27 June 2018

Minsters are being pressed to reform public procurement in order to promote best practice in the supply chain.

The Federation of Small Businesses (FSB) wants the Government to identify opportunities to split up big public procurement contracts, make better use of Dynamic Purchasing Systems and to make sure that large suppliers pay on time.

Evidence from a new FSB report (“Chain reaction: Improving the supply chain experience for smaller firms”) shows that 25% of businesses in the supply chain for public infrastructure projects experience late payment more than half the time.

It also shows that just 12% of smaller businesses in public supply chains say they have been provided with skills support.

“Healthy supply chains are a win-win for businesses and tax payers as they create genuine competition, drive productivity, help close skills gaps and fuel economic growth,” FSB Chairman Mike Cherry said.

The collapse of Carillion has demonstrated, he argued, the urgent need for the Government to promote a positive reform agenda, in order not only to increase value for money for tax-payers but also to minimise the risk of putting too much power in the hands of a few big firms.

By setting a good example, Government will lay down a marker for those leading the UK’s largest companies and encourage them to also embrace good supply chain practice, Mr Cherry added.

On a more positive note, the FSB’s survey has also revealed that 30% of smaller suppliers working with Government have received help to innovate, with suppliers reporting that they have received support in the forms of collaboration in design (28%) and mentoring and advice (25%).