IT contractors working through PAYE umbrella services are about to find it a whole lot easier to secure contracts with government departments, the Minister for the Cabinet Office, Francis Maude, has promised.

Mr Maude appears determined to build greater flexibility into Whitehall’s IT contracts. As he has said previously, he wishes to see an end to exclusive ‘mega IT contracts’, where only giant firms get a look-in and keep lucrative contracts for themselves year in, year out. The smallest private sector suppliers will now be given a chance, in an attempt to make government more accessible to ‘one-man-band’ contractors working through umbrella companies or owner-manager limited companies.

“Set breakpoints” will be introduced in new IT contracts, Mr Maude announced, ensuring that less money gets locked into lengthy, “mega” agreements with big companies. Large contracts that are already in the pipeline will be scrutinised: if they can be broken up into smaller agreements, they will be, which will benefit smaller firms. These initiatives are part of a package of reforms announced by the Cabinet Office, designed to make procurement easier for smaller contractors.

Addressing a gathering of SMEs, Mr Maude said: “You’ve told us contract size is one of the greatest impediments to you winning work. And we agree – government contracts don’t have to be and often shouldn’t be so big and complicated.”

The Cabinet Office has come under fire for its apparent tardiness in bringing about these changes, but Mr Maude was adamant that it was on course to meet its end-of-year target – a doubling in the value of contracts awarded to SMEs to £6 billion, taking it to 13.7% of the total spend.

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