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Public Procurement

Volume 540: debated on Wednesday 8 February 2012

8. What assessment he has made of the effects of changes to public procurement on the ability of small and medium-sized enterprises to secure contracts. (94028)

9. What recent assessment he has made of the effectiveness of new suppliers to Government working groups in making it easier for small and medium-sized enterprises to bid for Government contracts. (94029)

We want 25% of the value of Government contracts to be awarded to small and medium-sized enterprises, and we have made significant progress towards that. This has so far led to a more than doubling in the amount of direct spend awarded to SMEs in the first half of the current year.

The Minister will be aware that his own commercial representatives of SMEs have said that it will take up to two years before SMEs stop being excluded from Government contracts. Does he agree that that is utterly unacceptable? What is he going to do to make better use of EU exemptions that protect local economies?

I fully accept that it will take a little time to get things fully sorted out following the mess left after 13 years of the hon. Lady’s Government, so rather than chiding us for the progress that we are making why does she not congratulate us on our progress and start apologising for the mess her Government left behind?

Further to the Minister’s answer, the leader of one of the Government’s own working groups, Mark Taylor, who is the chief executive officer of Sirius, has said:

“There are SMEs being taken out of procurement, not put into it.”

He said that that is “simply not acceptable.” Are not Government policies, as Mr Taylor points out, making it more difficult for SMEs to take part in Government procurement projects, rather than easier?

No, that is the reverse of the truth. The arrangements we inherited made it incredibly difficult for SMEs to bid, because the procurement processes were so bureaucratic, so clunky and so expensive, both for the taxpayer and for bidders, that many SMEs and voluntary and community sector organisations were, in effect, excluded. We are addressing that. There is more to do, but I would be grateful for some support from the hon. Lady’s side, particularly in encouraging Labour-led local authorities.

My constituent, Mr Isham, who runs a business in Willington, is also finding it difficult to break through the barriers to obtaining Government contracts. May I encourage the Minister to come to South Derbyshire for a question and answer session with local business people, so that they can learn at first hand from the master how to apply?

I would obviously be delighted to meet my hon. Friend’s constituents, but I would urge them to look at the Contracts Finder website, where, for the first time, Government and public sector contracts are available for scrutiny. If they find that procurement is still being done in the old-fashioned, outmoded way that we inherited from the Labour Government, they should phone our helpline and we will get on the case, as we have done in many cases already, and put improvements in place.

Manufacturing companies in my constituency are slowly dragging this country out of the mire in which it was left by the previous Government. Will the Minister please advise my manufacturing companies how, other than by looking at the website, they can find out about getting on the list to provide the national Government with products?

We inherited some very rigid arrangements that militated against UK-based suppliers and at the same time provided very bad value for taxpayers. We are making reforms that make it easier for local businesses, particularly manufacturing businesses, to compete effectively, but I will happily consider the issue raised by my hon. Friend.

The Government promised that 25% of Government contracts would be awarded to small and medium-sized enterprises, yet figures on the Minister’s departmental website show that the percentage of procurement spend with SMEs at the Cabinet Office has fallen from just under 11% to 7%, a decline replicated across Whitehall. At a time when net lending to SMEs is falling and the number of companies going under is increasing, why are things getting worse, not better, for small businesses on his watch?

It is simply not the case that things are getting worse. The value of contracts being given to SMEs is rising and rising markedly from the very low base that we inherited. The other issue that we have had to deal with is the fact that the quality of information left by the previous Government was deplorable.