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Government Contracts

Volume 546: debated on Wednesday 13 June 2012

4. What steps he is taking to encourage small and medium-sized enterprises to bid for Government contracts. (110353)

It is our aim and aspiration that by the end of this Parliament 25% of central Government spend with outside providers should be with small and medium-sized enterprises. We have launched a series of radical measures to simplify the procurement process in order to make it easier and cheaper for all companies to see the business available with the Government and to bid and compete effectively. Our direct spend with SMEs since the Labour party left office is already on track to double.

How can SMEs in my constituency find out more about how to do more business with the Government?[Official Report, 18 June 2012, Vol. 546, c. 3-4MC.]

By looking at the Contracts Finder website, which is the main source of Government contracts over £100,000. That is the place where they should look, and I hope that they will, but since February 2011, when we announced our new approach, about a third of new contracts have already been awarded to SMEs.

Will the Minister advise the House on what help or education have been given to small and medium-sized businesses regarding online e-procurement? Many small businesses in my constituency find it quite challenging to go online.

I will look into that, but the hon. Gentleman might like to bring some of those suppliers to me to talk through the difficulties, because we want to make the process as easy as possible. Suppliers tell me that bidding for public sector contracts costs them typically four times as much as bidding for private sector contracts. The changes that we are making will radically reduce that, but we want to make sure that the process works, so I should be grateful for his help.

According to the Federation of Small Businesses, 40% of businesses still say that the tendering process is too complex. There are some very good messages in the procurement pledge on the website that the Minister mentioned. What steps is he taking to encourage people to adopt the principles of the pledge?

That is policy within central Government, and it should happen, although I am not for a moment claiming that it is universal yet. We want to hear about procurements that are not being done in the right way. In the wider public sector, we can do no more than exhort and encourage, and we will do so. However, it remains the case that if we are alerted to procurements being done in the old-fashioned way, which is very antagonistic to small businesses, we will intervene. We have got a number of those changed for the better.

The latest official figures continue to show that the proportion of procurement spend going to SMEs is decreasing in the majority of Government Departments. A recent survey by the FSB found that 40% of SMEs believe that the tendering process is too complicated, while 37% believe that they are being “sidelined” by the Government. Does the Minister agree with Mark Thompson, an adviser to his own Department, who said:

“The reality is, government has very little idea of how to deal with SMEs and has very little in the way in terms of concrete plans here”?

The main change is that for the first time there are official figures for this spend—the previous Government did not even bother to count it—and the numbers are going up. Obviously within each Department there will not necessarily be an even progress all the time—I would have thought that even the hon. Gentleman ought to be able to understand that—but across the whole of Government spend with SMEs has doubled. I would hope that he would enthusiastically welcome that.