Small firms still 'locked out' of government contracts despite Coalition pledge
A Coalition pledge to boost small
businesses by giving them government contracts was branded a flop last
night after it was revealed that 92 per cent of orders are still placed
with major corporations.
Ministers
agreed when they came to power in 2010 that they would place a quarter
of all external orders with small and medium-sized businesses.
But
the latest quarterly figures suggest that the initiative has barely got
off the ground, with many departments actually reducing their spending
with smaller firms.
'Flop': Ministers agreed in 2010 that they would place a quarter of all external orders with small and medium-sized businesses – but 92 per cent of orders are still placed with major corporations
Figures for ten departments show that
during the three-month period of July to September last year, only 7.8
per cent of government contracts were placed with small firms.
This
accounted for 277million out of orders worth 3.6billion. If the 25
per cent target had been met, small firms would have benefited from
887million in orders – an increase of 610million over three months.
The
Department for Business, Innovation and Skills, which is charged with
the growth of small businesses, placed 13 per cent ofits orders with
them, down from 16.5 per cent in the previous quarter.
Shadow Cabinet Office Minister Michael Dugher said it was clear that they were being ‘locked out’ of government contracts.
'Betrayal': Shadow Cabinet Office Minister Michael Dugher said it is clear small businesses are being locked out of government contracts
He
said: 'The Government likes to talk big on supporting small businesses,
but the truth is that it is betraying small businesses, which are the
lifeblood of the British economy.
'Because
of the Government’s failures, net lending to small businesses is
falling and the number of companies going under is rising. And now small
firms are being increasingly locked out of government contracts. If the
Government’s own business department won’t help them, who else will'
Jane Bennett, head of campaigns at the Forum of Private Business, urged ministers to accelerate efforts to hit the target.
She
said: ‘It’s good the Government wants to help small and medium-sized
enterprises in this way, but clearly these figures suggest they have a
way to go.
‘Small businesses need the work now – the Government must ensure that it farms out the work more efficiently.’
The new figures suggest wide variations in the performance of various departments.
During
the three-month period, the Department of Energy and Climate Change
placed orders worth 3.5million with small firms out of total spending
of 790million – equal to less than 0.5 per cent.
The
Cabinet Office, which is in charge of overseeing the 25 per cent
target, placed a mere 7 per cent of its orders with small firms.
The
biggest spender was the Department for Work and Pensions, which placed
877million of orders in the three-month period, of which 12.3 per cent –
108million – went to small firms.
Only
the Department for Education came close to hitting the target, after
placing 20.5 per cent of its orders with small businesses.
Cabinet
Office Minister Francis Maude yesterday insisted the overall situation
was improving but acknowledged that there was ‘more to do’. He told MPs
it was ‘simply not the case that things are getting worse’.
Mr Maude added: ‘The arrangements we inherited made it incredibly difficult for small and medium-sized enterprises to bid.
‘The
procurement processes were so bureaucratic, so clunky and so expensive,
both for the taxpayer and for bidders, that many were, in effect,
excluded. We are addressing that.’
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