Help for SMEs report 'does not go far enough'

Dec 2 2008 by Karen Dent, The Journal

A REVIEW of Government procurement calling for a fairer deal for small firms bidding for public sector contracts has received a cautious welcome from the Federation of Small Businesses.

The Glover Review, Accelerating the SME Economic Engine, called for improved access to Government contracts for small businesses, better channels of communication and a simplified process for winning public tenders.

The Government has accepted all of the recommendations contained in the report, which was commissioned by Chancellor Alistair Darling after the 2008 Budget in the spring.

There have long been calls for smaller businesses to get help to win contracts within one of the sectors which is still not shrinking instead of awarding work to big national companies.

The review was led by Anne Glover, the chief executive and co-founder of Amadeus Capital Partners, a European technology investor.

She said: “If all contracting authorities adopt these actions, then small businesses have the chance to gain a greater share of the £175bn which the public sector procures , and the public sector will also secure greater the value for money.”

Business secretary Peter Mandelson said it was essential to remove barriers to ensure more small firms could win public sector contracts.

He said: “Small businesses can offer innovative solutions and great value for money – these measures should help ensure they are better able to compete on equal terms with larger firms.” However, the FSB said the review should have gone further and included more far-reaching recommendations, such as preventing companies with a turnover of more than £500,000 from bidding on Low Value tenders.

It also wants to see more help for procurement managers to ensure they are confident when dealing with consortia of small or micro businesses.

Only around 16% of Government contracts are currently awarded to small firms and the FSB wants formal targets set so 30% go to SMEs. The group specifically called for more micro businesses to be targeted for lower value public sector contracts.

FSB regional chairman Colin Stratton said: “Small businesses offer great value to our North East community, especially in these difficult economic times, and by using small businesses, money is kept within the North East economy; a key policy of our Keep Trade Local campaign.

“However, the recommendations could have gone further and will not be effective if they are not taken up by all levels within Government.

“We want to see real solutions and the FSB will be holding the Government to account on this one.”