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Public sector urged to support small firms

Small businesses can deliver value for money and innovative solutions for local and central government a new study has found. The report, showed they can also play a significant role in improving social enterprise and the employment opportunities of disadvantaged communities.

A Study of the Benefits of Public Sector Procurement from Small Businesses provides evidence of the cost savings and other benefits small businesses can bring to the public sector market. It highlights the benefits that the public sector can gain from using small firms through better levels of service, innovative solutions and increased competitiveness in the longer term.

Through 20 case studies, from across the public sector, the report shows small firms winning contracts against competition from larger companies and then going on to successfully deliver. The report also provides strong evidence of the willingness of small firms to "go the extra mile", in terms of commitment and service delivery.

Alun Michael, Small Business Minister said: "Public procurement opportunities need to be more accessible for small firms. Procurement also has an important role to play in supporting regeneration and providing access for social enterprises and groups who are under-represented in the business community.

"The public sector need not miss out on the better value and more innovative approaches small businesses can offer. I urge local authorities to adopt improved procurement practices and to encourage them to reap the benefits of a diverse supplier base."

The findings of the report will be incorporated into the updated document Smaller Supplier, Better Value, published jointly by the Small Business Service and the Office of Government Commerce. Its purpose is to raise awareness within the public sector of the value for money that small businesses can offer and the issues that can make it difficult for small businesses to win public sector business.

The case studies provide many examples of procurement from small businesses, usually in competition with large businesses, where the characteristics of strong commitment and highly specialist skills are demonstrated.

The research concludes that widening the supplier base to include more small businesses may need extra procurement effort and professionalism, it can be rewarding across a very wide spectrum of procurement.

The Government is working with Regional Development Agencies to make training available to small and medium enterprises in all nine of the English regions. This will include help on how to tender for Government contracts. Programmes have already begun in the East Midlands and will be run in the North West and North East shortly. The Office of Government Commerce is delivering parallel training for the public sector to raise awareness of the benefits of working with small firms.

Find out more

Copies of the report, including details of all the case studies are available from the Small Business Service at http://www.sbs.gov.uk.

The new National Opportunities Portal website, to be launched later this year, will provide business with access to information on low value public procurement opportunities across central and local government. (This will ensure contract opportunities below £100,000 from local and central government are accessible in one place). www.supplyinggovernment.gov.uk

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