Procurement rules rarely feature in the most exciting things to discuss in any social gathering, but they can have a profound impact on the ability of people to earn a living and provide a service in their own area. One of the noticeable distinctives of the industry statistics for East Sussex and Brighton & Hove is the extent to which Small to Medium Size Businesses dominate the area. In large part this is because there are very few large traditional businesses and so the need to ensure employment opportunities are provided puts more focus on the smaller businesses that do exist. The coalition Government have promised to increase the proportion of contracts that they would award to SMEs and they have also encouraged local government to follow their example.

“A year ago the Prime Minister and I launched a package of radical measures to increase opportunities for SME suppliers and to give us access to SMEs creativity and innovation. With the ultimate aspiration that we would deliver 25% of our central Government procurement spend through SMEs by the end of this Parliament.” Francis Maude speaking in March 2012

This focus on smaller organisations has the potential to improve the likelihood for local businesses and charities to win contracts. This is particularly true where these businesses or charities are required to visit people or buildings on a regular basis. Smaller businesses cannot usually afford to extend employees across the country to ensure that they have someone in every County or region on a consistent basis, particularly if the work involved has a significant service element. Small businesses will usually have a smaller area within which they will work. This should usually lead to such business models being more environmentally sustainable.

As with most policy decisions the devil is in the detail. The Government uses definitions for business size that is agreed throughout the European Union. This provides three categories within the range of SME:

Micro entities – 10 employees or less

Small companies – 11-50 employees

Medium size enterprises – 51-250 employees

Each of these categories also carries a turnover figure.

My own view is that the Government needs to go further and make a commitment to also establish some level of commitment to support small and even micro entities. In Sussex many of our businesses are micro entities, and only a small proportion are as large as to employ more than 50 people. This would have a significant impact on improving employment prospects for people currently looking for work in our area.

I work for a company that fits the description of being a micro entity and 3 years ago we became aware of an opportunity to tender for a contract that Kent County Council were organising on behalf of five Counties including Kent and Hampshire. These were Counties that are geographically diverse and the nature of the work depends on having staff close to the place of work to be on site with limited notice. Although there was the prospect of sharing the work with other companies, within the period of time allowed for assembling such tenders it would have been impossible to have made the relevant contacts. The contract also demanded on having a very high level of insurance cover, to even submit a tender response. This would have cost our company a sum of money which we felt would not have been a good use of our resources on what was inevitably a speculative process. Rather than allow these barriers to completely discount our engagement we sent a response explaining why we had decided not to submit a tender for this work. To their credit Kent County Council, who have just reissued the contract for tender for the next three years have responded positively to our concerns. The Insurance limit is now only required if the tender is successful, and the wide geographical area has now been broken down into smaller chunks, enabling companies to bid for small parts of the overall contract. It is important that good practice is acknowledged. So thank you KCC, well done for listening. Thankfully the company has grown a little in the last three years, despite the recession and we are even better placed than we were three years ago to put in a tender response. In an ideal world local government and Central Government agencies would issue draft tender invitations to allow businesses and charities to comment on these before the tender process itself begins. This might allow the learning to happen a bit quicker and improve the prospects for the SME sector, and the economy more broadly. However for the moment we have a tender to respond to!