The role that Political parties play in creating jobs is often overstated by the Politicians themselves. However there is a great deal that they can do to increase the prospect of jobs being created in the private sector. This Government set off with a good ambition, to ensure that 25% of all Government procurement would go to SME’s (Small and Medium Sized Enterprises). They did so because there is a body of work that shows that this sector is best at creating new jobs. However it is not a case of one size fitting all. The SME sector includes Medium Sized Businesses that can be as large as employing 250 workers and turning over £50M and Micro Entities with less than 10 employees, and the evidence is that the best form of job creation comes from the smallest businesses. One of the challenges is to persuade the Government to understand this sector that they speak about so easily, and break down their own ambition so that the Small Business and Micro Entities get a reasonable proportion of this work and the job creation is maximised. This will only happen if the new Government commits to breaking down their own figures and not treating SMEs as one homogenous block. At present no Government or Local Government Departments make this distinction in their own record keeping so it is impossible to tell where the spend goes.
Along with the need for Micro and Small Enterprises to receive a meaningful share of Government contracts is the need for all companies that benefit from such contracts to agree to pay their own suppliers within a reasonable period of time. Most Government contracts are settled very quickly after the work is carried out. However the smaller businesses that are brought in as subcontractors by the larger enterprises can often wait 60, 90 or more days before they are paid for their work. This sort of treatment would be called stealing in most settings, but unless the Government and other Public sector organisations build such conditions into their contracts, the small businesses that could create the jobs will be left uncertain about their cashflow and unwilling to take the risk of employing additional workers.
As we approach the next General Election, few businesses will expect that the promises regarding commerce will figure as highly as those relating to the environment and NHS, but it is vital that the manifestos are literate and the promises are realistic and will make a difference.