By Daniel Hunter
The government has announced new measures which will make it easier for small and medium-sized enterprises (SMEs) in London and the south east to win government contracts.
Minister for the Cabinet Office, Francis Maude, said the "radical new measures" will open up Government contracts to local SMEs "like never before".
Paying businesses on time is critical to the cash flow of smaller businesses in London and the South East where 57% of SMEs see late payment from customers as a hindrance to growing their business. Under the new rules, the public sector is now required to pay undisputed invoices within 30 days, and this requirement will now flow all the way down the supply chain.
Central government spent an £11.4 billion with SMEs in 2013-14, as new figures showed that a record 26.1% of government spend went to SMEs. The new data shows that central government spent 10.3% directly with SMEs, and 15.8% indirectly - meeting the aspiration it set in 2010 for 25% of procurement spend to be with SMEs by the end of this Parliament.
Research also shows that 44% of SMEs in London and 43% in the South East don't know where to look to find new business opportunities. Today the Government launched a refresh of its Contracts Finder website, at www.gov.uk/contracts-finder, offering a much improved search including by location.
The site covers current and future public sector contracts above £10,000 in central government and £25,000 in the wider public sector. It’s free to use, including from smartphones and tablets, and so businesses in London and the South East will be able to search for contracts close to them.
New legislation, which comes into force today ensures that:
- 30 day payment terms will be mandated down the supply chain - to suppliers and sub-contractors;
- Public bodies will have to publish an annual late payment report to sharpen accountability;
- The bidding process will be simplified across the wider public sector with complex forms, such as Pre-Qualification Questionnaires, abolished for low value contracts;
- The procurement process for public sector contracts will be accelerated.
Minister for the Cabinet Office Francis Maude said: “As part of our long-term economic plan this Government is overhauling public procurement to open things up to businesses of all sizes. I am so pleased that our reforms have ensured that innovative SMEs benefited from £11.4 billion of business last year alone. Over a quarter of central government spend now goes to SMEs but we know there’s much more to do to support small businesses in London and the South East and these new reforms show just how determined we are to finish the job.”
Lord Young, the Prime Minister’s Enterprise Adviser said: “Contracts Finder is a world first in terms of scale and ambition. It opens up government business like never before and levels the playing field for SMEs who in the past, didn’t know how to find public sector contracts, let alone bid for them.”
Piers Linney, Co-CEO of Outsourcery and member of the Government’s SME panel, added: “We know government business has been incredibly complicated and costly to bid for in the past, and that was reflected in the tiny proportion of spend going to SMEs. This new legislation and the new site create a huge opportunity for SME businesses with reduced cash flow risk. They need to educate themselves on their rights under the new legislation and really get under the skin of Contracts Finder to make sure they can seize that opportunity.”
Louise Goldsmith, Leader of West Sussex County Council, said: “West Sussex County Council has worked hard to promote the use of local SMEs. Encouraging the growth of businesses within the county is important to us and is something we strive to achieve.
“We are particularly proud to develop innovative procurement methods, like the Building Contractor Framework, which has been tailored to meet this need — as well as provide good quality and cost effective buildings that are well received by the people who use them.”