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Big government gives small business helping hand

The government has announced new measures to help smaller businesses to win a bigger share of government contracts, writes ICAEW Head of Enterprise Clive Lewis.

Clive Lewis

May 2018

The government has launched a package of tough new measures designed to level the playing field for smaller businesses bidding to win government contracts.

Cabinet Office minister Oliver Dowden last month revealed proposals to exclude suppliers from major government procurements if they cannot demonstrate fair and effective payment practices with their subcontractors. Other plans include allowing subcontractors to have greater access to buying authorities to report poor payment performance, signaling the government’s commitment to improving payment practice in the UK.

Further requirements mean suppliers will have to advertise subcontracting opportunities via the Contracts Finder website, and to provide the government with data showing how businesses in their supply chain, including small businesses, are benefiting from supplying to central government.

The prime minister has also requested cabinet ministers to each nominate a small business champion minister in each department to ensure that SMEs are given a fair opportunity.

This package of measures is designed to ensure that more businesses - including smaller firms - will be able to supply goods and services to the public sector, while also making public procurement more transparent.

In the most recent figures from 2015/16, the government spent £5.6bn directly with small businesses. When sub-contracts to small businesses from larger suppliers were taken into account, total spend rose to £12.2bn.

Dowden, who is Minister for Implementation in the Cabinet Office said that the government is committed to levelling the playing field for smaller suppliers to win work in the public sector. The government’s target is that 33% of its procurement spend should be with small businesses by 2022.

Emma Jones, the government’s Crown Representative for Small Business, commented that these measures demonstrate the government’s clear commitment to small business, ensuring they can easily find and access new opportunities to supply to government.

Clive Lewis is ICAEW Head of Enterprise

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