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IT must be a central focus if government is to achieve SMB target

With the government pledging that £1 in every £3 of spending will go to small businesses by 2020, Outsoucery says that IT will need to be front and centre in the war on mega-contracts

The government must revamp how it procures IT services if it’s to achieve its ambitious targets, says cloud services provider Outsourcery.

Last month, the Minister for the Cabinet Office, Matt Hancock, announced that £1 in every £3 that the government spends will be with small businesses by 2020.

“This is such an amazing opportunity for the country’s diverse and innovative small businesses, and today I urge them to get stuck in,” Hancock said at the time. “From computers to uniforms – there are so many opportunities for small businesses to work with us, and I want to see more of them providing value for money for the taxpayer and benefiting from our spending.”

However, Simone Hume, head of public sector at Outsourcery said that this lofty ambition would only be met with a clear focus on IT and a ‘disaggregation of government systems’,

“Technology is now so pervasive across government that it simply will not be able to achieve these new targets without a focus on IT suppliers,” Hume said. “Over time, many government departments and agencies have outsourced their IT services to large organisations. However, this practice has led to lengthy contract lock-ins, business continuity risk in moving away from the chosen supplier, capital investment in outdated infrastructures and an inability to take advantage of new technologies – to name but a few of the problems.”

Her Majesty’s Government has been making progress in its efforts to put some bread in the hands of the little man. The G-Cloud framework, designed to even the playing field and save the public sector money, saw sales of £26m in July, with 64% being awarded to SMBs.

In fact, the government has been so effective in its war on behemoth contracts that the 2020 target actually begins to look a little underwhelming. In 2013 to 2014, an unprecedented £11.4bn was spent with small and medium-sized businesses (less than 250 employees). That equates to 26% of central government spend or 0.78p out of every £3. So what it really aims to do is increase its SMB spend by five and a half pence for every pound spent each year, up until 2020.

The target seems decidedly less ambitious when broken down.

Many are calling for the target to be extended to all public sector spending, not just the central government contracts currently included in the one in three goal. Sarah McMonagle, head of external affairs at the Federation of Master Builders (FMB), said: “The Government’s announcement that every £1 in £3 is spent with small businesses is welcome but only applies to central government contracts. We want to see an increase in spend with small and micro firms across the board and by every public sector body. In many parts of the country, it is still the case that small firms are all too often squeezed out by larger competitors when bidding for public sector work.”

Regardless of the figure and the remit, most are in agreement that the overall objective is a worthy one.

“A multi-sourced vendor strategy, taking full advantage of more agile SMEs, enables government agencies to quickly switch suppliers to higher-performing, more cost-effective vendors throughout the life of the service,” says Hume. “Greater progression at a better price is surely a win-win for the government, SME vendors and the public.”

Hume concluded: “Our work within the public sector has put us on the frontline, witnessing government IT systems being encumbered by legacy contracts with large suppliers. We’re pleased with moves to spend more money with SME suppliers. The prospective savings from disaggregated systems will certainly be felt throughout the UK and especially in the pockets of taxpayers.”


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