The number of freelancers working through umbrella companies, limited companies and other small enterprises looks likely to rise in the public sector, thanks to the government’s recently announced overhaul of procurement procedures. New plans to increase transparency and cut red tape surrounding competition for public sector contracts have been warmly welcomed by the Federation of Small Businesses (FSB).
The FSB has long campaigned for measures like this in both local and central government. Access to public procurement markets for small businesses in the UK has been little short of abysmal, with recent research placing Britain 24th out of 27 EU member states in this respect. A mere 24 per cent of contracts end up being secured by small firms in the UK, compared to almost double that number (44 per cent) in France. This effectively means that only 11 per cent of the total value of contracts awarded finds its way to small firms, even though the latter account for 49 per cent of the country’s turnover.
An elaborate and discriminatory Pre-Qualification Questionnaire had previously been required, a procedure which inevitable favoured larger firms. This will now be abolished, and a new government website (“Contract Finder”) will ensure much greater transparency about the availability of public sector contracts. The FSB’s national Director, John Walker, hailed the removal of the PQQ as a “bold move”, but cautioned against replacing it with an alternative hurdle which could be even more bureaucratic or confusing. He added: “The good thing is that the Government is going to publish figures on the amount of contracts going to SMEs so we will be able to measure its success and hold the Government to account if it is not working.”