Government Plans to Spend £1 in Every £3 with Small Businesses

Small and medium businesses set to receive an extra £3bn a year from central government contracts

Government Plans to Spend £1 in Every £3 with Small Businesses

Minister for the Cabinet Office, Matthew Hancock, has announced plans to increase the government’s small business annual spend from £11.4bn to £14.4bn by 2020.

According to Hancock this will mean that £1 in every £3 of all central government spend will be paid to small and medium firms (less than 250 employees) – an increase from 26% in 2013 and 30% in 2014.

The minister made the declaration at a conference in Paris on civil service reform and procurement, speaking about the strength of the UK’s small businesses.

The news follows a number of government measures to help small and medium enterprises to grow, including steps to tackle late payment problems and improve buying methods in order to enable small firms to bid for government contracts.

This included abolishing the pre-qualification questionnaires for low value public sector contracts and requiring that the public sector publishes its contracts in one place on Contracts Finder.

Earlier this year Hancock also announced improvements to the Prompt Payment Code to make 30 day payment terms standard policy and in July small business minister Anna Soubry introduced plans to create a Small Business Conciliation Service.

Hancock said: “This is such an amazing opportunity for the country’s diverse and innovative small businesses.

“From computers to uniforms – there’s so many opportunities for small businesses to work with us, and I want to see more of them providing value for money for the taxpayer and benefiting from our spending.”

John Allan, national chairman for the Federation of Small Businesses, also provided a comment:

“The government has much to gain from opening up public procurement to smaller businesses and we welcome the government’s commitment to achieve this ambitious target. To meet it, the government will need to focus on robust monitoring and challenge of poor practices wherever they are found.”


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