Small Companies Locked Out of Public Sector Contracts

A new report from the Federation of Small Businesses (FSB) has revealed that small businesses still face many obstacles when attempting to secure public sector contracts.

As a result, says the FSB, the Government’s new targets for SME public procurement are unlikely to be met. It is therefore calling on Government and the public sector to step up efforts to remove blockages which are unfairly preventing smaller firms from supplying to the public sector.

Proposals include forcing local authorities to publish all contracts over £10,000 on Contract Finder, as central Government does. This would put a stop to the practice of local authorities avoiding putting smaller contracts on the digital platform, and so only publishing higher value thresholds which are outside the reach of smaller businesses.

“Opening up the public service market is a win-win for everyone involved in the supply chain because when small businesses are used effectively, they are able to create jobs and growth,” said FSB National Chairman Mike Cherry. “They are overwhelmingly the route that people take to get out of unemployment while also creating greater competition leading to better value for money for Government.”

“By supporting local small businesses, we are helping to pay the wages of local people who then go and spend money in local businesses which helps the whole local economy,” he added. “FSB research backs this showing that every £1 spent with a small or medium-size business, 63% is re-spent in the local area. It is crucial that these local firms are given a fair chance to compete.”

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