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Central government spent £11.4 billion with small and medium-sized enterprises (SMEs) in 2013 to 2014. The Minister for the Cabinet Office Francis Maude has announced new figures showing that a record 26.1 per cent of Government spend went to SMEs.
The new data shows that central government spent 10.3 per cent directly with SMEs, and 15.8 per cent indirectly. The intention set in 2010, that a quarter of government procurement spend would be with SMEs by the end of this Parliament.
Mr Maude said that the Government has launched a refreshed Contracts Finder website with an improved search function, including the facility to search by location. Contracts Finder covers current and future public sector contracts above £10,000 in central Government and above £25,000 in the wider public sector.
He also announced new legislation which comes into force in February 2015 and means that:
- everyone in the supply chain must comply with 30 day payment terms, including suppliers and sub-contractors;
- public bodies must publish an annual late payment report, making their accountability more transparent
- the bidding process is simpler across the wider public sector – complex forms, such as Pre-Qualification Questionnaires, are now abolished for low value contracts
- the procurement process for public sector contracts will be quicker.
Mr Maude (left) said: "As part of our long-term economic plan this Government is overhauling public procurement to open things up to businesses of all sizes. I am so pleased that our reforms have ensured that innovative SMEs benefited from £11.4 billion of business last year alone. Over a quarter of our spend now goes to SMEs but we know there’s much more to do, and these new reforms show just how determined we are to finish the job."
The regulations implement new EU rules for public sector contracts which will speed up the procurement process. The UK is the first EU member state to implement these rules, doing so in just 10 months, 14 months earlier than the EU deadline.
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Freelancer and self-employed group, IPSE, welcomed the plans to simplify the procurement process to tackle the 'endemic' problem of late pay.
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"Late payment is a major issue for microbusiness owners up and down the country who rely on regular income to keep their business afloat but chasing payment puts future contracts in jeopardy.
"Although policies to tackle late pay should be welcomed, the problem won't disappear until tough action is taken to change the whole culture of pay by big business. In our recent manifesto, we called for a small business conciliation service which would allow self-employed professionals to receive payment without the need for lengthy court action. This would go a long way to stop the endemic problem of late pay and we're delighted the Conservative Party has committed to implementing this. We hope all political parties will commit to cutting red tape in the procurement process and tackling late payment ahead of May's General Election."
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Susie Hughes © Shout99 2015
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