Future of public sector being debated

Nov 18 2009 By Andrew Hebden, The Journal

THE future of the public sector has been much debated in recent months as the spectre of swingeing cuts looms large.

There is no doubt that the sector accounts for an undesirably large proportion of the North East economy, as well as employing well over half of the working population.

But while recognising that the public sector is integral to the economic fortunes of the North East, there remains an ongoing debate surrounding the effectiveness of its engagement with the private sector.

Nowhere is this better illustrated than the thorny issue of public sector procurement, one of the most frequently cited sources of frustration for business owners in the North East. I have lost count of the number of times business people have voiced their bemusement at the failure of local authorities in the region in particular to source their goods and services from the providers on their doorstep.

There has been much effort expended on attempts to tackle this problem, and many reports written about the potential boost to the economy of just a small number of additional contracts going to firms based in the region.

The most startling figure is that frequently offered up by the North East Chamber of Commerce – that just 1% of extra spending each year could generate £1.35bn and 6,000 additional jobs for the region.

Whilst the campaigning efforts of the NECC and The Journal via its Think North East First campaign have certainly had some success in improving matters with some local authorities, it is hardly surprising that 80% of firms in the North East believe that winning work with the public sector is still too complicated. Anyone who has had the pleasure of completing a tender for such an organisation would surely agree that the process remains overly burdensome, so much so that many good quality North East businesses have given up even trying to win this work. The NECC today gives local authorities some credit for the progress made to date but says the pace of reform must speed up if the region is to begin to feel the full benefit from the significant public expenditure that goes on here.

Rarely has the spotlight been so focused on the finances of the public sector nor has the need for it to justify its spending been so great.

One way these bodies can prove their worth would be to demonstrate their willingness to work more effectively with local businesses – to the benefit of all.

Andrew Hebden is head of business at ncjMedia