Government urges public sector buyers to award more contracts to small businesses

The government issued new guidance to direct the public sector buyers to facilitate small companies winning a share of 400 billion pounds annually spending on goods and services.

The National Procurement Policy, which enters into force on February 24, encourages 20,000 public agencies to simplify tender operations for small and medium -sized institutions (SMES), as well as volunteer, societal and social institutions. This step is designed to reduce bureaucracy, push social change, and help small companies compete for government contracts.

The Cabinet Office told the buyers to “increase the spending of purchases” with small and medium -sized companies without compromising the value for money or quality, as part of the broader efforts to increase economic growth.

With small and medium -sized companies receiving about 20 percent of spending on public purchases, reforms can open billions of pounds in smaller companies contracts. The Procurement Law for 2023, which will become valid at the end of the month, will provide greater transparency, and may provide more than 4 billion pounds annually, according to the National Audit Office.

“Companies tell me that the current system does not work. It is slow and complicated, and it often means that small companies in this country are closed from public sector contracts. These measures will change this.”

The new rules also require government departments to conduct local examinations to ensure that senior suppliers are pushing subcontractors within 30 days.

The “public interest” test is also provided, and it is determined whether government departments and local authorities should rely on contracts or provide services within the company to improve efficiency and value for money.

The Cabinet Office also explores ways to allow local councils to give the priorities of small and medium -sized companies in their societies on national suppliers, even when major companies offer lower prices.

Emma Jones, CEO of Enterprise Nation, welcomed the changes, saying: “By setting new standards in creating social value and enhancing the conditions for payment for 30 days, this new approach can witness many opportunities that open up to the small business community in the United Kingdom to grow ”

Increased contracts for small and medium -sized companies to 40 % by 2030

The Goldman Sachs report this week urged the government to increase the share of purchasing contracts granted to small and medium -sized companies to 40 percent by 2030. The government institute estimated that spending on the public sector of small and medium -sized companies remained about 20 percent between 2018 and 2023, which highlights the importance of Large room for improvement.

Jones believes that maintaining small companies will provide a large boost for local economies, ensuring that public sector spending supports innovation, sustainability and creates job opportunities in societies throughout the United Kingdom.

Since the government is looking to push growth and support smaller companies, companies will closely monitor to see if these reforms translate into real opportunities.

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