Small businesses to benefit from new government buying rules

Thousands of small businesses across the country will have more opportunities to win valuable contracts with public sector organisations, kickstarting local economic growth and innovation and creating jobs for local communities as the Government delivers on its Plan for Change.

Measures announced by the Government will speed up and simplify procurement processes in the public sector, where £400 billion is spent each year on essential goods and services – driving growth and improving the lives of working people.

The changes outlined include proposals for a major shake-up of spending rules, with local councils able to reserve contracts for small businesses to maximise spend within their area and help boost local economies.

Alongside this, a new duty will be placed on firms that win contracts with government bodies to advertise jobs at job centres, delivering real change for people, bringing good jobs closer to home and getting Britain back to work.

The National Procurement Policy Statement (NPPS), will gear all parts of the public sector towards delivering growth. The new rules include eight actions to return public procurement back into the service of the country and working people, and drive forward the Plan for Change.

Georgia Gould, Parliamentary Secretary at the Cabinet Office, said: “Businesses tell me that the current system isn’t working. It is slow, complicated and too often means small businesses in this country are shut out of public sector contracts.

“These measures will change that, giving them greater opportunity to access the £400 billion spent on public procurement every year, investing in home grown talent and driving innovation and growth.”

Current processes require Social Value measures on contracts, which put requirements on businesses to help bring forward positive change in communities and the country as a whole.

However, there are currently multiple different approaches used across the public sector and potentially many different criteria, confusing business and making it harder to ensure the commitments made are actually delivered.

The Government will be updating and streamlining the system used by all central government departments and their agencies to align it with the Government’s missions.

This will make it simpler to use, giving small businesses a better chance when bidding for contracts, and will make sure companies who profit from government work give back to the community.

Small Business Minister Gareth Thomas said: “For too long small businesses have been stuck on the sidelines of the procurement process with complicated bureaucracy and a confusing system. That changes today.

“These measures will mean small firms can more easily offer their expertise to key projects both locally and nationally, helping SMEs to scale up, securing jobs and creating opportunities across the country.”