Minister for the Cabinet Office Francis Maude has outlined radical new measures which will open up Government contracts to local small and medium-sized businesses (SMEs) like never before.

Paying businesses on time is critical to the cash flow of smaller businesses in the East of England where 43% of SMEs see late payment from customers as a hindrance to growing their business. Under these new rules, the public sector is now required to pay undisputed invoices within 30 days, and this requirement will now flow all the way down the supply chain.

£11.4bn Government spend with SMEs

Central government spent an unprecedented £11.4 billion with SMEs in 2013-14, as new figures showed that a record 26.1% of government spend went to SMEs, meeting the aspiration it set in 2010 for 25% of procurement spend to be with SMEs by the end of this Parliament.

Research also shows that 36% of SMEs in the East of England don't know where to look to find new business opportunities. Today the Government launched a refresh of its Contracts Finder website, at www.gov.uk/contracts-finder, offering a much improved search including by location. The site covers current and future public sector contracts above £10,000 in central government and £25,000 in the wider public sector. It’s free to use, including from smartphones and tablets, and so businesses in the East of England will be able to search for contracts close to them.

The new legislation ensures that:

● 30 day payment terms will be mandated down the supply chain - to suppliers and sub-contractors;
● Public bodies will have to publish an annual late payment report to sharpen accountability;
● The bidding process will be simplified across the wider public sector with complex forms, such as Pre-Qualification Questionnaires, abolished for low value contracts;
● The procurement process for public sector contracts will be accelerated.

Minister for the Cabinet Office Francis Maude said: “As part of our long-term economic plan this Government is overhauling public procurement to open things up to businesses of all sizes. I am so pleased that our reforms have ensured that innovative SMEs benefited from £11.4 billion of business last year alone. Over a quarter of central government spend now goes to SMEs but we know there’s much more to do to support small businesses in the East of England, and these new reforms show just how determined we are to finish the job.”

Lord Young, the Prime Minister’s Enterprise Adviser, said: “Contracts Finder is a world first in terms of scale and ambition. It opens up government business like never before and levels the playing field for SMEs who, in the past, didn’t know how to find public sector contracts, let alone bid for them.”

Piers Linney, co-CEO of Outsourcery and member of the Government’s SME panel, added: “We know government business has been incredibly complicated and costly to bid for in the past, and that was reflected in the tiny proportion of spend going to SMEs. This new legislation and the new site create a huge opportunity for SME businesses with reduced cash flow risk. They need to educate themselves on their rights under the new legislation and really get under the skin of Contracts Finder to make sure they can seize that opportunity.”

More information on how the Government is making it easier for SMEs to win public sector contracts is available at: bit.ly/smesupplygov

● Guidance has been issued on the reforms, which is available via the following links:

● Guidance on the reforms

● Procurement Policy Note 02/15: Public Contracts Regulations 2015

● Transposing the EU procurement directives

The regulations implement new EU rules for public sector contracts which will speed up the procurement process. The UK is the first EU Member State to implement these rules, doing so in just 10 months (14 months earlier than the EU deadline).

Click here to read BBC’s ‘Dragon’ and co-CEO of cloud-based IT business Outsourcery Piers Linney’s guide to bidding for public sector contracts.

Click here to read how public sector contracts are benefiting SMEs in Hertfordshire.

Hertfordshire County Council has recently launched a new Supply Hertfordshire portal to make it easier to do business with the local authority.