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Government 'backtracks' on SME promise

SMEs feel 'beaten and bullied' by public sector

The government appears to be going back on its promise to buy more services, including IT, from SMEs, according to the New Suppliers to Government working group.

After an initial meeting with the Cabinet Office, the working group, tasked with encouraging more SMEs to do business with the public sector, said that the government had become less forceful in its commitment.

At the end of last year, the government told its key suppliers that government contracts would be opened up to smaller suppliers, in an effort to end the era of "mega IT contracts".

It was followed by Cabinet Office minister Francis Maude's SME strategic supplier summit in February, which outlined the reforms that the government intended to make. This included a requirement for all government departments to publish a set of specific, targeted actions to achieve 25 percent of their business with SMEs.

The New Suppliers to Government working group, led by open source software specialist Sirius's CEO Mark Taylor, was one of three groups that were set up to help the government realise its ambitions.

"The Cabinet Office's position is that they are working hard on the minister's programme, but that it will take time because it's a business development decision. That's not really good enough," said Taylor.

"SMEs don't take this very well because that [business development] is what we do."

To compound the issue, the day before the working group's meeting with the Cabinet Office, Stephen Allott, the Cabinet Office's Crown Commercial Representative for SMEs since February, said that it will take two years before the government stops excluding SMEs from procurement.

"Phase one is not excluding people by accident when the government is buying something that they could buy [from SMEs]," he told the Telegraph. "We are still in years rather than months".

Taylor said: "This is simply not acceptable. All of the evidence is that it's going backwards. There are SMEs being taken out of procurement, not put into it."

Taylor believes that there is a fundamental contradiction in the government's policies, which is slowing down the SME efforts.

"Sir Philip Green's efficiency review is pushing government in precisely the opposite direction to their 'seek to fulfil an aspiration' to place 25 percent of all government business with SMEs. As is the 'Consultancy and Contingent Labour Strategy'.

"The push is for consolidation and fewer suppliers, not opening the market and more," he said.

SMEs have been reporting their experiences to the working group, with some saying that their place on some contracts with the Ministry of Justice, for example, had been taken over by large system integrators.

One software business went as far as to say: "We feel beaten up and bullied by government departments."

Taylor intends to raise these issues at a meeting with Maude on 26 September.

"We want an explanation about if they are being serious about SMEs and if they are, to explain why they are doing less," he said.


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