Tuesday, 20 September 2011

Are there really opportunities for SMES in the public sector?

I've written before about the unresolved conflict at the heart of goverment procurement policy - the need to save money and the desire to inolve more SMEs.   It was always likely that for all the rhetoric, money would speak loudest, and government departments would look for savings by aggregating requirements rather than look to the longer term game of stimulating competition.

A couple of other blogs today have provided examples - my friends at Government Opportunities are pointing out that one of the Government's own working groups (on ICT) is saying that things are going backwards - see here.

Meanwhile over at Bdaily, they report on the North East Chambers of Commerce calling for the National Procurement Framework for construction to be scrapped because it would disadvantage North East firms without national reach - see here.

These issues get to the heart of the public sector dilemma - if Britain were a private company it would be able to focus on getting the best quality at the lowest price.  Public Sector procurement always has a broader dimension.  Realistically it always it will.  You can call for all decisions to be made purely on a commercial basis, but the Bombardier issue shows that people (and the media) are not happy with that approach.  And what Politician is going to willingly give up the lever of using public funds to create jobs (and votes) for their constitency?

It is always going to be a difficult balance, and we should expect Politicians of all flavours to tailor their proposals to their audience - even if it leads to inconsistency.  I expect cash savings to dominate for at least another year or two, and then as the clamour for action rises, the policy to be revamped to favour the broader agenda - just in time for the next election.

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