Press Releases

Pilots Launched To Help SMEs Secure Government Contracts - Paul Boateng

Press release 14/03

The Government today launched two pilot schemes that will ensure there is easier access to government contracts for small businesses in areas where many are owned by ethnic minorities.

Chief Secretary to the Treasury Paul Boateng outlined details of the pilots in the West Midlands and Haringey, North London, when he addressed the Ethnic Minority Business Forum in London. In both pilot areas for the trials, Small and Medium Enterprises (SMEs) are vital to the local economy.

A high proportion of the 290,000 SMEs in the West Midlands are owned by people from ethnic minorities, whilst 47 per cent of businesses in Haringey are ethnic minority owned.

Chief Secretary Paul Boateng said:

"Government has been listening to the concerns of small businesses and is determined to ensure that the role they perform in the local economy is given proper recognition. Black and ethnic businesses are central to this in many parts of the UK."

"We have acted to help businesses access Government contracts more successfully. These plots will help test solutions on the ground in our business communities to make sure that SMEs are helped to deal with issues such as bidding costs, advertising, information, processes and paperwork."

"We will be reviewing the pilots when the results are available in the coming year so we can build on the lessons learned. This is a vital step forward for small businesses and the equal opportunity agenda."

Inthe West Midlandsthe pilot will:

• Simplify the mechanisms by which small to medium sized businesses find out about and bid for government work.
• Streamline the procurement processes to provide a simpler and more cost-effective approach, including piloting a standardised 'pre-qualification' process.
• Setting up of a Regional Supplier Development forum.

In Haringey the pilot will:

• Develop a web 'portal' by Trade Local, which will include information about tendering opportunities both within Haringey.
• Simplify Haringey's 'pre-qualification questionnaire' - the application form that all prospective suppliers need to complete in order to be considered as a supplier to government - and other tender documents, to assist companies in understanding the requirements.

Measures already taken by the Government to support SMEs with procurement issues include:

• New Financial Appraisal Guidance, allowing SMEs to be considered for government contracts even if they cannot produce three year audited Accounts.
• Distributing contact details for the purchasing department of all major government departments and NDPBs.
• Taking steps to actively encourage public sector buyers to consider the potential benefits offered by SMEs when placing contracts with suppliers.
• The running of pilot schemes to establish a 'common IT language', which will allow SMEs to conduct business online with government regardless of which IT system they use.

NOTES TO EDITORS

1. Both pilots will run into the Spring of 2005. An evaluation will be carried out within 12 months.

2. In the West Midlands, the Office of Government Commerce will work closely with Advantage West Midlands, the Government Office for the Region, the Small Business Service (part of the DTI) and the Department of Work and Pensions, along with other central government departments.

3. In Haringey the pilot will be lead by the Small Business Service, working with Trade Local, a widely praised initiative of the borough council to promote a more open commercial relationship between local government and local businesses.

4. In addition to making it easier for SMEs to access government contracts, Government has introduced a wide range of measures to encourage and support enterprise across society. Measures to help create the right environment for small business to flourish have focused on maintaining a stable macroeconomic environment, modernising the tax system to ensure that entrepreneurship is rewarded and ensuring that regulation does not impact disproportionately on small businesses. Government has also introduced a series of more targeted measures to tackle specific market failures such as access to finance, skills and business advice. The Treasury launched the 'Bridging the Finance Gap' consultation at Budget 2003 which focuses on how to ensure that growing and small businesses have efficient access to capital. The consultation runs till July 25^th 2003.

5. Established in April 2000, the OGC was set up to act as a catalyst in procurement issues and to work with civil departments to achieve best value for money in their commercial activities. Responsible for civil central government procurement policy and Best Practice including Construction, Property Management, IT, Supplier Relations including opening up government contracts to SMEs, e-commerce including the Government Procurement Card, the Gateway Review Process, OGCbuying.solutions, including the development of Government buying catalogues such as G-Cat, L-CAT and S-Cat and developing strategic procurement partnerships with the private sector.