A LEADING North-East business figure has branded legislation which may prevent public bodies buying goods and services locally as unsustainable and unfair.

The North-East Chairman of the Institute of Directors (IoD), Richard Elphick, has given his backing to The Northern Echo’s Buy NorthEast campaign, in conjunction with the North-East Chamber of Commerce, which encourages councils to award more contracts locally.

It comes after the IoD teamed up with the Confederation of British Industry (CBI) to encourage councils and local government representatives to buy local services and goods. Mr Elphick said that the IoD, which has more than 600 members in the region, realised that businesses had to operate within the purchasing criteria of the European Union.

This requires public authorities or any organisation with the benefit of public grant aid, to allow open national and Europe-wide competition for securing services and goods. But he feared the laws, to prevent what is considered to be protectionism, would have some impact on initiatives to encourage buying locally.

Mr Elphick said: “For one thing, this is not very sustainable as it usually involves wasteful travel and vast amounts of paper for ‘due diligence’ to prove ‘transparency’.

“Nor is it usually very fair. The person responsible for making the decision may have to compare a small boutique local supplier, who could do a perfectly good job, with a large national company or multinational that has a seemingly strong ‘critical mass’ or is well-positioned at being able to tick every box of the usually very lengthy prequalification criteria. The decision is usually obvious. The large nationally recognised ‘mackerel’ is often be chosen over the local ‘sprat’.”

Mr Elphick believes that buying locally would provide a boost to the regional economy, adding: “This is an excellent strategy as it is proven that for every £1 spent on a local service or supplier at least 80 pence is reinvested and spent in the locality.

Equally, if a supplier of services is appointed from outside of the region much less than ten pence of the £1 is spent locally.

He said: “I would encourage businesses in the region to always try to buy North-East products and services and support home market if for no other reason than our goods and services are as good as, if not better than, the rest of the UK and Europe and we must depend upon the success of our local businesses to get through the recession.”