Research from the FSB shows that there is a direct correlation between the size of a business and its chances of winning public sector contracts from local and central Government.

According to the survey of 18,000 businesses, less than two-fifths of firms with turnover of under £25,000 have dealings with local authorities, compared to two-thirds of those with £1 million-plus revenues, with a similar story for central Government.

The FSB has made a formal approach to the Office of Fair Trading, calling for a market study and claiming that the current system distorts the public sector and contravenes the Competition Act.

The Government recently announced the launch of a national portal designed to help smaller firms bid for public sector contracts, but this is not enough for the FSB.

“Despite the numerous Government reports and initiatives, the ability of a business to win a contract with the public sector is still directly related to its size,” says Tina Sommer, FSB Trade & Industry chairman. “The time has come for the OFT to finally ensure that small firms get a fair share of the £117 billion of taxpayers’ money that the public sector spends every year.”