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01 May 2012

Small firms losing battle for public sector work

Reference number: FSB/2012/17

FSB News Release

FSB 2012 17

Issue date: Tuesday 1 May 2012

Small firms losing battle for public sector work

Small businesses are still struggling to win public sector contracts despite the Government''s efforts to make it easier, the latest figures from the Federation of Small Businesses (FSB) show.

The ‘Voice of Small Business'' survey panel of FSB members in England reveals 40 per cent of small firms believe the tendering process for public sector contracts is too complex, while 37 per cent think they are sidelined by public officials who believe bigger firms must be better.

The findings come despite the Government''s launch of its Contracts Finder website designed to make it easier for small firms to find and bid for public sector work.

The survey of more than 2,700 FSB members showed that although one in seven firms had bid for a public sector contract in the last year, 41 per cent failed to secure any business from any of the bids they had submitted.

Of those firms that had won contracts, only a quarter (27%) said they had found the Contracts Finder website useful, with twice that number (55%) relying on personal contacts and referrals.

The survey''s key findings reveal:

  • 40 per cent of firms want a simplified tendering process
  • 38 per cent believe the public sector should actively use small businesses or encourage consortia of small and medium sized firms where possible
  • 38 per cent believe public sector bosses should evaluate tenders based experience and ability rather than on the size and turnover of bidding firms

While there has been welcome progress with central Government''s performance, the FSB has long said that its initiatives will not go far enough unless they are adopted by the wider public sector. So the FSB is calling for all parts of the public sector to agree to the range of measures to support small firms detailed in the Procurement Pledge published by the Government last week.

The FSB is also taking action by undertaking its own research into local government procurement, surveying every council in the UK in order to identify and promote best practice. 

John Walker, National Chairman, Federation of Small Businesses, said:

"The Government has made an effort to raise awareness in the public sector that Britain''s entrepreneurs and small businesses are willing and able business partners.

"But clearly more must be done. While central government has raised its game, without a true culture change across the public sector as a whole the Government''s initiatives will have little impact."

ENDS