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SME doubts over public-sector contracts

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The survey by online business marketplace PeoplePerHour.com found that while just over half of the 1,000 SMEs questioned intended to bid for public-sector contracts, most were pessimistic about their chances of winning work.

Nearly half are worried the bigger players in their sector will win the lion’s share of the work, leaving them to fight over the remaining smaller, less lucrative contracts.

A lack of experience in tendering emerges as another important stumbling block, with three quarters of small firms having never won a public sector contract. This lack of success is a particular point of concern, with two thirds of SMEs convinced their inexperience will count against them.

And, if they do beat the odds and are successful, small businesses are worried about another factor of public sector work – red tape. The survey found nearly three quarters of respondents are concerned about the level of bureaucracy they would have to deal with.

“Over the next 12 months, we’ll see a revolution in the way government goes about its business. But as we make the move from Whitehall to high street, the government has to make sure there’s a level playing field for small businesses,” comments PeoplePerHour.com founder Xenios Thrasyvoulou.

“The private sector wants to get involved but three key stumbling blocks remain. Firstly, the most attractive work will be simply swallowed up by bigger corporations. Secondly, there’s a ‘glass ceiling’ that will exclude companies without public-sector experience from getting work. And finally – the bug bear of all SMEs – red tape. The government must make sure all aspects of dealing with the public sector are as user-friendly as possible. Ensuring the tendering process is uncomplicated and transparent would be a good starting point.”

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