CAMPAIGNERS behind efforts to get North-East authorities to spend money with local firms have urged councils to review contracts with foriegn companies to check they still get value for money.

The value of the pound has fallen over the past year, making the true cost of goods and services from abroad far more expensive.

Now, the people behind the Buy North-East campaign are warning that councils may now be paying significantly more for those contracts.

Buy North-East is run by The Northern Echo with the North-East Chamber of Commerce (NECC) to encourage councils to contract more work to local companies.

Research by NECC has shown that if every council spent only one per cent more each year with regional firms to 2016, the regional economy would grow by £1.35bn and 6,000 jobs would be created.

The effect contracting work locally can have was shown last week, when construction firm Esh Group revealed it had contributed £357m to the North-East economy in 2007 through sourcing services from the region.

Ross Smith, head of policy and research with NECC, said: “Given the erosion in the value of the pound, any contract that public sector bodies pay for in another currency is going to be costing more than it was a matter of months ago.

“Where these contracts are available for review, we would be urging them to re-assess the value they are getting.

“The Buy North-East campaign is not about cost-cutting – rather it is about recognising the additional value that good public sector procurement can bring. Buy North-East was launched to illustrate the added value that the public sector can bring to the local economy by awarding contracts to businesses in the region.

“Money spent with firms in the area re-circulates the economy many times which has a significant impact on our future prosperity.”