Scotland plans to get more SMEs working for government

Consultation on Scotland’s procurement reform bill sets out proposals to make public sector market more diverse

The Scottish Government is proposing to make it easier for SMEs to supply more of the £9bn Scotland’s public sector spends each year on goods and services, including ICT.

In a consultation on Scotland’s procurement reform bill, the government invites feedback about a range of proposals, including that public bodies should “consider and act to facilitate newer businesses, SME and third sector access” as part of their procurement strategy for every requirement.

The consultation document says this approach will ensure a uniform approach across the public sector in Scotland. It will also help encourage a mixed range of suppliers and stimulate a varied and competitive marketplace.

Scotland’s public sector has a good record in using SMEs, the government claims. Small companies account for just over 75% of all suppliers winning contracts advertised on Public Contracts Scotland, the portal launched in 2008 with the intention of providing easy online access to business opportunities.

The level of total Scottish public sector spend (by value) that goes directly to SMEs has been more than 45% over the past four years, excluding sub-contracts.

The government says that this puts it in the company of only four EU member states – Luxembourg, Slovakia, Germany and Ireland, In those countries, between 2006 and 2008, SMEs had greater access to public procurement than their significance in the wider economy would suggest.

“The situation is very different for the UK as a whole: the commission’s analysis puts the UK 20th on the list of 27 member states,” the document says.

In addition, the consultation says that the bill will provide an opportunity to consider making it a requirement to advertise sub-contract opportunities connected with all major public contracts on Public Contracts Scotland.

“We are keen to get your views on this,” it says. “At present, there is no single place where businesses can access sub-contracting opportunities related to public contracts in Scotland.”

Comments are also invited about increasing transparency within supply chains for major contracts and capital infrastructure programmes across Scotland and addressing poor performing suppliers

The origins of Scotland’s proposed procurement reforms date back to businessman John McClelland’s review of procurement performance in Scotland’s public sector in 2006.

McClelland found that the sector’s ICT implementations were often delayed and over budget, due to a poor grasp of the effort needed to change business processes and the adding of new requirements to a systems specification. He recommended that the use of standard or tried and tested applications could help to overcome the shortcomings.

The consultation will be open until 2 November 2012.

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