Whitehall urged to do more to help tech SMEs

Tech industry group says some initiatives designed to open up markets are poorly understood, but Crown Commercial Service chief Sally Collier insists Whitehall is "changing the way it does business" with smaller firms

By Civil Service World

03 Nov 2015

The government should be doing more to help small and medium-sized technology firms access the public sector market, according to a new industry survey.

Cabinet Office minister Matt Hancock in August set a target for a third of all government contracts by value to be awarded to small and medium-sized enterprises by 2020. According to the latest figures, contracts with SMEs currently account for 26% of all central government spend.

A survey of 171 British-based tech SMEs – carried out by lobby group TechUK – found that while 90% backed the target, a number of concerns still remain over barriers to market entry for smaller firms.

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Ninety-six percent of respondents did not believe the civil service had a good enough understanding of how SMEs could help their departments, according to the survey, while 86% said officials needed to make better use of Digital Marketplace, the single online platform established to help public sector organisations buy cloud-based web services.

While the government unveiled a requirement earlier this year for all public sector suppliers to be paid within 30 days, the survey found that SMEs were relatively sanguine about the speed of payments, with late payments ranked as the area of least concern.

However, there remained a lack of knowledge among firms of the Cabinet Office-designed tools intended to improve the buying experience for SMEs. Eighty-six percent of those surveyed said they had not used the Mystery Shopper complaints service, while almost two-thirds (62%) of respondents said they did not believe the Contracts Finder web portal – aiming to link suppliers with public sector tenders – had helped smaller firms.

There was strong support for G-Cloud among those surveyed, with 80% of SMEs saying the initiative had helped them to gain access to the public sector market.

Responding to the report, Sally Collier – chief executive of the Crown Commercial Service (CSS) unit – talked up the government's record to date on SMEs.

"We know that small businesses can be highly innovative and have the expertise we need to secure more value for the public sector," she said. "That's why government is changing the way it does business to open up public sector procurement to more small businesses. Already, 26% of government spend flows directly and indirectly to small businesses and by 2020, this is set to rise to 33%."

The Tech UK report urges the continued backing of the Digital Marketplace from both the Government Digital Service and the CCS, and calls on senior officials to ensure that G-Cloud is used as the primary route for buying cloud services.

And it calls on the Cabinet Office and the Department for Business, Innovation and Skills (BIS) to do more to help civil servants improve their understanding of the tech sector, suggesting that government builds on the work of BIS's industry engagement programme, the Small Business Research Initiative.

TechUK's Naureen Khan said her organisation's findings showed that the government was "on the right track" although there was "more work to be done" to improve Whitehall's approach to digital SMEs.

She added: "The next phase needs to focus on raising awareness and use of important tools such as G-Cloud, Contracts Finder and Mystery Shopper. Government and industry need to work together to enable and support better collaboration through the supply chain."

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