As the business sector struggles to predict the fallout from the extensive public sector funding cuts, the government has been unveiling plans to redirect the country’s economic recovery to the private sector. They have announced a mammoth £236 billion worth of public contracts, which will be made available to small businesses. There will also be a direct link between prompt payment and procurement.
These programmes are, of course, just the beginning. So convinced are the government that the answer lies with the private sector that they have devised all manner of incentives to drive growth there. These include policy changes to allow social housing tenants to start up businesses from home.
FPB’s Phil Orford commented: “Following the spending cuts, it is important the Government addresses the key areas of public procurement and payment in order to achieve a real private-sector-led recovery with small businesses at its heart – which means business growth and job creation.”
He continued: “Providing sound policies on procurement, finance and enterprise follow – and more importantly are followed through – this will prove to be a welcome plan that, along with more work on tax and red tape, should help firms to flourish.”
Mr Orford concluded: “Freeing up supply chain finance will be even more crucial as the economy continues to recover. It is right that the public sector sets the standard for private companies to follow, and strengthening initiatives like the Prompt Payment Code, which is one option the Government has discussed, will certainly help to achieve this.”