Government pledges to double contracts with SMEs

The Government plans to double its spending on public sector contracts awarded to small and medium sized enterprises (SMEs), from £3 billion to £6 billion, it has announced.

The figures, which have been revealed in a new report, coincide with a speech made my Prime Minister David Cameron and Cabinet Office minister Francis Maude one year ago that pledged to secure more business with smaller companies. According to the report, the Government is on track to increase its contracts with SMEs from 6.5 per cent to 13.7 per cent by the end of the year.

Making the announcement at the Public Procurement Briefing 2012, Francis Maude, minister for the Cabinet Office, also acknowledged that some of its previous promises to increase SME procurement had failed, saying: 'Governments may have been making positive noises about SMEs but they certainly weren't buying from them.'

It is hoped the package of new key measures will drive faster growth and progress in opening up the goods and services industry - worth £230 billion - to smaller companies, in turn improving the economy and saving money for taxpayers.

The key measures include a new flexible approach to IT contracts; focusing on smaller and cheaper solutions with more firms, prompter payment and an extension of the investigative Mystery Shopper service which allows SME's to complain about procurement procedures.

It also announced that greater transparency between both the Government and SME procurements, and its contracts between larger private sector firms, should take place.

Speaking at the briefing, Francis Maude said: "We said we wanted to improve things for smaller businesses and today we have shown that the measures we introduced a year ago are making a difference.

"Governments might be able to print money but it is SMEs who make it - successful SMEs are crucial to the future of this country and can save taxpayers' money with innovative new ideas.

"Doubling the amount of business going to these companies is no small feat but we will now go further.

"We are determined to shake up public buying so radically that there is no turning back to old days of SMEs being shut out."

Commenting on the announcement, the Confederation of British Industry's (CBI's) head of enterprise and innovation Dr Tim Bradshaw, said: "The progress which the Government has made enabling SMEs to supply it with goods and services - whether directly or through supply chain partners - is to be welcomed.

"Winning a contract to supply goods and services to the Government can provide a vital springboard for businesses looking to expand their operations. It is positive that the Government is becoming more open to the potential for innovative ideas and delivery from companies of all sizes."