By Daniel Hunter
Plans to make it simpler and easier for smaller businesses to bid for and win work across the entire public sector, including local authorities, across the East Midlands have been announced by Cabinet Office Minister Chloë Smith.
Accounting for 99.9% of the UK’s 4.5 million businesses, SMEs are a crucial engine for growth. Building on central government reforms to make its business more accessible to small and medium sized businesses, and recognising good practice across the wider public sector, the Government has launched a consultation taking forward Lord Young’s recommendations to create a SME-friendly ‘single market’ for public procurement.
Suppliers who want to do business with the public sector will be able to expect all organisations to follow a single set of principles when buying goods and services. The proposals will simplify and standardise how public contracts are advertised, bid for and paid for across the public sector.
Chloë Smith has also written to all MPs in the East Midlands, asking them to approach their local authorities to make sure they are doing everything possible to support SMEs and ask them to publish their contract opportunities on the Government’s Contracts Finder website.
“With £230 billion per year spent on goods and services right across the whole public sector, Government wants to seize the opportunity to help hard-working SMEs get on by competing for and winning this business," Chloë Smith said.
“Ambitious small and medium sized UK businesses are increasingly showing how they can contribute to our economic recovery by delivering innovation and excellent value for money, but historically SMEs have been shut out of government business. In the past bidding for public sector contracts was time-consuming, expensive and overly bureaucratic.
“Removing barriers and setting out a consistent, single set of SME-friendly principles for the whole public sector will provide the right support to encourage significant business and growth opportunities for SMEs, and help give the UK a better starting position in the global race.”
Lord Young, the Prime Minister’s Enterprise Adviser said: "I am pleased with Government's response to my proposals, reflecting not only the huge growth opportunities that public procurement can offer small businesses but also the significant value these suppliers are delivering to all parts of the public sector. I want this to increase to reflect the growing number and importance of small businesses in the UK today.
"For this to happen we need to improve small businesses' access to the public procurement market by removing the bureaucratic processes and poor payment practices which stop and discourage SMEs from making winning bids for contracts."
The consultation proposals include:
- Introducing a requirement for all public sector contracts over £10,000 to be accessible on the same site;
- Banning burdensome pre-qualification questionnaires for low value public sector contracts, and introducing a single standardised requirement for high value contracts; and
- Ensuring suppliers further down the supply chain benefit from the same standard payment terms that public bodies offer prime contractors to ensure prompt payment for public sector work.
Since 2010 there has been considerable progress in central government and many other parts of the public sector to open up the procurement process to SMEs. Burdensome Pre-Qualification Questionnaires (PQQs) have been removed for almost all central government contracts below £100,000, and the proportion of central government spend with SMEs on goods and services is increasing.
Since 2011, 12,900 of opportunities have been published on Contracts Finder to help SMEs spot opportunities more easily, whilst new procurement methods have stripped out unnecessary waste from the process and halved timescales.
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