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Government Procurement: Small Businesses

Volume 641: debated on Wednesday 16 May 2018

1. What steps his Department is taking to support the use of small businesses in Government procurement. (905315)

3. What steps his Department is taking to enable a wider range of businesses to bid for and secure public sector contracts. (905317)

11. What steps his Department is taking to support the use of small businesses in Government procurement. (905327)

Small businesses are the engine of our economy, and we are determined to level the playing field so that they can win their fair share of Government contracts. That is why, last month, I announced a range of new measures, including consulting on excluding bids for major contracts from suppliers who fail to pay their subcontractors on time and giving subcontractors greater access to buying authorities to report poor payment performance.

I thank the Minister for his answer, but I recently met small businesses at the Rugby branch of Coventry and Warwickshire chamber of commerce, many of whom told me that they were put off from tendering for public sector contracts by the complexity of the process. I know that Ministers have worked hard to break down barriers, so what steps is he taking to get the message across that there are real opportunities for business among small companies?

My hon. Friend raises a very important point. As he says, we have already removed complex pre-qualification questionnaires from low-value contracts, but this afternoon I will again be meeting the small business panel, which represents small businesses up and down the country, and we will be discussing exactly how we can further simplify pre-qualification questionnaires and associated bureaucracy.

The UK’s fantastic small and medium-sized enterprises drive innovation and help to deliver our public services. What barriers has the Minister identified that he will tackle to ensure that we can see more small businesses from around the country tender for Government contracts?

I thank my right hon. Friend for her question. She is absolutely right: I am committed to breaking down barriers for SMEs supplying the public sector. That is why, over Easter, I announced that we required significant contractors to advertise their contracting opportunities for SMEs on Contracts Finder. In addition, my right hon. Friend the Prime Minister has appointed an SME champion in each Department, and I have personally written to strategic suppliers to remind them of their obligation to pay subcontractors on time.

A report that I published in conjunction with the TaxPayers Alliance earlier this year found that some public sector organisations are spending up to seven times more for a ream of photocopier paper than others. What steps is my hon. Friend taking to ensure that the public sector spends taxpayers’ money more wisely in everything that they incur and spend, and will he undertake to read my report?

I will, of course, undertake to read my hon. Friend’s report and will respond directly. It is precisely for this reason of getting good value for the taxpayer that we established the Crown Commercial Service to increase savings for the taxpayer by centralising buying requirements for common goods and services such as photocopier paper.

FCC Environment has public sector contracts across 160 constituencies, yet it refuses to pay its workers sick pay. The workers in Hull have been out on strike for more than 30 days after one of their colleagues developed cancer and had to return to work after a month because he could not afford to be off work. Will the Minister please look at reforming the rules for procurement so that no companies can exploit workers in this way and not pay them the basic right of sick pay?

Clearly, all suppliers are subject to the general law of the land, which covers many of those points. In addition, we have introduced a supplier code of conduct, which looks exactly at those corporate responsibility points, and we review it continuously, and we will review it with such cases in mind.

Today’s Carillion report clearly demonstrates the urgent need to deal with the late payment culture in the construction industry, which is hitting many subcontractors. Most important and pressing for me today, four months after the Carillion collapse, is the ongoing shutdown of the Midland Metropolitan Hospital. I have raised the matter with the Cabinet Office several times, with Health Ministers, and even twice here in the Chamber with the Prime Minister, so when will the Government stop dithering and start work again on this much-needed hospital?

I know that the right hon. Gentleman is very passionate about this issue. I can reassure him, rightly again, that we remain absolutely committed to getting the new hospital built as quickly as possible, and we are supporting the trust to achieve that while ensuring that taxpayers’ money is spent appropriately.

Although we warmly welcome moves to open up Government contracts to SMEs, the fact is that they are still being crowded out by big suppliers that regularly fail to deliver, including G4S with its youth custody provision; Capita with its failing Army recruitment contract, among many others; and, of course, Carillion. Will the Government introduce a new requirement that firms cannot bid for new Government contracts while they are still failing to meet quality standards on their existing public sector jobs?

Individual contracting Departments clearly keep the performance of all contractors under review. The hon. Gentleman says that we should ensure that small businesses can bid for Government contracts. I announced a range of measures over Easter precisely to deal with that issue. Indeed, we have introduced a requirement for all subcontracting opportunities by principal contractors to be advertised on the Contracts Finder website, which gives SMEs a great chance to bid for work.