Umbrella company contractors who had been hoping to benefit from more government contracts are disappointed that major corporations are still getting the bulk of the work.
According to the UK200Group, 92% of contractual orders are still being awarded to large businesses despite the coalition’s pledge to grant 25% to small businesses.
When the coalition came into power, it agreed to allocate 25% of external orders to the SME sector and put an end to mega IT contracts. But in the third quarter of last year, only 7.8% of state contracts were awarded to SMEs.
The UK200Group said that out of £3.6 billion worth of orders, only £227 million went to smaller suppliers during the three-month period and SMEs have good cause to feel ignored.
Jonathan Russell from Rees Russell accountancy firm said he was not unduly surprised by the results when you consider all the hoops businesses have to jump through to secure a government contract. He claims that government does not understand the way small businesses operate and presumes they have similar policies and procedures to large companies.
He went on to say that civil servants still expect small businesses to ‘sell to government’ whereas they should learn to buy from the SME community. As long as this mindset continues, the Civil Service will carry on wasting taxpayers’ money. The current procurement system is flawed by under delivery, overspending and lack of control.
He ended with a plea to the government to run courses to teach public sector organisations how to buy services.
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