Dragons' Den star Piers Linney has called for pressure to be put on the government to collect data on business owners to help increase the amount of contracts going to ethnic minority-owned businesses (EMBs).
Linney, joint CEO of Outsourcery, told an event that Companies House required no details of ethnicity when people registered as directors but data collection was necessary as a first step to increasing the participation of EMBs.
He also told delegates at a MSDUK policy summit on inclusive procurement at the House of Lords that more business role models from ethnic minorities were needed, along with more support from banks.
“An awfully small percentage of minority-owned firms have received institutional capital to scale up,” he said, during a discussion on making public sector procurement inclusive.
John Michalski, head of strategic sourcing at the Department for Work and Pensions (DWP), said it would be looking to new frameworks and targets in contracts to engage more SMEs as new welfare-to-work deals are drawn up.
He said including stipulations around the use of SMEs in national contracts was one of the options being considered to help central government achieve its target of routing 25 per cent of spend through SMEs.
He said that contracts could contain a “code of conduct which outlines how we expect prime contractors to work with SMEs and to encourage them”.
Michalski said DWP spent £1.1 billion a year on welfare-to-work programmes and SMEs were “able to provide a lot greater innovation and outcomes at a local level”. “The big challenge is how we do that most effectively,” he said.
He said the G-cloud offered the opportunity to establish locally-based frameworks made up of SME suppliers that would “take away that huge cost barrier to participation”. “Disaggregation” was another option. “I don’t think we will see those large contracts of the past,” he said.
Arnab Dutt, CEO of polyurethane manufacturer Texane, said the UK was “20 to 30 years behind America” in terms of public sector procurement helping to achieve socio-economic equality. “The messages that inclusivity makes really good business sense are not getting through,” he said.
“We don’t have enough role models showing the diversity and richness of the country we live in. We haven’t reached an adequate level of social maturity in this country, otherwise we wouldn’t need MSDUK.”