Public Procurement Contracts (Small and Micro Businesses)

– in the Scottish Parliament on 30th May 2013.

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Photo of Alison Johnstone Alison Johnstone Green

4. To ask the Scottish Government how it ensures that public procurement contracts are open to small and micro businesses. (S4O-02188)

Photo of Nicola Sturgeon Nicola Sturgeon Scottish National Party

As part of our drive to achieve sustainable economic growth, we have quite significantly increased the ease of access to public sector contracts, especially through the introduction of the public contracts Scotland service, which provides suppliers with free access to Scottish contracting opportunities.

In 2012, the PCS service issued more than 11,500 contract opportunities. Of the businesses that won contracts through the PCS service, 82 per cent were registered as small and medium-sized enterprises. Information from the service indicates that the percentage of suppliers that were awarded contracts and which are registered as either small or micro businesses has increased from 55 per cent in 2011 to 61 per cent in 2012.

Photo of Alison Johnstone Alison Johnstone Green

I am pleased to hear the cabinet secretary’s enthusiasm on the issue and I welcome that progress, but it is important to focus on the value, rather than the number, of contracts that are going to small companies. I am concerned that recent answers to my parliamentary questions suggest that, although the number may have increased, the value of public contracts going to small and micro companies fell from 26 per cent to 18 per cent between 2010 and 2012. What action is the cabinet secretary taking to ensure that that decrease does not become a trend? Can she advise whether, within European Union rules, the Scottish Government can set an aspirational target for small-business procurement?

Photo of Nicola Sturgeon Nicola Sturgeon Scottish National Party

I welcome Alison Johnstone’s support on the issue and I reassure her that a key objective of our procurement reform agenda is increased access to opportunities for Scottish businesses, in particular for small, medium-sized and micro businesses.

In my answer I quoted some statistics from the PCS service, but let me also give some statistics from our spend data, which comes from the procurement information hub. I am also happy to provide more information in writing on this.

If we look at micro businesses, small businesses and medium-sized businesses, we see that about 46 per cent of the approximately £9 billion annual spend on public sector procurement goes to SMEs, which account for about 37 per cent of Scotland’s turnover. I am not standing here saying that we are doing well enough—particularly for micro businesses, whose share we want to increase—but our performance already compares well with the United Kingdom figure of about 25 per cent. That gives us a good base to build on; I assure Alison Johnstone that build on that is exactly what we intend to do, which is why we are taking forward such an ambitious programme of public procurement reform.