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Small and Medium-sized Enterprises

Oral Answers to Questions — Cabinet Office – in the House of Commons at 11:30 am on 27th April 2011.

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Photo of Robert Halfon Robert Halfon Conservative, Harlow 11:30 am, 27th April 2011

What steps he is taking to increase access to Government contracts for small and medium-sized enterprises.

Photo of Julian Smith Julian Smith Conservative, Skipton and Ripon

What steps he is taking to increase access to Government contracts for small and medium-sized enterprises.

Photo of Mark Pawsey Mark Pawsey Conservative, Rugby

What steps he is taking to increase access to Government contracts for small and medium-sized enterprises.

Photo of Amber Rudd Amber Rudd Conservative, Hastings and Rye

What steps he is taking to increase access to Government contracts for small and medium-sized enterprises.

Photo of Francis Maude Francis Maude The Paymaster General and Minister for the Cabinet Office

On 11 February, the Prime Minister and I announced a package of measures, including launching our Contracts Finder website, eliminating burdensome and unnecessary pre-qualification requirements from the procurement process, and introducing new ways to allow small and medium-sized enterprises to challenge contract procedures when they operate in a way that makes life difficult for them. In addition, from the end of April, all Departments will be required to publish a set of specific, targeted actions to increase their business with SMEs.

Photo of Robert Halfon Robert Halfon Conservative, Harlow

Will the Minister set out what steps he is taking to increase access to public contracts for smaller, grass-roots charities as well? Does he agree that for the big society to work properly, we need to build the little society too?

Photo of Francis Maude Francis Maude The Paymaster General and Minister for the Cabinet Office

My hon. Friend makes the point very well. All the measures that we are taking to enable small and medium-sized businesses to participate more fully in Government contracts will, of course, apply to the voluntary and charitable sector as well. Indeed, it is estimated that 35% to 40% of the value of the contracts recently awarded under the Department for Work and Pensions Work programme will go to organisations from the voluntary and charitable sector. We believe that that will be worth in excess of £100 million a year.

Photo of Julian Smith Julian Smith Conservative, Skipton and Ripon

Will the Minister take this opportunity to name and shame those Government Departments that are doing well in opening up to small businesses and those that are currently doing less well?

Photo of Francis Maude Francis Maude The Paymaster General and Minister for the Cabinet Office

I certainly do not want to shame the ones that are doing well. We have found a number of examples of procurement processes that are not meeting the new requirements. For example, Durham police recently issued an invitation to tender for a £50,000 leadership training contract. The pre-qualification questionnaire alone was 38 pages long and contained a request for 163 separate items of information plus a security vetting form. That is unacceptable, because it causes many smaller businesses to lose the will to live, and they simply do not apply.

Photo of Mark Pawsey Mark Pawsey Conservative, Rugby

I am the former owner of a small business supplying products to the public sector. When applying to be added to a new tender list, I was often frustrated by the amount of red tape required. Will the Minister confirm that in future fewer company policies and statements will need to be provided to participate in the tendering process?

Photo of Francis Maude Francis Maude The Paymaster General and Minister for the Cabinet Office

We want to strip away all that nonsense. Under the last Government, there were 6,000 pages of guidance for some kinds of procurements. It is not surprising that smaller businesses just did not bother to apply; they knew that they were going to be excluded. There were turnover requirements and requirements for a track record of doing exactly that kind of work. The truth is that that is very bad for small businesses and we want to make things much better.

Photo of Amber Rudd Amber Rudd Conservative, Hastings and Rye

During a recent meeting, small and medium-sized enterprises in Hastings raised with me the difficulties not just of the paperwork, but of getting the capital requirements in this climate for procurement contracts with the Government. Will the Minister reassure us that that aspect will also be considered, as we try to make it easier for small and medium-sized enterprises to engage with the Government?

Photo of Francis Maude Francis Maude The Paymaster General and Minister for the Cabinet Office

My hon. Friend makes a good point. We are concerned that the working capital requirements should be proportionate and sensible and that the turnover requirements should be proportionate to the needs of the contract. All ridiculous requirements such as those that existed under the old regime—for example, always requiring three years of audited accounts, which automatically excluded huge numbers of new and innovative businesses—will be swept away.

Photo of Denis MacShane Denis MacShane Labour, Rotherham

Does the Minister accept the macro-problem? In south Yorkshire, a large number of private sector enterprises depend in whole or in part on public sector contracts. So much demand is being taken out of the economy, because of the deficit reduction plans, that such businesses face serious challenges. Does he accept that small enterprises face a real problem because of his Government’s macro-economic policy?

Photo of Francis Maude Francis Maude The Paymaster General and Minister for the Cabinet Office

I acknowledge that there is a problem—and it is one caused by the Government of whom the right hon. Gentleman was a member and supported. They left Britain with the biggest budget deficit in the developed world. I am waiting for the right hon. Gentleman to apologise for that; that would be timely.

Photo of Tessa Jowell Tessa Jowell Shadow Minister (Olympics and London), Shadow Minister (Cabinet Office)

In looking at an increased role for small and medium-sized businesses, will the Minister let the House know when his Department will publish the public services reform White Paper? It was commissioned last October to be published early in the new year. January became February, and the Prime Minister said that it was only two weeks away. Two weeks have become more than two months and there is still no sign of the White Paper. Is that the Government’s biggest pause, or have they just given up on public services?

Photo of Francis Maude Francis Maude The Paymaster General and Minister for the Cabinet Office

I am thrilled that the right hon. Lady is waiting for the document with such obvious excitement, and I can assure her that it will be well worth waiting for. This Government are committed to breaking up the old public sector monopolies and providing diversity, particularly with the growth of public service mutuals. The document will be published later this summer, and I can promise her that she will be delighted with it.