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A new white paper has argued that locking small and medium sized businesses out of public sector contracts is not only detrimental to business but also to the progress of digitisation.
Taking the brakes off: How SMEs can be unleashed to drive the rapid digitisation of the public sector, published by Brightman, examines the challenges faced by SMEs when attempting to work with the public sector and provides an analysis of the government’s approach to IT procurement, focusing on ten recommendations to improve the fairness of procurement for businesses of all sizes to deliver better digital public services.
The government has committed to spending 33 per cent of public sector procurement directly with SMEs by 2022, with recent projections finding that SMEs are involved in 19 per cent of procurement, meaning that the government’s target, while achievable, still needs a change of attitude in the way business is conducted if it is to be met.
The advice from Brightman within the white paper includes: an overhaul of the various framework agreements to make them more user-friendly and better at fulfilling their matchmaking role; the introduction of fairer terms of business for businesses of all sizes in order to prevent larger suppliers from using their size to negotiate much better payment terms than their SME competitors; and a commitment of more government resources to manage a rising number of SME suppliers.
The paper has been endorsed by Emma Jones, founder of Enterprise Nation and a prominent campaigning voice for small businesses since being appointed as SME Crown Representative in July 2016 to help the government break down the barriers for SMEs.
Romy Hughes, director at Brightman, said: “Despite the launch of numerous government policies and initiatives – and the introduction of the government’s own targets to direct more public sector expenditure directly to SMEs – most small and medium sized businesses remain locked out of public sector contracts altogether. This is not just detrimental to SMEs that feel they are unfairly discriminated against, but it is holding back the digitisation of the public sector. SMEs can offer greater innovation, value-for-money and flexibility than much larger providers. It is time the government matched its ambitions with policies that genuinely help SMEs to compete for government contracts.”
Emma Jones said: “It is great to see Brightman shedding light on the challenges faced by SMEs when seeking to work with the government, and I welcome the many recommendations they have put forward.”
“I am often asked by entrepreneurs what is being done in government to focus minds on the target of spending £1 in every £3 with SMEs by 2022. Since I assumed my role as SME Crown Rep, we have seen some very positive changes. The appointment of an SME Champion to every government department to oversee progress towards the spend target, along with every central government department appointing its own SME Minister are two great examples which will ensure SMEs being much better represented in Whitehall.
We are moving in the right direction, and I welcome Brightman’s input into this complex issue. The more that SMEs like Brightman take the time to contribute constructive ideas to solving this challenge, the faster we can work together to reach that 33 per cent spend aspiration.”