Boost for SMEs as public sector makes life easier

WINNING public sector contracts should be easier for small and medium-sized businesses in the region to do thanks to new government measures.

Under the new rules, the public sector is now required to pay undisputed invoices within 30 days and the bidding process will be simplified to abolish complex forms for low-value contracts.

The measures will help improve SMEs’ cashflow – data suggest that 56% see late payment from customers as a hindrance to growing their business. Research also shows that 37% of SMEs find putting together bids for new business too time consuming.

Central government spent a record £11.4bn with SMEs in 2013-14, representing 26.1% of government spend went to SMEs. The new data shows that central government spent 10.3% directly with SMEs, and 15.8% indirectly – meeting the aspiration it set in 2010 for 25% of procurement spend to be with SMEs by the end of this Parliament.

The Government has launched a refresh of its Contracts Finder website, at www.gov.uk/contracts-finder, offering a much-improved search including by location.

The site covers current and future public sector contracts above £10,000 in central government and £25,000 in the wider public sector. It is free to use, including from smartphones and tablets.

New legislation, which comes into force today, ensures that:
::30 day payment terms will be mandated down the supply chain – to suppliers and sub-contractors;

::Public bodies will have to publish an annual late payment report to sharpen accountability;

::The bidding process will be simplified across the wider public sector with complex forms, such as Pre-Qualification Questionnaires, abolished for low value contracts;

::The procurement process for public sector contracts will be accelerated.

Minister for the Cabinet Office Francis Maude said: “Over a quarter of central government spend now goes to SMEs but we know there’s much more to do to support small businesses in the North West, and these new reforms show just how determined we are to finish the job.”

Lord Young, the Prime Minister’s enterprise adviser added: “Contracts Finder is a world first in terms of scale and ambition. It opens up government business like never before and levels the playing field for SMEs who in the past, didn’t know how to find public sector contracts, let alone bid for them.”

Piers Linney, co-CEO of Manchester-based cloud computing company Outsourcery and a member of the Government’s SME panel, welcomed the improvements.

“We know government business has been incredibly complicated and costly to bid for in the past, and that was reflected in the tiny proportion of spend going to SMEs. This new legislation and the new site create a huge opportunity for SME businesses with reduced cash flow risk. They need to educate themselves on their rights under the new legislation and really get under the skin of Contracts Finder to make sure they can seize that opportunity.”