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Government Procurement: Small Businesses

Volume 643: debated on Wednesday 27 June 2018

10. What steps his Department is taking to encourage the use of small businesses in Government procurement. (906094)

11. What steps his Department is taking to encourage the use of small businesses in Government procurement. (906095)

Small businesses are the backbone of our economy, and we are determined to continue to level the playing field so that they can compete for Government contracts. That is why in April I announced a number of measures to help achieve that and have recently met the Government’s strategic suppliers and Ministers in several Departments to ensure that those measures are delivered.

I thank the Minister for that reply. Specifically, how will coastal towns such as Southend-on-Sea benefit from the changes in this procurement procedure?

As my hon. Friend will know, small businesses generate more than 16 million jobs and we are determined to level the playing field so that those in coastal towns such as Southend get their fair share of prosperity and win Government contracts. I encourage businesses in Southend to look on Contracts Finder, on which more than 17,000 small businesses are already registered, for procurement opportunities.

Does my hon. Friend agree that it is vital that we have a vibrant and mixed group of suppliers and small businesses from all corners of the UK, including Wales, Scotland and Northern Ireland, and that they should all be considered equally in the procurement process?

My hon. Friend is absolutely correct. It is crucial to ensure that we have a diverse supplier base. We have made a number of changes to the Government procurement processes to assist small businesses, including requiring prime contractors to advertise subcontracting opportunities on the Government Contracts Finder. We also divide contracts into separate lots, including by region, when that makes commercial sense.

I thank the Minister for his responses. As seen from my recent work on the Public Accounts Committee, there sometimes appears to be a conflict between large strategic suppliers who see themselves as aggregators of several procurement contracts for small business and other instances in which small businesses would like to get certain contracts directly from Government. Will he explain the Government’s thinking on how to balance those two approaches?

We already require buying authorities to disaggregate contracts so that small and medium-sized enterprises can compete. However, there will, of course, be contracts in which disaggregation would affect value for money. That is why we recently announced that when large contractors are successful, they will be required to advertise those subcontracting opportunities on Contracts Finder, so that small businesses can bid.

What assessment has the Minister made of the cost implications where outsourced contracts have been overturned by the High Court because of incompetent procurement processes? I refer specifically to the expensive mess created by Conservative-controlled Lancashire County Council in connection with a Virgin contract for children’s services.

As the hon. Lady will know, the Cabinet Office has extensive processes to ensure successful procuring. If she is questioning the overall purpose of procuring, I refer her to the comments made earlier by my right hon. Friend the Minister for the Cabinet Office. In addition, research shows that public authorities save at least 11% by contracting out services. That means more money for health and education.

The Minister referred to small businesses as the backbone of our economy. What plans does he have over this Parliament to strengthen that backbone and increase targets in terms of accessibility of procurement for small businesses?

The hon. Gentleman raises an important point. In the previous Parliament, we set and met a target of 25% of all Government procurement going to small businesses. We set a challenging target in this Parliament of a third of all procurement going to small businesses. I am taking a number of steps to help us to try to achieve that.

6. Thirty thousand Carillion suppliers are owed £2 billion in unpaid invoices. When will Ministers enforce the prompt payment rules for Government contracts and stand up for small businesses, or is the reality that under this Prime Minister the Conservatives really are the anti-business party? (906090)

We are absolutely committed to prompt payment. That is why the Government pay over 96% of their suppliers within 30 days. In respect of application to contracting, I have just announced a consultation to ensure we can exclude contractors if they fail to pay small businesses on time.