Ministers want to use post-Brexit freedoms to overhaul the bidding process for public contracts so small businesses can compete against giant companies that know how to “game” the system.
A Government source said: “We’re moving away from 350 different European regulations that govern procurement down to one British one, and we’re making the system as fast, transparent and light-touch as possible with a focus on making it easier for small businesses to get procurement contracts.
“Because, at the minute, they are dominated by big businesses which have huge compliance budgets that know how to game the system, that know how to navigate through the complicated applications.
“Our [plan] is to make sure it’s really, really easy for small businesses up and down the country to bid for Government procurement. That means it will open up £300billion to be better spent with small businesses in the UK.”
In the latest sign that the Government will use its Procurement Bill to stage a major shake-up of how public money is spent, Jacob Rees-Mogg, the minister for “government efficiency and Brexit opportunities” has given the thumbs-up to a new report which claims that innovative start-ups are at present “locked out” of the procurement system.
The Entrepreneurs Network, which is launching the report today, claims that taxpayers are “paying too much for underperforming public services because the government is failing to buy from small businesses and start-ups”.
A key complaint is that bidders are often required to “demonstrate that they have delivered contracts of similar sizes”. They say this “effectively excludes start-ups from many tenders”.
It warns that public bodies are public bodies put up “unnecessary barriers” by insisting people from start-ups “attend useless training courses” and “obtain expensive liability insurance for low-risk activities”
Mr Rees-Mogg said welcomed the “astute briefing on the opportunities of procurement reform,” saying: “I want to ensure our reforms are as ambitious as possible, achieve value for money for taxpayers by reducing bureaucracy for businesses, and make it easier to procure new technologies; the public sector must not be frightened of start-ups and innovation.”
Conservative MP John Penrose said: “Competition delivers better services at lower prices. It is essential then that small businesses and charities can compete on a level-playing field against long-established incumbents.
“Unfortunately, smaller challengers with fewer resources to navigate public sector bureaucracy and red tape are too often frozen out.”