Business group welcomes move to make public contracts more accessible to small firms

1 November 2010

Email article : Print article : More articles like this

The Forum of Private Business is welcoming moves to make public contracts worth £236 billion more accessible to small firms and link procurement to prompt payment.

The Government announced the procurement proposals at today's small business summit at the Department for Business, Innovation and Skills (BIS) in Victoria Street, London, as part of a strategy designed to achieve a private-sector-led economic recovery.

In addition to plans to improve access to finance and allow social tenants to start businesses from home, the strategy aims ensure the public sector meets its target of awarding 25% of all contracts to small and medium-sized enterprises (SMEs).

There will be a single, standardised Pre-Qualification Questionnaire (PQQ) across all departments, which will be required to publish not only their procurement contracts but also how many of them are awarded to SMEs.

The Government is investigating utilising more ‘open frameworks' or ‘dynamic purchasing systems' to tackle what is often still a closed procurement system awarding contracts to ‘preferred bidders' – typically large companies – effectively excluding many small firms for long periods of time.

Further, it is committing to pay the majority of primary public sector contractors in five days and will ensure firms further along the supply chain are paid within 30 days.

Speaking after the meeting, which was also attended by ministers including the Business Secretary Vince Cable and Small Business Minister Mark Prisk, the Forum's Chief Executive, Phil Orford, welcomed the strategy.

"Following the spending cuts, it is important the Government addresses the key areas of public procurement and payment in order to achieve a real private-sector-led recovery with small businesses at its heart - which means business growth and job creation," said Mr Orford. "Providing sound policies on procurement, finance and enterprise follow - and more importantly are followed through - this will prove to be a welcome plan that, along with more work on tax and red tape, should help firms to flourish."

He added: "Freeing up supply chain finance will be even more crucial as the economy continues to recover. It is right that the public sector sets the standard for private companies to follow, and strengthening initiatives like the Prompt Payment Code, which is one option the Government has discussed, will certainly help to achieve this."

Following his review of health and safety legislation, which the Forum's research has shown costs small businesses £2.1 billion each year, the former Trade and Industry Secretary Lord Young will carry out a report on how the Government can be more ‘small business and start-up friendly'.
The report is in addition to the ongoing review of employment law, which aims to ‘maximise flexibility for employers and employees within a competitive environment for business'. The Forum's research found that complying with employment law costs small firms £2.4 billion per year.

Procurement problems

Forum member ABA Consulting Ltd has offices in Derby and Newcastle-Under-Lyme. Its Managing Director, Alan Brough, has been frustrated in the past when applying for public building contracts. He is sceptical that the bid fixing scandal will change anything in the construction industry.

"We've recently applied for a contract relating to Stoke-on-Trent's regeneration, which is being managed by a publicly-funded body appointed by the Government. We were chosen to be on the panel of shortlisted firms, but haven't had any work out of it at all, and then you hear that they're working with companies from London and elsewhere."

He added: "There are all of these processes to go through, and I despair at it. I'm sure that the clients do as well, but these are the procedures they have to go through."

Email:
eNewsletter archive

Business group welcomes move to make public contracts more accessible to small firms

Related articles