Oral Answers to Questions

Paul Howell Excerpts

Thursday 18th January 2024 Commons Chamber

[Sir David Davis (Haltemprice and Howden) (Con)]

4. What steps his Department is taking to improve access to public sector procurement processes for small and medium-sized businesses.

[Paul Howell (Sedgefield) (Con)]

8. What steps his Department is taking to improve access to public sector procurement processes for small and medium-sized businesses.

[The Parliamentary Secretary, Cabinet Office (Alex Burghart)]

The Procurement Act 2023 will deliver simpler and more effective public sector procurement, and it will help SMEs secure a greater share of approximately £300 billion of expenditure every year. The Act includes a new duty on contracting authorities to have regard to the particular barriers facing SMEs and to consider how they can be overcome.

[Alex Burghart]

I thank my right hon. Friend for his question. As he will know, there are clearly defined circumstances in which the Government can exclude companies from bidding for contracts. With regard to Fujitsu, he may be interested to hear that this morning the Cabinet Office received a letter from Fujitsu voluntarily undertaking not to bid for Government contracts while the inquiry is ongoing, unless of course the Government asked it to do so.

[Paul Howell]

When it comes to small and medium-sized enterprises getting Government contracts, sometimes the devil is in the detail and the unintended consequences. One business has told me that the prior year turnover to contract ratio restriction in public procurement is hindering the growth of businesses such as Kromek in NETPark, Sedgefield, forcing them to surrender margins to prime contractors and meet the contracting eligibility requirements, costing the UK Government the best innovation and costing SMEs growth. Will the Minister please commit to exploring alternative measures for assessing contract eligibility, including looking at the model of the US Government and their associated agencies?

[Alex Burghart]

I thank my hon. Friend for his question. I know that he will have followed the passage of the Procurement Act 2023 through Parliament closely, as will businesses in his constituency—particularly SMEs, I hope. He will have seen that the Act removes unnecessary obstacles relating to audited accounts and insurance for the conditions of participation, meaning that small businesses will no longer be shut out of the procurement process or incur unnecessary costs. That duty that I referred to earlier for those procuring Government contracts to consider how to remove barriers to SMEs will really change the landscape for our small and medium-sized enterprises.