Public Procurement Support for SMEs 2025-03-06
2025-03-06
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Questions & Answers
Q1
Direct Answer
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Context
The question is prompted by the need to support cutting-edge businesses like Great Wave AI that are essential for driving innovation but often struggle due to procurement processes being too slow and inflexible.
In my constituency, there's a start-up called Great Wave AI helping the Government with AI. It wants to grow faster and do more work with Government Departments. What work is the Minister doing to ensure small British start-ups can play their part in the AI revolution in government, not just mega companies?
We are working with the Minister for AI and Digital Government to set up a new digital commercial centre for excellence. This initiative aims to ensure that SMEs specializing in AI can benefit from faster and more flexible procurement processes, enabling them to contribute effectively to government initiatives.
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Q2
Direct Answer
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The question is prompted by the significant local impact of Luton Airport investing £110 million in local businesses and the MP’s efforts to promote small businesses.
Luton Airport invested £110 million in local businesses last year, showing the value of supporting SMEs. What can we do to ensure that small businesses in Luton get a fair chance when it comes to public sector procurement?
We are setting stretching and transparent targets for each Department to maximise spend with SMEs. This includes asking Departments to advertise Government contracts locally so that businesses like those in Luton have a fair chance to participate.
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Q3
Direct Answer
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The question is prompted by the loss of over 100 jobs in Falkirk due to a lack of domestic support in the previous Government's policies.
Bus manufacturing needs domestic resilience. Over 100 jobs were recently lost in the Falkirk area because the previous Government failed to support British buses. What does the Minister expect from the bus expert panel next week regarding general increases in domestic procurement?
We are committed to supporting UK’s domestic bus manufacturing industry. The new national procurement policy statement aligns with our industrial strategy and pushes us to maximise spend with SMEs. Contracting authorities must now consider how their procurement strategies can support the bus manufacturing strategy.
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Q4
Direct Answer
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The question is prompted by the growth of SMEs in Ipswich and the ambition to further boost local employment through skilled jobs.
Hundreds of small businesses are opening up across Ipswich. What steps are the Government taking to ensure that young people in towns like Ipswich have the chance to find skilled, long-term, well-paid employment with SMEs?
We are streamlining how we measure social and economic value so that there is a very clear ask linked to our missions, including the opportunity mission. We are asking those who win Government contracts to advertise in local jobcentres to benefit young people looking for employment.
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Q5
Direct Answer
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The question is prompted by the financial instability of construction firms due to payment delays and the need for better protection.
In January it was reported that nearly 7,000 construction firms were on the brink of insolvency. Given that project bank accounts are used only by some Departments, will the Minister act where the previous Government failed to do so and introduce these accounts across all Departments?
Project bank accounts should be used unless there are compelling reasons not to. We recognise that timely payments are crucial and we will continue to work on improving this aspect of procurement to support the financial stability of construction firms.
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Q6
Direct Answer
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Pathways Care Farm in Lowestoft supports people with disabilities, mental health issues, and ex-offenders. The charity finds it difficult to access opportunities for public contracts due to its small size.
Does the Minister agree that organisations in the voluntary, community and social enterprise sectors and charities such as Pathways have an important role to play in providing solutions for the public sector?
I wholeheartedly agree. The new NPPS specifically asks contracting authorities to maximise spend with voluntary sector organisations, and we will be introducing targets for Government on spend with voluntary sector organisations and social enterprises. We are working to implement changes that allow local organisations to reserve competitions for low-value contracts.
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Q7
Direct Answer
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SMEs such as WJ Structures and Rothwells Paper in the questioner's constituency face challenges with government procurement processes, potentially leading to contracts going to multinationals instead of local businesses.
Can the Minister reassure me, and SMEs such as WJ Structures and Rothwells Paper in my constituency, that this Government will take steps to simplify the process, thereby keeping the pound local instead of contracts going to multinationals?
We are setting ambitious and stretching targets for direct spend on SMEs, reviewing our framework contracts to ensure they are more accessible to SMEs, and using AI to streamline procurement. The Procurement Act 2023 aims to remove some of these challenges.
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Q8
Partial Answer
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A question regarding the Crown Commercial Service's discussions related to the Romeo Mike 6277 (RM6277) network.
What discussions have been had with the Crown Commercial Service regarding Romeo Mike 6277 network—RM6277?
I have regular discussions with the Crown Commercial Service on a range of issues, including procurement matters. I look forward to spending another day with him in the Public Authorities (Fraud, Error and Recovery) Bill Committee later.
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specific details about RM6277 network discussions
Changing Subject
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Q9
Direct Answer
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Public sector procurement accounts for a third of all public sector spending and there is an ongoing need to ensure efficiency and effectiveness.
Given that public sector procurement accounts for a third of all public sector spending, what steps is the Minister taking to ensure that it is less siloed, more joined up, and as efficient as the private sector?
We are using AI to streamline procurement and have set up a new commercial innovation challenge at the heart of government. We also aim to procure collaboratively, crack down on excessive costs of private frameworks, and ensure transparency in our processes.
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