Government courts small businesses

1 May 2007
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02 May 2007 | Paul Snell

Small businesses should be able to gain greater access to public sector contracts after the launch of two government initiatives.

The Ministry of Defence (MoD) is to lower the threshold at which contracts have to be advertised. From the end of April contracts for "warlike" goods and services, such as weapons and armoured vehicles, will be lowered from £500,000 to £93,000. At the end of June it will be cut again to £40,000.

Thresholds for "non-warlike" goods and services such as furniture and catering will also be lowered to £40,000 by the end of June. The MoD hopes these measures will generate an extra 7,000 adverts a year in the Official Journal of the European Union. The changes are part of the MoD's 10-year buying plan, the Defence Industrial Strategy.

Lord Drayson, minister for defence equipment and support, said: "SMEs represent a significant core of direct suppliers to MoD. Today's announcement will further promote a dynamic and competitive supplier base."

Meanwhile the Department for Trade and Industry (DTI) has announced a new Small Business Forum, to discuss issues that affect SMEs, such as access to government contracts.

The forum will be chaired by Margaret Hodge, minister for industry and the regions. Members will include small business owners and membership bodies such as the CBI, Forum of Private Business and Federation of Small Businesses.


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