PARLIAMENTARY DEBATE
Government Contracts: Small Businesses - 11 February 2021 (Commons/Commons Chamber)

The UK spends £290 billion on public procurement each year. Now that we have left the EU transition period, we aim to make it simpler, quicker and cheaper for small and medium-sized enterprises and social enterprises to bid for Government contracts, as set out in our ambitious procurement Green Paper. We have already introduced a policy that will allow below-threshold contracts to be reserved for smaller UK suppliers, and we hope our new approach to social value will secure wider public benefit by allowing us to contract with firms that deliver more apprenticeships, local growth opportunities and environmental benefits.

I know that my hon. Friend will agree that our small and medium-sized businesses are the bedrock of our economy. I am sure that she will also agree that giving them the opportunity to bid for Government contracts will give them a significant boost and help them recover from what has been a very tough year. Will she lay out exactly how the Government will be promoting this opportunity to SMEs, so that businesses in Basildon and Thurrock can start to bid immediately?

I agree with my hon. Friend that the opportunities in this space are huge, and we think that our reforms will play a huge role in our post-covid recovery. For too long, complex and opaque procurement rules have benefited bigger and less innovative firms. Our reforms will simplify the current framework of over 350 regulations into one uniform set of rules, and move from seven procurement procedures to three. Our free-to-use digital platform, Contracts Finder, should make it easier for businesses in his constituency to find relevant opportunities. We want to make supply registration far simpler, so that data has to be submitted only once to qualify for any public sector procurement.

Small businesses in my constituency would like the opportunity to bid for more Government and council contracts, but the current procurement rules are too complex and inevitably favour big firms. Can my hon. Friend assure me that we will be using our new freedom from EU procurement rules to deliver more commercial opportunities to innovative, dynamic SMEs in Penistone and Stocksbridge?

Absolutely. I know that my hon. Friend, as someone who has run a business herself, understands the bureaucratic frustrations that too many of her constituency businesses come up against. We want public buyers to divide contracts into more accessible lots and allow them to reserve contracts under a certain threshold for small, innovative firms. We are also pushing ambitious targets on prompt payment, and we aim to simplify the bidding process so that it does not favour big firms, which inevitably have greater resources to devote to form-filling and box-ticking.

I welcome the recent Green Paper setting out the freedoms that the UK now enjoys to create a new framework for public procurement, including a new exceptional power for public bodies to commission for wider public benefit. Does my hon. Friend agree that we need to go further and make this exception the norm, ensuring more joined-up services and better overall outcomes for the public? Otherwise, we will be getting only half the Brexit dividend that we could in the field of procurement, with freedoms but not the actual implementation.

My hon. Friend is quite right. Our proposed procurement reforms will not in themselves deliver change unless commercial teams across the public sector actually understand how to deploy them to greatest effect. That is why we are introducing a programme of training for contracting authorities. On the matter of wider public benefit, I refer him to our social value model. We do not want to award only to those that make the cheapest bid; we also want to award to firms that offer value for money in a much broader sense, including to the community in which the service is being delivered. I know that is something he cares very passionately about, given his thoughtful review on a new social covenant.

I so welcome all that my hon. Friend has said on this. I am mustard-keen to see Government contracts open up and work for businesses and charities in Eastbourne. The latest feedback from one of my manufacturers, which has just ventured into this arena with a bid to the Ministry of Defence, highlights the absence of a published timeline on decision making for the contract, which the manufacturer says is essential information to allow it to plan for success, build capacity and ensure that it delivers for all its customers. Will she look at this situation, to ensure that the whole process is as transparent and as small business-friendly as possible?

I thank my hon. Friend for highlighting this; she raises an important point. I am happy to look into the specifics of the case and take it up with officials, or she might want to look at the public procurement review service. All Departments, including the MOD, are actively supporting the SME agenda, and one of the ways we hope to encourage more bids from SMEs is by publishing contract pipelines well in advance, so that they have much more time to plan and resource bids, and shorten the time in which contracting bodies make decisions.