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Baroness Neville-Rolfe was speaking at a Deloitte Digital event. I am delighted to be here today. I have spent a lot of time with Deloitte over the years and have seen their spectacular growth and success and I have an enduring passion for small business – my father was a farmer who went bust, but he rose from the ashes and founded a successful small consultancy business – in Brussels as it happens trading on his brilliant language skills.
Before entering politics I spent a long time in business. I was a main board and executive director at Tesco but I also worked at much smaller companies, including Dobbies garden centres and most recently at Crown Agents which provided overseas development services most brilliantly on vaccine delivery and in the Ukraine war. I know the challenges SMEs face every day, and I also know the opportunities we can unlock by making the right changes in government – particularly to the complex procurement rules that are the bane of the small businesses.
Happily I am now helping make these changes happen through the Procurement Bill which I have steered through the House of Lords and today is a great chance to discuss how the Bill and the changes I have pioneered will help small businesses get a bigger slice of the public procurement pie, both directly and through the supply chain. It’s good for you and it’s good for the country as a whole. By supporting your enterprise we help to grow the economy – one of the Prime Minister’s five core pledges to kickstart the New Year.
I want to start with some good news. Our determination to support small businesses through opening up public sector opportunities has led to record central government spending with SMEs – the £19.3 billion spent in 2021/2022, the latest data available, was the fourth consecutive increase. I’m sorry to say it’s not yet 1 in 3, it’s 27%, but progress has been made and obviously we’re determined to make further progress.
And it’s been thanks to some fantastic collaborative working with you – the SMEs – and across government. Along the way, we have been holding departmental feet to the fire and challenging our own colleagues. What are they doing to increase their spend with SMEs and start-ups? How are they helping to overcome obstacles involved with bidding for work or contracting with central departments and agencies?
We have been listening and learning. Working with industry, trade bodies, and the Cabinet Office’s own SME Advisory Panel – which hears first hand from 25 SME owners and entrepreneurs about the challenges and barriers they must overcome.
And we have been taking practical steps, such as government departments having the power to exclude suppliers from the procurement process if they cannot demonstrate a history of prompt payment to their supply chain, and using the Public Procurement Review Service, based in the Cabinet Office, to unblock overdue payments on cases that are raised with them.
But there is so much further for us to go together. After all, procurement accounts for around a third of all public expenditure each year: £300 billion., everywhere from huge projects like HS2 to local government, schools and prisons. Our focus is always on delivering the best possible value and outcomes from that investment: it is a major contributor to driving efficiency in public services. We want to see your portion of that public procurement pie chart grow even bigger – by using the Procurement Bill to help you, as well as venture capital and start-ups making a debut in contracting with the public sector.
I remember when I was at Tesco I was asked if we could help with schools, I looked into it and it was a nightmare of bureaucracy, so I said it wasn’t for us, but we have to change this. Your enterprise and innovation is the hallmark of companies represented here today. It is a sad fact that productivity has largely flatlined ever since the financial crisis and we are determined to change that paradigm. If we could get productivity up we could grow the economy without pain so we do need to work on that and we want to change that paradigm.
I know how important it is to […]
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