, compared to large companies, SMEs recruit and employ locally, they also invest more in training and development of their skills base using schemes such as apprenticeships and adult training programmes.

This yields tangible long-term benefits for local people in employment, training and skills. Yet instead of policies that encourage small business development, public procurement is not doing enough to involve small business.

More than 80 per cent of the total UK construction market is dominated by less than 20 major national contractors.

It does not make sense to have policies that further reinforce the dominance of these major contractors by rewarding them with large framework agreements, thus increasing their share of the market and making them gatekeepers to work SME sub-contractors.

The model currently being used by most public sector clients is tipped in favour of large companies.

Packages of work are bundled into large contracts.

These contracts are awarded by tender to one or a few major national contractors.

Many of the small works that have been bundled in these packages would previously have been tendered to small, local companies.

Regrettably, this is no longer the case.

Instead, small companies are encouraged to become subcontracted suppliers to major contractors for their work, thus making the major contractors gatekeepers, to the market for SMEs.

This model of working may be suitable for some specialist SME, companies. However not all SMEs work this way.

Given the current economic downturn and competitive construction prices, there are concerns that public sector clients have made the wrong decision by entering into long-term framework agreements.

By entering into these agreements they are shutting themselves off from the benefits of open competition in the wider market place.

As the owner of a local SME I do not hear any politician properly defending the case for small business in public sector procurement in construction.