By Max Clarke

The Federation of Small Businesses (FSB) has welcomed the Government’s commitment to overhaul the way that small businesses will be able to compete for public sector contracts, through cutting red tape and being more open and transparent.

Public sector procurement has long been an issue for small businesses, with 70 per cent of SMEs rarely bidding for public sector contracts due to a lack of awareness of the opportunities that are available and the red tape surrounding the application process.

For many small firms, access to public sector contracts comes through local government — with 27 per cent of FSB members supplying this sector. The FSB has long campaigned that local government is more transparent in the contracts that it has available, in the same way central government is, and the commitment to do this is a welcome step.

Recent research into small firms’ access to public procurement markets across the EU places the UK 24th out of 27 member states, with only 24 per cent of contracts going to small firms, compared to 44 per cent in France.

Small and micro businesses do particularly badly in the UK, with only an estimated 11 per cent of the total value of contracts being awarded to businesses of that size. This is despite the fact that small and medium-sized enterprises (SMEs) account for 49 per cent of the UK’s turnover.

The FSB is pleased that the Government has recognised that these barriers exist and has committed to making the process simpler. The initiatives, such as the reform of the pre-qualification questionnaire (PQQ) process and more transparency through a new contracts website, as well as providing a dedicated voice for small firms’ views to be heard, will mean more small businesses having the potential to access work.

John Walker, National Chairman, Federation of Small Businesses, said:

“The FSB has worked hard to ensure that small firms have the same access to public sector contracts as big businesses. The measures outlined today, which look to remove red tape and open up more transparent channels of communication, are most welcomed.

“These measures will now need to be accompanied by a genuine cultural change within Government procurement in terms of its approach to dealing with small businesses.

“Removing the need to fill in a PQQ for smaller contracts is a bold move but it is vital that something more bureaucratic or confusing does not emerge in its place. We hope the promise of a dedicated voice for small suppliers within Government will help to prevent this.

“The good thing is that the Government is going to publish figures on the amount of contracts going to SME’s so we will be able to measure its success and hold the Government to account if it is not working. That type of measurement and transparency is something we’d like to see adopted more widely across the public sector.”