A new policy paper published by the Federation of Small Businesses (FSB) in Greater Manchester has lifted the lid on why so many small firms shy away from delivering public sector contracts.
FSB carried out research across the city region to better understand prevailing attitudes of small business owners towards public sector procurement, and to discover why so few firms see it as an achievable option.
The data, which has now been published in a 14-page policy paper, tells a fascinating story of distrust, misinformation, and perceptions of insurmountable barriers for the smallest firms who would like to work for their local councils, but see it as out of their reach.
The research follows the announcement by the Greater Manchester Combined Authority (GMCA) last March of plans to introduce a raft of changes to public sector procurement processes in 2023. One of the aims of which is to encourage more, smaller, local firms and VCSOs to deliver work for local councils, proven to put more money back in to regional economies than larger businesses do the work instead, meaning benefits for local wealth and job creation.
Commenting on the findings of the paper, FSB’s Development Manager in GM, Robert Downes, said: “Our research highlighted many reasons why smaller firms, in the main, shy well away from delivering contracts for local councils, but there were some consistent stand outs. The chief one is around perceptions, particularly that local councils would sooner give jobs to larger organisations because they think they are safe bets, although history has often shown us otherwise – Carillion springs to mind.
“The actual tender process itself is also seen as a barrier, with many firms saying it’s complicated, time consuming, and consequently out of reach of many smaller businesses, who lack the manpower and the experience just to complete the initial application process on time.
“And the other common complaint from firms who’ve previously ‘had a go’, is that they don’t get any feedback on unsuccessful applications. If you put time and effort into something that you eventually don’t win, you really need and want to know why, without that information how can do better the next time?”
The FSB report goes on to make seven recommendations that might remedy the issues identified, and encourage more firms to consider public sector procurement as an opportunity for growth.
Adds Downes: “Our 14-page report hopefully provides the public sector here in GM with some helpful food for thought. We think there are some simple, quick wins contracting teams could look at doing if they are serious about working more closely with the smaller end of the private sector. And there are some more long-term actions they may want to explore around culture change, and being seen to be fairer when deciding and awarding contracts.
“We’ll be sending our report to all contracting authorities in GM as well as other key decision makers. We know 2023 is going to be tough, and small businesses should be looking at new ways to stay resilient. Public sector procurement should be one of them, but change will be required to the current system for that to happen,” he added.
