Dr. Paul Davis:

As part of a recent review I carried out for Enterprise Ireland, I examined the models in Ireland, Wales, Scotland, England and Northern Ireland. One model - the local multiplier methodology - provides answers in terms of a number of the questions the Deputy posed. The local multiplier methodology looks at developing local economic benefits, so it is used as a measure in the context of awarding contracts. In other words, one examines the local economic benefits for investment by public authorities. It can, therefore, be built in as part of the most economically advantageous tender, MEAT, criterion. That takes into account how organisations re-spend their money back into local economies. The UK's Centre for Local Economic Strategies has discovered that small firms will re-spend 49p in every £1 they receive back into local economies, whereas large firms only re-spend 31p. There are models in action at this point and these are being adopted and rolled out across the UK. The attitude relating to them is "There is a better way of doing this" and "If we look at small companies, then we can actually place an economic value on what will be the spend locally".

On the question of a separate working group for micro-enterprises, it is worth revisiting the first question on the figures and statistics that are available. For the last three years, we have been working with the National Procurement Service and the Office of Government Procurement on a survey through e-tenders aimed at collecting information on how the market is made up and what are the reactions of buyers. Between 2011 and 2014, an average of 50% to 51% of companies bidding for tenders were micro-enterprises employing between one and nine people. Current policies are addressed at small to medium sized enterprises which employ between ten and 250 staff. As to whether we have policies that represent 50% of the bidding companies, it certainly should be considered. In terms of why and where they are competing, 30% of companies bid for local business within 120 km of their home bases. Only 20% of all businesses which replied to e-tenders sought business outside the Irish economy. When we hear policies stating that we are using public procurement to drive exports, we should bear in mind that only 20% of the companies competing for public procurement business are interested in exports. The other 80% are interested in competing nationally. When we develop centralised national policies, we run the risk of alienating those small businesses and not having them participate. We should be considering them as part of our policy and a more proactive approach should be taken.