MPs accuse Maude of breaking promise to SMEs

13 February 2012

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13 February 2012 | Angeline Albert

The Cabinet Office has come under fire for failing to help small- and medium-sized enterprises (SMEs), following a near 4 per cent decline in the department’s procurement spend with this group.

Despite its target to award 25 per cent of government contracts to SMEs, Cabinet Office minister Francis Maude and his team faced a grilling from MPs in the House of Commons last week for figures that presented the department’s own SME record.

Barnsley East Labour MP Michael Dugher said: “Figures on the minister’s own departmental website show the percentage of procurement spend with SMEs at the Cabinet Office has fallen from just under 11 per cent to 7 per cent, a decline replicated across Whitehall.” 

Maude insisted it was "simply not the case that things are getting worse", arguing that “the value of contracts being given to SMEs is rising markedly from the very low base that we inherited".

Ministers have also been accused of reducing the value of government contracts awarded to smaller firms, with claims businesses are being ‘taken out’ of procurement, instead of being put in. Labour MP Ann McKechin asked Maude about the "unacceptable" conclusion from government commercial representatives that it would take up to two years before SMEs would stop being excluded from government contracts.

And Labour MP Luciana Berger echoed the comments of the Cabinet Office SME advisor Mark Taylor, who is also CEO of Sirius, who was appointed to lead the department’s New Suppliers to Government working group. He said there were "SMEs being taken out of procurement, not put into it".  

Berger added: “Taylor said government policies are making it more difficult for SMEs to take part in government procurement, rather than easier.” 

In response, Maude said the government had made "significant progress" towards its target of 25 per cent of government contracts to SMEs by “more than doubling" the amount of direct spend awarded to SMEs in the first half of the current year. He said he “fully accepted” it would take “a little time to get things fully sorted out” following the way things were left by the previous government.

Open source software specialist Taylor has said: "My experience of listening to [Cabinet Office minister] Francis Maude and the prime minister is that they are sincere, but, like similar government programmes, it's proving harder once it reaches Whitehall."

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