Selling to government: Stephen Allott's Whitehall battle
7 min read
30 September 2011
How can SMEs win more public sector contracts? Stephen Allott, the crown representative for SMEs, gives us the inside story.
Stephen Allott is crown representative for SMEs. He’s the voice of small business at the top of government. His goal? To help SMEs win more public-sector contracts. We caught up with him to get the inside information.
What does your role involve? How do you represent SMEs?
When David Cameron appointed me, he called me the “strong voice at the top table” for SMEs. I’m meeting with senior officials and ministers all the time, making sure that the country’s small businesses are front of mind. It means that, instead of officials having to think of an idea, embellish it for three months, then go out and test it, they can ask me about the SME angle. They’ve got advice on tap, and this massively speeds up the innovation loop.
What is the main problem for SMEs trying to get public-sector contracts?
Pre-qualification questionnaires (PQQs) are, without a doubt, the main issue SMEs complain about. PQQs set very high thresholds – unnecessarily high, in fact – to filter down the number of people who can bid for public-sector work. It meant some SMEs were being automatically excluded before they even got off the starting blocks. But earlier this year, the government took a bold and brave move by just abolishing them. For contracts worth less than £100,000, there will be no more PQQs.
Many SMEs don’t bother competing for government contracts, as they think they’d never win anyway. What’s your view?
You’re dead on. I’m happy to admit that, when I was running small companies, that was my view as well – I always kept my firms away from public tenders. But things are changing: the government wants to get more competition in its supplier marketplace and it wants to encourage innovation. This is also about greater transparency for the taxpayer.
Doing business with the public sector was, in the past, a completely different experience to doing business with the private sector. We’re doing away with ridiculous rules and unnecessary bureaucracy [what Allott has referred to in the past as the “procurement oligopoly”]. It was bad for government as it was stifling competition.
In addition to removing PQQs, we established a new online portal in February – Contracts Finder. Previously, only contracts worth more than £100,000 were published, according to EU guidelines. But now, all of them are listed. All organisations need to do is to specify which contracts they are interested in and details will be emailed free of charge.
How quickly are things opening up for SMEs?
Things are moving pretty fast. We’re trying to simplify the process at the bottom end. Our next step is to launch the Government eMarketplace, which will allow small businesses to register as a supplier for low-value contracts with just a few clicks – there’s no formality whatsoever. You bid by category and tick what you could supply. Then, when civil servants are looking to buy whatever items you’ve ticked, you get notified.
It’s a lightweight way of doing business – and it means departments can carry out “spot buy procurement” for those goods and services that do not fit well in a catalogue, but are not complex enough to warrant the use of a specialist e-sourcing tool. The system is already being piloted by three government departments.
How happy are you with the way the government responds to your ideas?
The commitment from the government is incredible. That’s one of the things that really blew me away – how determined the senior politicians and the senior civil servants are to making change happen.
I was amazed to see Francis Maude, the minister for the Cabinet Office, go through the procurement regulations himself, line by line, to find where they’d been gold-plated compared to the European
regulations. He literally sat and did it himself with a highlighter pen.
What are the main obstacles you face in opening up the market to SMEs?
To make really big changes across the board, it’s going to be a long job. We’re talking about changing the behaviour of thousands of civil servants who are buying stuff every day. They already think they’re doing a great job – they are diligently trying to get value for money. But we need to change how they think about buying, and who they buy from.
Small business can help – for example, through our Mystery Shopper initiative. Business owners can tell us (anonymously) about tenders they don’t understand or instances of what they believe to be poor procurement practice. We’ll investigate all the submissions and we’ll publish the results of the investigations. We’re keen to get feedback: good and bad.
While the Cabinet Office doesn’t have hierarchical power over other departments, it has a lot of influence and we can make a difference. This isn’t just lip service.
What’s the best way for an entrepreneur to win government business?
If you’ve got something that you think the country could use and you’re not supplying it yet, we want you to try and sell it to government.
The obvious places to start are Contracts Finder or the procurement roadmaps (links below). Have a go. If you hit process problems, use the supplier feedback service to highlight them and we’ll fix it.
The government really wants to do something about this – for obvious reasons. They want to save money where small businesses are better value, and they want to tap into the innovative and creative solutions that British SMEs have to offer. If those two things are happening, economic growth will follow.