Commons Sense

House of Commons · Ministers' Questions

Public Procurement: SMEs

Thursday 18 January 2024 · 5 questions

Summarised by AI from the official record, so it can contain mistakes.

Read the full transcript on Parliament.uk

At a glance

Answered 1 Partly answered 3 Not answered 0

Key points

  • Paul Howell asked about steps to improve access to public procurement for SMEs under the Procurement Act 2023.
  • David Davis questioned if the Government would consider blocking large companies from bidding for future contracts based on past performance issues.
  • John Spellar criticized the Government for delaying action on excluding companies from bidding, highlighting the need for timely decision-making.

Topics (select to filter)

Questions & Answers

Q1 Paul Howell
Business & Trade
Context

The question addresses the challenge of small and medium-sized enterprises accessing public sector procurement processes, which historically have been difficult for them.

Question

What steps his Department is taking to improve access to public sector procurement processes for small and medium-sized businesses. The Procurement Act 2023 aims to simplify and make procurement more effective, but SMEs still face barriers that prevent them from securing a larger share of the £300 billion annual expenditure.

Answer from 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.

Answered
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Q2 David Davis Con Goole and Pocklington
Business & Trade
Context

The issue concerns the Government's attempt to exclude a company, Fujitsu, from bidding for future contracts based on their past performance issues.

Question

To some extent, SMEs have historically been blocked out by large companies. This week it was reported that the Government tried to block Fujitsu from bidding for future contracts, on the basis of woeful performance in previous contracts. Will the Government give further serious thought to blocking large companies with terrible track records, such as Fujitsu, from bidding for future contracts and, if necessary, legislate accordingly?

Answer from 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, this morning the Cabinet Office received a letter from Fujitsu voluntarily undertaking not to bid for Government contracts while the inquiry is ongoing.

Partly answered

Not addressed: legislating to block companies like Fujitsu

How: Voluntarily Undertaking

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Q3 Paul Howell
Business & Trade
Context

The question deals with the impact of prior year turnover to contract ratio restrictions on SME growth and innovation.

Question

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?

Answer from 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.

Partly answered

Not addressed: committing to explore alternative measures

How: Removing Unnecessary Obstacles

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Q4 John Spellar Lab
Business & Trade
Context

The question addresses the government's delay in changing procurement rules to support domestic industries, as other major economies do.

Question

In his reply to the right hon. Member for Haltemprice and Howden (Sir David Davis), the Minister totally missed the point, because he referred to defined reasons why companies could be excluded. The Government and Parliament make the rules. They have been dragging their feet month after month, year after year, on changing that in this regard, but also in terms of supporting domestic industry, as every other major economy does. When will they sort this out?

Answer from Alex Burghart

The right hon. Gentleman will have heard what I just said to my right hon. Friend the Member for Haltemprice and Howden (Sir David Davis). I know that, as a lover of due process, he will believe that the statutory inquiry should appropriately have the final word on this.

Not addressed: providing a clear timeline

How: Due Process, Statutory Inquiry

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Q5 Jim Shannon DUP Strangford
Northern Ireland
Context

The questioner expresses sympathy over Tony Lloyd's death and thanks the speaker for the opportunity to pay tribute. The focus is on support for SMEs and businesses, particularly those involved in defence procurement and agriculture.

Question

May I, too, convey my sympathies to the family of Tony Lloyd? I thank you, Mr Speaker, for allowing us the opportunity to come together more fully as a House to pay tribute. My constituents in Strangford, and indeed people across Northern Ireland, including a large number of small and medium-sized enterprises and businesses—they create many jobs, wage packets and opportunities—very much want to be part of this process.

Answer from Alex Burghart

I certainly can. As my hon. Friend will know, Northern Ireland agreed to be part of the new procurement regime when we passed the Procurement Act, which is fantastic. Sadly, that is unlike our friends in Scotland, who will miss out on all the benefits of the best modern procurement framework in the world.

Partly answered

Not addressed: support for specific sectors like defence and agriculture

How: Voluntary Agreement, Modern Procurement Framework

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