THOUSANDS of North-East construction jobs could be at risk unless the Government gives companies a fairer chance to win public sector work, industry leaders have warned.

Bosses behind the region's three largest independent construction contractors say the bidding process is flawed because it favours national firms that wastes taxpayers' cash and threatens workers' livelihoods.

The warning comes after a National Federation of Builders study revealed about 40 per cent of small and medium-sized construction firms are failing to win 90 per cent of public sector contracts.

Ian Walker and John Wood, chairmen of Newcastle-based Surgo and Tolent Construction, in Thornaby, near Stockton, respectively, and Esh Group chief executive, Brian Manning, told The Northern Echo there were signs of a growing North South divide.

The trio, whose firms have been trading for a combined 180 years and employ more than 1,500 workers, said: “The public sector procurement strategy is delivering a poor deal for the taxpayer, threatening the future of many highly-skilled firms and workers' livelihoods.

“There has been a great deal of publicity about the construction industry downturn due to public sector spending cuts, but in the North, the situation is much worse.

“The national strategy for public sector work favours the largest national companies, emphasised by the procurement panel for the priority schools building programme.

“It is impossible for firms the size of ours to qualify for a place on these panels, and the Government’s strategy has been shaped by large construction companies who say this will save money.

“Its Scape Framework, used for local authority procurement, requires contractors to have an annual turnover of more than £500m to work on jobs starting at £2m, but few regional contractors fit this criteria, even though they are more than capable of doing the work.

“The questionable concept of value is no more clearly demonstrated than in the North where the Scape framework has only one contractor on it.

“Without the element of competition, how can there be any guarantee of competitive pricing or best value for the taxpayer?”

The campaign has received support from Durham MP, and shadow planning minister, Roberta Blackman-Woods, who has called for greater competition between firms, which would build skills and boost the economy.

The construction leaders added: “We develop and grow our own senior teams and use the local supply chain to ensure construction spending stays in the region where the contract is.

“Ten of the contractors on the northern framework panel are headquartered in the south, therefore surpluses made on projects undertaken in the North all disappear straight down the M1.

This means that the North is once again left without employment for local people and the knock-on effect down the supply chain is massive.”