The government has introduced new guidance to facilitate small and medium-sized enterprises (SMEs) in securing a larger share of the annual £400 billion public procurement budget. Effective from February 24, the national procurement policy aims to streamline tendering processes, reduce bureaucratic barriers, and increase transparency. With SMEs already capturing about 20% of public contracts, experts foresee potential savings of over £4 billion annually. Key reforms include a "public interest" test for outsourcing decisions, spot checks on subcontractor payments, and local councils prioritizing community-based businesses over larger suppliers.
Businesses tell me that the current system isn't working. It is slow, complicated, and too often means small businesses in this country are shut out of public sector contracts. These measures will change that.
The new rules also require government departments to conduct spot checks to ensure large suppliers are paying subcontractors within 30 days.
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