Help on Hand for SME’s

Small Business Minister Mark Prisk hosted a summit for Small Businesses at the beginning of November outlining a package of measures to help around 5million SME’s to grow and boost enterprise across Britain. These businesses will be vital to economic growth as they are at the heart of the economy, providing 60 per cent of jobs and half of GDP. But despite 66 per cent of small and mediumsized enterprises (SMEs) being ambitious to grow within two to three years, just 20 per cent expand their workforce each year. Ministers from Department for Business, Cabinet Office, Treasury and Communities and Local Government announced three
major policies which aim to improve access to finance, make it easier to do business with the public sector; and allow social tenants to start up their business at home. The policies are detailed in a document entitled ‘Backing Small Businesses’. “As a former small business owner I know how important our SMEs are to
the growth of this country. I entered government with the goal of making this the most entrepreneurial decade in our history and I’m confident (these) announcements will help make that a reality,” Mark Prisk said.

Also announced at the meeting were moves to make public contracts worth £236 billion more accessible to small firms and to link procurement to prompt payment both of which were applauded by the Forum for Private Business. There will be a single, standardised Pre-Qualification Questionnaire (PQQ) across all departments, which will be required to publish not only their procurement contracts but also how many of them are awarded to SMEs. The Government is investigating utilising more ‘open frameworks’ or ‘dynamic purchasing systems’ to tackle what is often still a closed procurement system awarding contracts to ‘preferred bidders’ – typically large companies – effectively excluding many small firms for long periods of time.
 

Further, it is committing to pay the majority of primary public sector contractors in five days and will ensure firms further along the supply chain are paid within 30 days. The Forum’s Chief Executive, Phil Orford, welcomed the strategy. “Following the spending cuts, it is important the Government addresses the key areas of public procurement and payment in order to achieve a real private sector-led recovery with small businesses at its heart - which means business growth and job creation. Providing sound policies on procurement, finance and enterprise follow - and more importantly are followed through - this will prove to be a welcome plan that, along with more work on tax and red tape, should help firms to flourish. Freeing up supply chain finance will be even more crucial as the economy continues to recover. It is
right that the public sector sets the standard for private companies to follow, and strengthening initiatives like the Prompt Payment Code, which is one option the
Government has discussed, will certainly help to achieve this.”