Small Business Bids for Government Contracts

Cabinet Office – in the House of Commons at on 31 March 2022.

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Photo of Andrew Lewer Andrew Lewer Conservative, Northampton South

What steps the Government is taking to increase opportunities for small businesses to bid for Government contracts.

Photo of Neil Parish Neil Parish Chair, Environment, Food and Rural Affairs Committee, Chair, Environment, Food and Rural Affairs Committee

What steps the Government is taking to increase opportunities for small businesses to bid for Government contracts.

Photo of Bob Blackman Bob Blackman Conservative, Harrow East

What steps the Government is taking to increase opportunities for small businesses to bid for Government contracts.

Photo of Steve Barclay Steve Barclay Chancellor of the Duchy of Lancaster

We are increasing opportunities for small and medium-sized enterprises by transparently publishing contract pipelines and simplifying bidding processes. These measures are working, and the latest central Government procurement figures for 2019-20 show that £15.5 billion was paid to small and medium-sized businesses to help to deliver essential services for UK taxpayers.

Photo of Andrew Lewer Andrew Lewer Conservative, Northampton South

Under policy procurement note 06/21, the new carbon reduction plan requirements are obligatory for any Government procurement of more than £5 million. That is especially onerous for SMEs, including those in my constituency of Northampton South. How will Ministers try to make this more proportionate for SMEs, which have much less ability to afford such costly bureaucracy?

Photo of Steve Barclay Steve Barclay Chancellor of the Duchy of Lancaster

I am sure that the ears of my right hon. Friend the Minister for Brexit Opportunities and Government Efficiency will have pricked up at the suggestion of any regulation that is onerous and will want to look at that in detail. It is worth reminding the House that the £5 million figure applies per annum and that advice is available—only one plan is required and there are private sector organisations that provide advice and support, some of which is free. However, my hon. Friend raises an important point and I am sure my right hon. Friend will want to look at that to reassure himself and the House that it is proportionate to need.

Photo of Neil Parish Neil Parish Chair, Environment, Food and Rural Affairs Committee, Chair, Environment, Food and Rural Affairs Committee

Both the report from the Select Committee on Environment, Food and Rural Affairs in April last year and the national food strategy, which came out last July, made recommendations to the Government on transforming public sector food procurement. While we still await the Government’s response to the food strategy, we will need shorter, more local supply chains, so that we can get great-quality, sustainable British food into the public sector. The south-west stands ready to be used as a pilot to test out a dynamic procurement system, but plans are stalling after funding from the Crown Commercial Service for the South West Food Hub was withdrawn. What can my right hon. Friend do to speed up the roll-out of the dynamic procurement model? Will he look again at supporting the South West Food Hub as a pilot, because it is doing great work?

Photo of Steve Barclay Steve Barclay Chancellor of the Duchy of Lancaster

I am extremely keen to work with my hon. Friend on this issue. He raises an important point and I am happy to meet him as a matter of urgency to take this forward. It is worth reminding the House that there was not specific funding for this; the memorandum of understanding with the South West Food Hub did not include specific funding. The CCS had been using its existing headcount and funding to establish a commercial solution for food, but the wider point he raises is a very valid one and I am extremely keen to explore it with him.

Photo of Bob Blackman Bob Blackman Conservative, Harrow East

Small businesses experience frustration in getting on to the list of both local government and national Government contracts, so I welcome the light-touch approach that my right hon. Friend is taking. Will he assure me that taxpayers will also benefit from the transparency, so that everyone can see what contracts are being made, how much they are for and what the benefit is in the long term?

Photo of Steve Barclay Steve Barclay Chancellor of the Duchy of Lancaster

My hon. Friend raises an extremely valid and important point: simpler and more transparent processes, ones that are more accessible to the innovation of our small and medium-sized enterprises community, in turn drive far better value for money. As constituency MPs, we all see that, across the House, with our SMEs. This is very much at the heart of what the Minister for the Cabinet Office and colleagues are driving through with the procurement legislation that is planned, and it is exactly the point that we want to take forward.

Photo of Andrew Gwynne Andrew Gwynne Shadow Minister (Health and Social Care)

Many moons ago, after the global financial crash, Tameside Council developed an initiative called “Tameside Works First”, which was a way of circumnavigating the then Official Journal of the European Union rules on public procurement and meant that the council could award far more contracts to local companies, massively benefiting those local companies. We do not have OJEU rules any more, so I would like to offer Tameside Works First to the Minister. Let us have a Britain Works First initiative and encourage local government and central Government to do more to award contracts to British companies.

Photo of Steve Barclay Steve Barclay Chancellor of the Duchy of Lancaster

The hon. Gentleman raises a legitimate point. We have all seen in our communities that local businesses often have a pride in the service they give because it is within their locale and they know the local school, business or hospital involved. Their own workforce have an interaction with it, so it is not just about the quality of the service, but the pride in what they are delivering. That is not always reflected in simple tender prices that are bid. It is very much at the heart of the procurement legislation that we look at social value, for example, how many disabled employees a bidding company has. We need to consider that wider social value, looking at issues such as food miles and quality, not simply at the money that is bid. This is also part of having a more transparent, accessible and simple process that enables SMEs such as the ones to which he alludes to take part in those contracts.

Photo of Jim Shannon Jim Shannon Shadow DUP Spokesperson (Human Rights), Shadow DUP Spokesperson (Health)

In my Strangford constituency and across Northern Ireland, we have large numbers of small and medium-sized businesses, with excellent people and entrepreneurs with talent and ability. What can be done to enable such businesses in Northern Ireland to obtain Government contracts and reinforce the fact that the United Kingdom of Great Britain and Northern Ireland is always better together?

Photo of Steve Barclay Steve Barclay Chancellor of the Duchy of Lancaster

I absolutely concur that we are better together as the United Kingdom. The ability shown in the pandemic to act across the United Kingdom, including through the firepower of Her Majesty’s Treasury in respect of schemes such as furlough, has amply demonstrated that.

On the hon. Gentleman’s more specific point, one material thing that can be done is on the visibility of the pipeline of available contracts. There is around £250 billion-worth of public procurement and around £50 billion-worth of central Government public procurement, and I am extremely keen that SMEs in Northern Ireland are able to get visibility of that pipeline, so that we can tap into the talent and entrepreneurial spirit of which the hon. Gentleman speaks.