BOSSES at an historic engineering business have urged Chancellor George Osborne to give smaller firms the chance to win more Government contracts.

Henry Williams Limited, which has been in Darlington for more than a century, is extending its range of services with the addition of a £250,000 test house.

The innovative firm employs 110 people at its North-East site where it designs and makes specialist parts for the road and rail industry. But managing director Andrew Nelson believes he could recruit dozens more if British SMEs were given a fairer crack at public sector contracts.

He said: “We are very bad in this country at spending our money with foreign companies instead of making sure we are spending it on UK-owned-and-run business.”

He accepts that investment from large overseas businesses, such as Hitachi, Gestamp Tallent and Nissan, is crucial to the success of the regional economy, but he added: “What we are looking for as an SME isn’t favouritism but for the Government to support small firms, which are in the main UK-owned entities, to get into the public spending supply chain.

“The problem I find is they (the Government and public agencies) award massive tenders worth say £30m a year with hundreds of products lines to one big national business.

“The risk is if you award it all to a big entity they farm some of it out but they say: ‘we’ll take a bit from Poland or Spain or China’. I look at the price they pay these foreign suppliers and think, ‘I could have done that for you’. What the Government needs to do is to gear their procurement strategy to support British SMEs.”

Mr Nelson congratulated the Government for putting its house in order regarding how the public sector now settles contractors' bills within 30 days. He said: "I like that. They have delivered on that promise and it has made a big difference. Let’s now do the same with SME contracts.

“If we don’t do it the UK’s SME base, which is very often much more innovative, adaptable and resourceful than the bigger groups, won’t unlock its potential. For example, I could put another 30 to 40 people on this site no problem. Us creating work here has a knock-on effect to the local firms we deal with."

Investment in the new test house at a converted building beside Henry Williams' foundry, electrical workshops and design facilities on Dodsworth Street means the firm can now offer customers a one-stop-shop. The firm is hosting an open day on November 5 when local businesses can take a look around the facility which has helped to create jobs.