Government unveils proposals to boost SME spend

18 September 2013

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19 September 2013 | Will Green

The government has announced proposals to streamline the process of bidding for public sector contracts to encourage more SMEs to take part. 

Under the plans pre-qualification questionnaires will be abolished for low-value contracts and a single set of principles will be established that public sector bodies will use to buy goods and services, to standardise the advertising, bidding and payment of public deals.

SMEs represent 99.9 per cent of the UK’s 4.5 million businesses, but just 10.5 per cent of central government spend goes to them, against an “aspiration” of 25 per cent by 2015. 

Cabinet Office minister Chloë Smith said: “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.

“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.”

The measures also include improved payment terms and a requirement for all public sector contracts over £10,000 to be advertised on the same website. 

A consultation on the changes runs until 17 October.

The CBI welcomed the proposals. Jim Bligh, head of public services reform, said: “There is huge potential for smaller firms to supply the public sector with goods and services but too often the bureaucracy barrier is too high.

“Opening up public services markets to lots more companies will boost competition and means the government and the taxpayer will pay less.”

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