HOUSE OF COMMONS, LONDON SW1A 0AA
16 April 2018
HELPING SMALL BUSINESSES WIN GOVERNMENT CONTRACTS
I am sure that, like me, you regularly talk and meet small businesses in your constituency. We know that they are the engine of our local economies and the backbone of the national economy, generating around 16 million jobs. Supporting them is an important part of our work as local MPs and as a Government.
Small businesses also play a crucial role in helping to deliver efficient and effective public services. We have already taken significant steps to help small businesses. We exceeded our previous target of 25 per cent of central government spend to be with small businesses, and are pushing for this to reach 33 per cent by the end of this Parliament.
New SME policy measures
However, we also recognise that the public sector needs to do more to support small businesses and ensure they have a fair chance to bid for and win contracts with central government. This sits alongside the work of the Department for Business, Energy and Industrial Strategy (BEIS), and in particular Andrew Griffiths, Minister for Small Business.
That is why over Easter, I launched a public consultation on new measures to help level the playing field for small businesses, including:
- excluding suppliers from major government procurements if they cannot demonstrate good payment practice with their subcontractors; and
- giving SME subcontractors on government contracts a ‘right of access’ to a department if the supplier is not paying in line with 30 day terms.
In addition, I announced two further measures which will help level the playing field for SMEs:
- a requirement for suppliers on new large Government contracts to advertise subcontracting opportunities on the Contracts Finder website; and
- a requirement for prime suppliers on new large Government contracts to report their direct spend with SMEs in their supply chains.
The Prime Minister has also written to departments asking them to nominate representatives to champion SMEs in their department’s procurement teams. I have written to the government’s major suppliers outlining our expectations around prompt payment down the supply chain. They have also been asked to nominate a senior representative to act as an SME Champion in their organisations.
I am sure that you regularly receive correspondence from small businesses asking how they can access public sector contracts. Therefore, I also wanted to give you the practical information that you can use to support small businesses in your constituencies. This includes how they can find new procurement opportunities, their rights in terms of fair payment and who they can turn to if they experience bureaucratic procurement issues.
The Contracts Finder website is a one stop shop for businesses to search for suitable procurement opportunities. Where public contracts are advertised and awarded over certain low thresholds (£10,000 in Central Government and £25,000 in the wider public sector) these notices must be advertised on Contracts Finder. The service currently has 1,160 live procurement opportunities and over 25,000 supplier organisations, of which 63 per cent are smaller businesses. I would encourage you to make local small businesses aware of this excellent facility, which is accessible at: https://www.gov.uk/contracts-finder.
The Government’s Small Business Crown Representative, Emma Jones, has produced a [enclosed] guide on top tips for selling to government. This is a useful source of information and can be shared with constituents who are interested in bidding for government contracts. In addition, Emma also hosts free webinars and events across the country for SMEs who want to become a Government supplier. This is part of a suite of support available to smaller businesses at www.gov.uk/openforbusiness.
Our constituents should expect that if they are working for a public sector body or in its supply chain they will be paid promptly. The Public Contract Regulations 2015 require all new public sector contracts to have 30 day payment terms, and for these terms to be passed down the supply chain to subcontractors.
If your constituent experiences poor public sector procurement practice, such as a bureaucratic selection process, unnecessary financial requirements or poor payment in the supply chain, they can report the case to the Crown Commercial Service who will investigate. The service can be found on Gov.uk or by emailing MysteryShopper@crowncommercial.gov.uk.
The Government has also established a Small Business Panel comprising 25 smaller businesses who can provide feedback on the impact of the new policy measures and raise their concerns with me directly.
I hope the action we have taken and the enclosed information enables you to answer your constituents’ questions and goes some way towards giving them the confidence that they can bid for and win public sector contracts. Please feel free to share this letter with them.
OLIVER DOWDEN CBE MP
Minister for Implementation