December 5 2013 Latest news:
Ben Woods, Business writer
Thursday, September 19, 2013
More small firms will be able to bid for contracts spanning hospitals to police forces under plans to share the public sector’s £230bn annual spending power.
The government has started a consultation on making public sector procurement more accessible to small and medium-sized enterprises (SMEs).
It hopes opening up the state’s buying power will provide crucial trade to the UK’s army of small firms and fuel Britain’s fledgling economic recovery.
The Cabinet Office said SMEs have traditionally been locked out of government business because of time-consuming, expensive and bureaucratic systems.
It said the plans will simplify and standardise how public sector contracts – ranging from central and local government to emergency services – are advertised, bid for and paid for.
It aims to ban pre-qualification requirements for low-value contracts and introduce one standardised requirement for big contracts.
All jobs worth more than £10,000 must also be accessible on the same website, according to the proposals.
And to reduce payment delays, suppliers near the bottom of the chain must benefit from the same payment terms as bigger contractors, the government said.
Cabinet Office minster and MP for Norwich North Chloe Smith said: “With £230bn per year spent on goods and services right across the whole public sector, government wants to seize the opportunity to help hard-working SMEs get on by competing for and winning this business.”
Chris Soule, FSB East Anglia Policy Chairman, said “The FSB has spoken with the Minister regarding procurement, and was pleased with the launch of the consultation today.
“The FSB has carried out research which shows that 58 per cent more of the money spent by local authorities with small firms is re-spent in the local economy compared to that spent with large businesses in the same area.
“The FSB wants to see more local authorities using businesses in their areas to help boost economic growth. Small firms have the power and strength to create jobs and growth in the economy if they are given the help to do so – spending locally invests in growth for the area.
“Engagement with small firms is essential. While FSB members do win contracts locally many are still deterred by the process, which is why the FSB is calling on local authorities to work with local small businesses to create an environment in which small firms can grow and prosper.”
Two hundred jobs are set to be created after one of west Norfolk’s largest businesses was granted permission to expand its King’s Lynn facilities.