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Only 12% of government contracts awarded to SMEs

Still some way to go to reach 25% target

Just 12 percent of government contracts are awarded to SMEs, the Cabinet Office has revealed.

Although this has increased from seven percent, there is still some way to go for the government to reach its target of giving SMEs 25 percent of business.

However, Liam Maxwell, director of ICT futures at the Cabinet Office, was keen to reconfirm the government's commitments to smaller businesses at the Intellect Annual Regent Conference in London today.

"We are doing more with SMEs," Maxwell insisted, saying that helping smaller firms to grow was the quickest way to raise tax and National Insurance revenues.

He added: "We also want to commit more to SME engagement because we get better deals."

Maxwell admitted that government has not found the shift from larger suppliers to SMEs easy.

There is the cultural change, for one, but also, when Cabinet Minister Francis Maude embarked on the project to change the supplier base, the government found that it held very little data about what suppliers it had.

"There was one supplier where we thought did X and they said 'we do Y' and Y was 20 times bigger than X," said Maxwell.

SMEs also struggle to work with government due to its 300 different platforms, he added.

"We should have a common platform to allow smaller businesses to invest in government," Maxwell said.

However, Mark Taylor, CEO of open source software specialist Sirius and leader of The New Suppliers to Government working group, believed that government spend with SMEs is not growing as much as the latest figures suggest.

"These new figures confirm everything I have heard from SMEs in the past year. In fact in many areas the consensus is that things are going backward and government departments are spending less with SMEs, not more.

"We have personally experienced being called in by departments to add SME 'magic pixie dust', being given 3 hours to submit a tender, then being rejected for 'insufficient detail' in the tender. Is 'speak to a token SME to check that irritating box' the full extent of reform we can expect?" Taylor said.

He added: "Until the government itself leads in this area, any rhetoric about 'SME-led growth' sounds hollow."


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