SMEs: Public Procurement Rules

16. What steps his Department is taking to help improve the (a) transparency and (b) complexity of public procurement rules for small and medium-sized enterprises.

The Procurement Bill will enable simpler, more flexible procurement processes and increased transparency of planned procurements. These changes will make it easier for small and medium-sized enterprises to compete for and indeed win public contracts.

When it comes to public procurement, I know that it is administratively easier for the Government to award contracts to bigger companies, as that involves a smaller number of contracts with a smaller number of companies. What happens is that SMEs then become subcontractors of those big national organisations but with reduced margins. It would really help local economies if SMEs could bid directly for Government procurement contracts, because that would raise margins at the local level and be a real boost to the local economy.

Not only that: it would increase competition for the contracts, enabling us to have even better delivery of our services on a cost-effective basis. I have good news for my hon. Friend: the most recent stats, for 2020-21, showed that the Government were spending £9 billion indirectly with SMEs and £10 billion directly with SMEs. We are making a lot of progress in opening up procurement, but I assure him that the Procurement Bill will make the pipeline easier and more transparent—there will be one core set of data already in the system—which will enable SMEs to focus on the bid itself. It will also ensure more uniformity across Government regulations and process. That will help SMEs and help level them up.