Supply chain · 6 October 2016

Government pressed to guarantee fracking works for small firms

The government has given the go-ahead for the UK’s first fracking site, with a second site in the pipeline

As the government gave the green light for the UK’s first fracking site in Lancashire, calls have already come to ensure an inclusive supply chain that offers opportunities for small firms in the region.

Energy firm Cuadrilla has been given planning permission to drill for shale gas at a site at Preston New Road, Lancashire, overturning the will of local councillors.

Commenting on the ruling, Mike Cherry, national chairman of the Federation of Small Businesses (FSB), clarified the organisation’s position in helping small firms gain the best commercial deals, and emphasised the responsibility of market leaders in guaranteeing opportunities for local businesses.

In a statement, Cherry said: “If an onshore oil and gas industry develops and expands in the UK, the emerging players in the market must back small and micro businesses in their supply chains. This will be a key focus for the FSB, working with the industry and regulator.”

The latest calls from the FSB echo demands made last year from the body that urged the government to directly intervene to ensure contracts and supply chain opportunities prioritised UK firms.

In an interview with The Journal in September 2015, Allen Creedy, chairman of the FSB’s energy, water and environment policy unit said: “We can’t afford to let this opportunity slip away from small and medium sized businesses. We don’t want the commercial benefits of fracking to go overseas. We need to make sure British businesses reap the rewards.”

Speaking to businesses at an FSB-hosted event in Darlington that same month, Allen argued that “decisions on horizontal fracking must be taken by local people and local businesses”.

A report released in April 2014 and commissioned by the UK Onshore Operators Group claimed that the financial potential of the UK’s shale gas and oil industry was worth tens of billions of pounds in supply chain opportunities.

The group noted that steel manufacturers in particular stood to benefit from the vast amount of equipment needed on fracking sites, and urged firms to begin preparing for opportunities.

However, a separate report conducted by the Institute of Directors – and commissioned by Cuadrilla – suggested that the UK was poorly equipped in terms of skilled workers, infrastructure and equipment.

Similarly, the offshore wind industry in Britain has been criticised for failing to offer opportunities for UK firms. A report released by the Civitas think tank claimed that “the multi-billion-pound-a-year offshore wind business could have been carved up entirely between British firms”, had the government acted more effectively in ensuring a local supply chain before relying on foreign investment.

Read on to find out how to find the perfect suppliers as a new business.

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Simon Caldwell is deputy editor at Business Advice. He has a BA in politics and communications from the University of Liverpool, and has previously worked as a content editor in local government and the ecommerce industry.


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