Before entering politics, I had a front row seat in the FTSE 100 conference room. As Executive and Main Board Director of Tesco. Day relied on the work and products of small businesses in his chain of supply. He has also worked for much smaller companies such as Dobbies, Red Tractor and Crown Agents. So we are well aware of the challenges that small businesses face and the opportunities that governments have with making the right changes. And now that I’m in government, I’m in the right place to make that happen.
For example, complex procurement regulations have long plagued small businesses. The government likewise wants to make it easier for such companies to work with the public sector by eliminating unnecessary regulations.
As the Procurement Bill enters its reporting stage in the Senate this week, I intend to make substantial progress. Replace it with one simple and flexible framework for the 5 million UK SMEs that may contend. It also addresses payment delays in the supply chain.
Last year, SMEs earned a record £19.3bn in government procurement spending. It’s great that the graph is going in the right direction, but we all want to see a steeper line.
The entire raising pie is worth £300bn, so from hosting a number of roundtables and speaking with entrepreneurs and businessmen, the bill is designed to help small businesses across the country get a bigger slice. From that conversation, I think we should use this bill to strengthen three areas.
First, to frame contracting authorities to alleviate challenges for SMEs. Procurement teams need to ensure that there are no unnecessary barriers that could prevent small businesses from signing up. A realistic bidding schedule. Having a clear timeline so that small businesses can plan accordingly.
Second: accounting. Another burden for smaller suppliers is the need to provide audited accounts as a test of their financial standing. If an audited account is not available, request the contracting authority to accept alternative evidence. This will prevent some companies from being excluded from bidding.
And finally: insurance. Part of the procurement process unfairly penalizes those without the big corporate war chest. Clarifies that contracting authorities must accept evidence that the necessary insurance is in place at the time the contract is awarded, not at the time of the tender. This eliminates the needless upfront costs that small businesses currently bear.
With turnover estimated at £2.1 trillion, SMEs make up 99% of UK businesses. I am pleased to play a role in helping domestic businesses grow by making the most of my restored authority and sovereignty.
