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Government to widen SME access to public sector contracts

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The government today announced plans to widen SME access to public contracts, raising the prospect that smaller businesses may finally gain an opportunity to really compete with their corporate rivals.

The plans would introduce a requirement for all contracts worth more than £10,000 to be listed on the same site, and for the banning of long and burdensome pre-contract questionnaires.

There are also plans to ensure suppliers further down the supply chain from prime contractors are guaranteed prompt payment terms.

Cabinet office minister Chloë Smith said: “Ambitious small and medium sized UK businesses are increasingly showing how they can contribute to our economic recovery by delivering innovation and excellent value for money, but historically have been shut out of government business.

“In the past bidding for public sector contracts was time-consuming, expensive and overly bureaucratic.

“Removing barriers and setting out a consistent, single set of friendly principles for the whole public sector will provide the right support to encourage significant business and growth opportunities for, and help give the UK a better starting position in the global race.”

SME access to government contracts has continued to be a controversial issue, as small firms have often been overlooked in favour of the easy option in the past past. The government has made some progress in this area as an increasing proportion of central government funds are spent with SMEs.

Jim Bligh, CBI Head of Public Services Reform, said: “There is huge potential for smaller firms to supply the public sector with goods and services but too often the bureaucracy barrier is too high.

“Opening up public services markets to lots more companies will boost competition and means the Government and the taxpayer will pay less.

These new proposals come in response to the recommendations of Lord Young, the Prime Minister’s enterprise adviser, who said that a “single market” for public sector procurement be created to widen access for SMEs.

Lord Young said: “I am pleased with the government’s response to my proposals, reflecting not only the huge growth opportunities that public procurement can offer small businesses but also the significant value these suppliers are delivering to all parts of the public sector. I want this to increase to reflect the growing number and importance of small businesses in the UK today.

“For this to happen we need to improve small businesses’ access to the public procurement market by removing the bureaucratic processes and poor payment practices which stop and discourage from making winning bids for contracts.”

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