Whitehall departments set SMB targets to hit 33% spend goal

But TechUK and suppliers say major barriers exist to increasing spend on SMBs

Government departments will have their own SMB procurement targets to help Whitehall achieve its aim of spending a third of its technology budget with small suppliers by 2020.

The Crown Commercial Service (CCS) will also identify particular IT contracts to champion to SMBs, according to the government procurement agency's chief executive, Sally Collier.

Speaking at an event hosted by industry trade body TechUK today, she said: "The priorities for the programme over the next Parliament, number one is to make sure that every government department has its own [SMB spend] target. That's every department setting its own target to enable the government as a whole to meet the 33 per cent [SMB spend commitment], a very big focus."

She added: "And also a promotion role and identifying individual opportunities with our colleagues within departments to say let's go with this particular contract and drive up the SMB content within those procurements, both directly and indirectly."

Her comments come as TechUK research revealed that major barriers exist to achieving the 33 per cent procurement target, which was first set in the Conservative election manifesto.

A total 90 per cent of 171 SMBs surveyed by the trade body support the target, but 96 per cent of respondents said civil servants do not understand the full potential of SMBs to deliver on contracts typically handed to Big IT outsourcers like HP and Atos.

TechUK's associate director of public sector, Naureen Khan, said: "Civil service culture and capability remains a key barrier to embracing a diverse supply chain. Here pre-procurement market engagement is really important.

"Going outside of the formal procurement process and working with the industry and market to access ideas and innovation to have a better understanding of what SMBs can offer - so using some of the existing tools like the Small Business Research Initiative - can help civil servants."

Other barriers included a poor procurement process for SMBs working indirectly for government, typically via the supply chain of a Big IT vendor responsible for a public sector project, an issue cited by 96 per cent of respondents.

Over 2013/14, 15.8 per cent of Whitehall's tech spend was indirect with SMBs, compared to 10.3 per cent direct with SMBs, making this issue an important one for suppliers. 

However, Fujitsu UK & Ireland chairman, and TechUK vice-chairman, Michael Keegan, argued larger companies can stop large government contracts becoming unwieldy for SMBs.

"Sometimes for SMBs it will be right for them to contract with government and sometimes they will be super grateful that they've got someone like Fujitsu," he said.

"They don't want to be distracted by a one-year procurement cycle  what they want to do is provide a great innovation that will help drive the outcome in a better way. It's the responsibility of large IT companies to help small and mid-sized companies fulfill that role."

One stand out success in TechUK's survey was G-Cloud, with 80 per cent of respondents approving of the framework, though the CCS came under fire earlier this year when it tried to strip some of the service's functionality.

Phil Dawson, president of Skyscape Cloud Services, said: "G-Cloud broke the mould and gave SMBs unprecedented access to the UK public sector, and the UK public sector unprecedented access to innovation, value and agility.

"G-Cloud enabled Skyscape to grow from start-up to scale-up in three years, and we believe that the value to the UK economy of the G-Cloud approach to commissioning should not be underestimated."

TechUK and CCS agreed to work on publicising tools that help SMBs feedback to Whitehall, or search out relevant contracts to bid on after the survey found 86 per cent of respondents had never used Mystery Shopper and 62 per cent did not think that Contracts Finder had helped small businesses access opportunities.

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