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SMEs more likely to win public contracts in Scotland than England

Scotland is hoping to introduce a procurement reform bill into Scottish parliament next year

SMEs currently win approximately 78 percent of public sector contracts in Scotland, compared to just 13.7 percent from central government and 49 percent from local government in England, it has been revealed.

The figures were unveiled in a consultation document published by the Scottish government in asking for feedback on a procurement reform bill that it hopes to introduce into parliament next year.

Despite these impressive figures, Scotland is hoping to make it even easier for new businesses, SMEs and third sector organisations to access public contract opportunities.

The government claims that of the 78 percent of SMES winning public contracts, 60 percent of them are also Scottish. Only 37 percent of Scotland's turnover is accounted for by SMEs, but they account for 45 percent of Scotland's £9bn procurement spend, which means that "SMEs in Scotland therefore have greater access to procurement spend than their significance in the wider economy", according to the consultation document.

The figures provide a stark contrast to the situation in the UK, where the Cabinet Office said in 2010 that SMEs accounted for 50 percent of turnover in the UK, but were only winning approximately 6.5 percent of central government's procurement spend. It estimated that this would increase to 13.7 percent by the end of the last financial year.

Scotland claimed that its figures put it in the company of only four other EU member states - Luxembourg, Slovakia, Germany and Ireland - where between 2006 and 2008 SMEs had greater access to public procurement above the EU thresholds than their significance in the wider economy would suggest.

The consultation document reads: "The situation is very different for the UK as a whole (the Commission's analysis puts UK twentieth on the list of 27 member states)."

Scotland's overall spend is still almost 30 percent more than what England spends with SMEs at a local government level, which currently stands at 49 percent.

"Public sector spending on goods and services across Scotland amounts to over £9 billion per year. Good public procurement is a vital contributor to growing the economy and done well it can be an effective lever in supporting delivery of the government's priorities whether that is job creation, infrastructure development, strengthening our communities or supporting our transition to a low carbon economy," said Alex Neil, cabinet secretary for infrastructure and capital investment.

"That is why, I ask as many of you as possible, to enter the debate to ensure that the end product - the Bill - is forged from the meaningful and collective ore of your views and opinions. Your contribution large or small - let's have it. And with this, help shape procurement reform, its supporting processes, systems and tools as we advance further into the 21st century."

Meanwhile, the Cabinet Office has launched an online tool, dubbed Solutions Exchange, which aims to create an 'informal' way for SMEs to engage with and sell to government without expensive procurement costs.

Francis Maude, minister for the Cabinet Office, hopes that the portal will give SMEs a free of charge way to pitch innovative ideas to the public sector.


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