NAO report shows government could do more to help SMEs with public procurement contracts
A member of the UK200Group of independent accountancy and law firms has today commented on a new report which shows how the government is working with SMEs.
Estimates from the Cabinet Office has shown that 27% of procurement spending reached SMEs in 2014-15, exceeding the 25% target set in 2010 by the government.
However, the National Audit Office (NAO) has said that this figure could not confirm whether this represents a true increase or another version of the figures since the Crown Commercial Service (CCS) conducted work to improve its data collection.
The NAO report said:
“For indirect spending, the Cabinet Office has surveyed a larger group of providers each year since 2011-12 so annual figures are not comparable. The CCS’ methodology for direct spending has not changed since 2011-12, but we cannot be certain that numbers are directly comparable due to the structure of the underlying data.”
In its report the NAO has warned that the government has failed to tackle the barriers that small companies face and has criticised the government saying that its initiatives are not sufficient to ensure that more work flows to SMEs.
Duncan Montgomery, tax partner at UK200Group member firm Whittingham Riddell, said:
“Government contracts do come with an up-front administrative burden when tendering, and while they have value for SME’s, moving the contract using normal upselling techniques tends to be harder going.
“The reality is, as this report says, that the government counts SMEs that are part of the supply chain, as opposed to direct contracts. That involves lots of estimates and calculations, in reality the government could try harder to get work directly to SMEs using procurement frameworks that encourage local contracts, rather than national contracts, which have a tendency to be monopolised and profits taken by larger organisations, before the subcontractor even gets a sniff of work.”
