This week in Parliament, one Government Minister asked another Government Minister a question, and although the question was answered, neither the question nor the answer went far enough. The Question from Lorely Burt in the Treasury was “what the value was of Government procurement with small and medium-sized enterprises in each financial year from 2010-11.” And her colleague in the Cabinet Office, Francis Maude answered her with the totals for each year. He pointed at that the Government has only monitored this spend since 2010 when they came into power which is clearly good news, however despite this commitment to monitor and increase the levels of SME procurement, the problem is that the Government really doesn’t understand the SME sector very well. This is because very few MPs or Ministers have ever worked in SMEs until they came into Parliament.
As I have written before, the definition of a SME extends from one person as a sole trader with a turnover of a few £100 a month through to a business that employs 250 people with a turnover of less than 50 Million Euros. According to Mr Maude, in their first year in Government the coalition commissioned £3.2Bn from SMEs and in 2012/13 that had risen to £4.6Bn. This is all good news, so perhaps it is churlish to criticise, but we do need to know how much is being spent with businesses that employ 250 people and those that employ 1-9 (the definition of a micro enterprise). This is because most analysis credits the micro and small businesses with the greatest levels of job creation. We also need to know how much money is being spent with other businesses because the Government promised to spend 25% with SME’s.
I have written about this issue before and may well write again. We can only hope that in the days before Small Business Saturday that Lorely Burt was not simply asking her coalition colleague a politically supportive question without wanting to spur on the whole Government. She and Francis must both use their influence to ensure that the Government does not limit its ambition to such a broad target. What is needed is for them to drill down into the detail of the SME sector, ensuring that all Government Agencies record procurement activity against the individual classifications within the sector. Once that is done, it will be possible for future Governments to set targets for procurement from the individual types of business and really assist the small business sector.