UK government reaches 25 per cent SME spend 'aspiration'

Will Green is news editor of Supply Management
27 February 2015

The UK government has announced it has achieved its “aspiration” to channel 25 per cent of central procurement spend to SMEs.

In 2013/14, central government spent £11.4 billion with SMEs, representing 26.1 per cent of spend. This was made up of 10.3 per cent spent directly with SMEs and 15.8 per cent spent indirectly.

The government has also announced an overhaul of the Contracts Finder website to make it easier to bid for government contracts.

Philip Sinclair, head of innovation and growth in the Cabinet Office, told a launch event: “It’s totally different, everything about it has changed. We have spent a lot of time looking at how the procurement process works.”

The new site is searchable by geographical area, industry and government department, with standardised information.

Sinclair said the site was designed to encourage pre-procurement interaction with suppliers so they can “shape the subsequent procurement”. “We are encouraging procurement to start with the problem they want to solve,” he said.

The site also has a click-through to the mystery shopper scheme to make it easier to report wrongdoing.

Lord Young of Graffham said the new site came against the background of the abolition of pre-qualification questionnaires for contacts below €200,000 and payment terms of 30 days, for both prime and subcontractors. “The real thing that will bring it all together is this site,” he said.

He added contracts worth £5 billion in total were on the site but the amount “is going to go up substantially very quickly”.

“My ambition is we get everyone to use this site, not just the public sector,” he said.

Emma Jones, founder of SME support organisation Enterprise Nation, said she was trying to encourage tier one suppliers to use SMEs and she suggested events could be organised to connect public sector buyers with small businesses.

“What we are saying to tier one suppliers is put some small businesses in your supply chain because if you do, you might be more likely to get a government contract,” she said.

Simon Lydiard, deputy director group procurement at the Department for Transport, said his department was spending 32.4 per cent with SMEs.

He said they had achieved this by simplifying procurement processes, promoting the use of SMEs to buyers and breaking down big contracts. Singling out professional services, he said: “I am fed up of paying too much money to big firms."

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