One by-product of the United Kingdom’s vote to leave the European Union has been a rapid recalibration of economic policy. While ministers have been at pains to talk up the UK’s prospects in the wake of a final divorce from the EU, there has, in parallel,been a rather more muted acknowledgement that things could get very tough in the medium term.
So things have changed. Under the previous Chancellor of the Exchequer (Finance Minister) paying down the national debt and budget deficit was the priority and austerity was the watchword. Going forward, there will more government spending on infrastructure to stabilise the economy. Think airports, high speed rail links, housing and broadband networks.
All of which is good news for the large organisations that build the infrastructure and their sub contractors. But what what about smaller businesses? What can the government do help SMEs if and when growth begins to slow.
Up In The Cloud
Well, if spending is to edge up a notch or two in the years ahead, one thing that government could do is make it easier for small firms to bid for public sector contracts.
And actually there has been a lot of progress on this, partly due to the G-Cloud procurement platform. Launched in 2012, G-Cloud essentially streamlines the process of bidding for public sector work by allowing small and medium sized businesses to register once as suppliers, and in doing so provide all the background information that local and central government bodies generally require. Once registered, businesses can pitch for specific contracts, without having to go through a complete tender process every time.
And it’s proved popular. By 2015, the service had more than 2,500 suppliers registered, with 89% of that numbering SMEs. In total they were offering more than 22,000 distinct services.
So potentially it’s a great tool for SMEs trying to tap the public sector market. But is it fulfilling its potential. Earlier this week I spoke,local government official turned businessman Chris Proctor who feels that despite the merits of the system, it still has some way to go before it can truly said to be serving the needs of SMEs.
Both Sides Of The Fence
Chris Proctor has sat on both sides of the fence. At present he is Chief Executive of Oneserve, a company providing field management software services to a market that includes the building and construction sectors, the utilities industry and government. Prior to that he served as a councillor on Southhampton City Council in the South of England. In other words, he has been both a seller and buyer in the public sector marketplace.
And as Proctor acknowledges, G-Cloud has been useful tool in connecting Oneserve to public sector buyers but as he sees it, local government – notably local councils – are not making full use of the system.
It’s partly a matter of awareness. “What we find is that the majority of local councils come to us and ask us to tender,” he says. “We have to tell them that they can use G-Cloud.”
On the face of it, that doesn’t seem like too much of a problem. After all, G-Cloud is only four years old so it’s probably natural that a fair amount of work has to be done to raise its profile, both on the supply and buy sides of the equation.
But there are other issues that are unique to local council procurement. “Local government is a very challenging environment,” says Proctor. “Procurement is taking place against the backdrop of a very charged political environment. Making long-term procurement decisions can be difficult.”
That’s partly because of an electoral cycle, which can see political control changing rapidly. Reaching agreement on procurement – particularly on large of controversial projects – can require a lot of negotiation. Meanwhile G-Cloud contracts are standardised for two years. Fine as far as it goes, but if implementation of a big project takes one year at least, the available contractual terms may not be fit for purpose. As a result, local councils may be forced to go out to a conventional tender process.
According to Proctor, they often do. And once a council moves off G-Cloud and onto public tender, it’s a whole new process.
These are times of huge economic uncertainty. The falling pound is pushing up import prices – while admittedly also making it easier to export – and the Bank of England has just confirmed that its focus is now on taking steps to grow the economy rather than hit 2.00% inflation target.
Against this background, G-Cloud is an important tool for SMEs seeking to access government work. In the short term, Proctor argues that much more should be done to raise its profile. In the longer term – as its operations are reviewed – Proctor says more flexibility is need on contracts to maximize the opportunities for both buyers and sellers.
This article was written by Trevor Clawson from Forbes and was legally licensed through the NewsCred publisher network.