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SMEs urged to 'get stuck in' on central Government contracts

The UK’s small and medium-sized enterprises (SMEs) have been targeted by Government who seek to offer more central contracts to talented small firms.

That’s according to minister for the Cabinet Office, Matthew Hancock, who revealed a goal to ensure that £1 in every £3 the Government spends is with SMEs by 2020.

In 2013-14 the central Government spent £11.4bn with SMEs employing 250 staff or less – equivalent to around a quarter (26 per cent) of central Government outlay.

In the next five years the Government wants to increase this to 33 per cent; which would result in an additional £3bn a year going directly to the SME sector and down the supply chain.

Mr Hancock believes the initiative marks an “amazing opportunity for the country’s diverse and innovative small businesses” and urges the SME community to “get stuck in”.

“From computers to uniforms – there are so many opportunities for small businesses to work with us, and I want to see more of them providing value for money for the taxpayer and benefitting from our spending,” added Hancock.

John Manzoni, chief executive, Civil Service, added: “Further opening up our marketplace to small businesses is good economic sense all round – making it easier for them to access and win Government business opportunities, whilst encouraging increased competition and market innovation to deliver best value for the taxpayer.”

Earlier this year, the Government announced improvements in the way it purchased goods and services to entice more small firms to be a part of the public sector contract bidding process, including:

  • 30-day maximum payment terms for the entire public sector supply chain

  • Abolishment of pre-qualification questionnaires (PQQs) for low-value contracts

  • Ensuring all public sector contracts are published in one place

John Allan, national chairman, the Federation of Small Businesses (FSB), said: “The Government has much to gain from opening up public procurement to smaller businesses and we welcome [its] commitment to achieve this ambitious target.

“To meet it, the Government will need to focus on robust monitoring and challenge of poor practices wherever they are found.

“The FSB will play its part, and will work with ministers on this important goal.”

Image: Derek Key

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