Government business critical to SMEs in downturn, say Tories

29 October 2008
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29 October 2008 | Jake Kanter

Shadow chancellor George Osborne has called on the government to make it easier for small suppliers to access public contracts.

The Conservative MP said bureaucracy introduced by the Labour party had "locked out" small and medium sized businesses. He added that more government business would provide a crucial source of revenue for the firms during the economic downturn.

Osborne has set out a number of policies aimed at helping SMEs win public deals. The Conservatives would introduce a single pre-qualification questionnaire for contracts worth less than £50,000 and require that all deals worth over £10,000 be published online. Osborne said the party would hope to award 25 per cent of government contracts to small suppliers.

The Federation of Small Businesses (FSB) welcomed Osborne's proposals. National chairman John Wright said in a statement: "Opening up and simplifying the procurement process is a key element of the FSB's own survival package and would provide a vital boost to small businesses and the economy."

Earlier this month it was revealed nearly three-quarters of small businesses "rarely" or "never" bid on public sector contracts. The study of 500 firms by the FSB found 70 per cent do not regularly compete for government business (News, 30 October).

Following the announcement Treasury minister Angela Eagle said: "The Labour government has been on the side of small and medium-sized businesses from the start. That's why there are now around 750,000 more of them in the UK than in 1997." A spokesman for the Department for Business and Regulatory Reform would not comment on the number of contracts currently agreed with SMEs.

As reported, the government has set up a review to examine how to reduce barriers for SMEs to win government contracts (Web news, 17 June).


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