London’s SMEs ‘softened’ by government contracts, Labor says | Tech Reddy

The government is “softening” opportunities for London’s SMEs by missing targets in the awarding of government contracts, Labor MP Angela Rayner has said.

Rayner said today City AM that the public procurement process was a “Tory racket”, with new figures showing only a quarter of London’s SMEs were successful in their bid to win a government contract.

The figures, from the Federation of Small Businesses (FSB), also show that the government has not met its goal of awarding public contracts in three to SMEs by 2022.

The FSB, a business advocacy group, warned that small businesses were being “locked out” of government contracts because of red tape and “unnecessary contract terms”.

Labor outlined its National Procurement Plan in September, which aims to give more opportunities to small businesses by cutting red tape in the application process.

Rayner said: “The Tory takeover racket is stifling the potential of London’s small businesses.

“Local employers are being pushed to the back of the queue behind giant corporations with more form fillers than workers.”

It came after research by the British Chamber of Commerce found that SMEs now receive a relatively smaller amount of direct government procurement spending than five years ago.

FSB policy chair Tina McKenzie said the UK’s procurement process needed to be “more streamlined and transparent” to help smaller companies apply.

“The proportion of small businesses winning public sector contracts is well below the government’s target of one in three, and more needs to be done so that innovative and ambitious small businesses are not locked out of unrealistic and unnecessary contract terms “, he said.

The government has been hit by claims of cronyism during Covid-19, with contracts allegedly handed out to companies that were linked to ministers.

This included a contract given to Alex Bourne, who ran a pub near the home of then health secretary Matt Hancock, for “tens of millions of vials for NHS Covid-19 testing”.

Bourne was previously a neighbor of Hancock and offered his services via text to the former health secretary.

A Cabinet Office spokesman said: “Government procurement spending with small businesses hit a record £19.3bn in the latest set of figures, for 2020-21 – a up £3.7 billion on the previous year.

“The new laws we are introducing will further simplify processes, strengthen the opportunities available to SMEs and make it easier for them to win government contracts.”