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Government Contracts: SMEs

Volume 567: debated on Wednesday 4 September 2013

3. What steps he is taking to ensure that more small and medium-sized companies win business from Government. (900028)

4. What steps he is taking to ensure that more small and medium-sized companies win business from Government. (900029)

6. What steps he has taken to address barriers to small and medium-sized enterprises participating in Government procurement. (900031)

12. What steps he is taking to open up central Government Departments to partnerships with small and medium-sized enterprises. (900039)

It is this Government’s policy to dismantle the barriers facing small and medium-sized companies to ensure that they can compete for contracts on a level playing field and grow. I refer the House to the letter I sent last month to all hon. Members, in which I set out some of the progress we have made and the further steps we will be taking to ensure that Departments continue to increase their spend with small companies.

I am grateful for the Minister’s answer and I welcome her reforms to Government procurement processes, which are a marked improvement on the previous Government’s efforts. However, will she share her Department’s best practice with local government, which is still issuing cumbersome and complicated tenders that are excluding so many SMEs from competing for business because of the amount of time that they have to put into them?

I welcome that support from my hon. Friend, who is extremely active on these matters in trying to secure more jobs, particularly in his constituency. He rightly says that we have a clear job, which we will do: to transfer the successful procurement reforms that we have made in central Government to the wider public sector. We are accepting the recommendations made in Lord Young’s “Growing Your Business” report, which deals with the complexity, cost and inconsistency that can face small businesses in the wider public sector.

The Minister will doubtless be aware of the success of Redfern Travel, from my constituency, which saw off French competition to win a billion-pound contract. How will the Government’s reforms help other British businesses to achieve similar David and Goliath-type victories over multinational corporations?

I also welcome my hon. Friend’s commitment in his constituency to SMEs. I note that support has come from, for example, the Federation of Small Businesses, which says that Government policy continues to move in the right direction in this area. The forthcoming consultation, to which I referred, will make that public sector procurement market more accessible to SMEs, by requiring all contracts over £10,000 to be listed in one place—on Contracts Finder, for example. I also draw his attention to an SME friendliness tool that we published in June. I urge all colleagues to use that to hold contractors in their constituencies to account.

What is the Minister doing to promote the use of the Public Services (Social Value) Act 2012 to help small businesses and social enterprises to win public sector contracts?

I am glad that the hon. Lady has raised that point and she will know that we have asked my hon. Friend the Member for Warwick and Leamington (Chris White) to act as an ambassador on this matter; it is very important. The message that we need to get through to contractors, who are of course the ones making such arrangements, is that they must have regard to the taxpayer and value for money at all times, but that other such issues might also be used to benefit those for whom they are contracting.

Is the Minister not aware that the truth is that the Government are becoming more and more dependent on big companies—private sector companies such as G4S, Serco and Capita? Is she aware that a recent Fujitsu-sponsored poll of small and medium-sized enterprises showed that 26% find it more difficult to get contracts with the Government and that 6% think that it is easier?

I welcome the hon. Gentleman’s focus on this matter. He will welcome our review on some of the companies he has named, but it is most important to say that the Government are on track to deliver our aspiration of awarding 25% of central Government business to SMEs by 2015. We look for that directly and through the supply chain, and that is what helps us to procure for growth in this country.

In a recent speech at an event called “Transforming Technology Procurement through SMEs”, the Minister for the Cabinet Office said with typical understatement that the Government were

“entering a new world for government technology procurement”

and launching

“radical reforms to increase opportunities for SME suppliers”.

Why, then, according to freedom of information requests submitted by ComputerWeekly, has only 0.52% of all the IT procurement spend for the Government’s beleaguered universal credit programme gone to SMEs?

It continues to be pretty rich for the hon. Gentleman to come to this Dispatch Box when he and his Government did absolutely nothing to count the spend with SMEs when they were in government.