News and features

Mon, 8 Dec 2008

More government contracts for SMEs will boost economy, say groups

Greater share of public sector work for small businesses will help at local and national level, advocates claim.

Business groups have called on the government to ensure that a greater proportion of public sector contracts are awarded to small and medium-sized enterprises (SMEs) as they claim it will boost both local communities and the wider economy.

The move comes after a joint report from the British Private Equity and Venture Capital Association, the Confederation of British Industry and the Federation of Small Businesses found that at present, approximately 75 per cent of SMEs rarely or never bid for government work.

Over three-quarters said it is difficult to find out about public sector opportunities, while more than half believe the tendering processes for government contracts require too much resources for them to respond effectively.

FSB national chairman John Wright said government support is needed to ensure smaller firms are not put at a disadvantage when bidding for public sector work.

"Small businesses offer great value to communities and by using them, money is kept within the local economy," he commented.

According to figures from the Department of Business, Enterprise and Regulatory Reform, central civil government awarded £1.039 billion worth of contracts to SMEs in 2004-05.

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