Stephen Allott – standing up for SMEs, part 2

Yesterday we featured our interview with Stephen Allott, the Cabinet Office’s “Crown Commercial Representative” for small business – here is more from that pre-Christmas discussion.

One challenge for SMEs is the strong trend we’ve seen for more aggregated buying and more public sector organisations looking to drive collaboration and aggregation – often for very good reasons of course, but this can clearly work against the interests of smaller suppliers. We talked about the concept that aggregating demand is sensible but it shouldn’t necessarily lead to aggregation of supply – there’s a message there for all procurement people actually. For instance, having a picture of spend across the whole of central Government (or all of a large Corporate) is clearly vital in order to best manage that spend. But that doesn’t mean a single aggregated contract with a mega-supplier is the best supply strategy for every category.

Even huge firms start small - the garage where the first Apple was built

Allott believes the 25% target for  spend with SMEs is important because it focuses attention, even if, as he acknowledges, it isn’t very logical to have the same target for every organisation. MOD is always going to struggle to get 25% of its spend into the hands of SMEs, at least as first tier suppliers.  But the target is getting the issue on the agenda of senior people – a  “forcing device”, as Allott puts it.

He’s also points out that most Government expenditure doesn’t go through “the centre” or GPS. However, there’s only a certain amount he can do beyond Whitehall, although he’s pleased with the work the Supplier Feedback Service (SFS) does to promote good practice across the public sector. They respond to supplier comments or complaints about procurement processes and decisions anywhere in the public sector.

“They’ve handled 116 cases since February”, he says, and in many cases, their involvement has led to a change in process. (The SFS is undoubtedly a useful resource, and one which we believe more suppliers should use if they find they’re coming up against bad procurement anywhere in the public sector. Here's the link).

Allott points out research that shows “contract sizing” is the biggest issue working against SMEs across the EU – while that seems fairly obvious, it is interesting that the UK does tend to have bigger average contract values than pretty much every other EU country. It’s  not clear however what’s  going to happen to change that, and where he can take action to address the issue  – I can’t see MOD, DWP or even a large Council breaking up large contracts to favour SMEs. And the UK does have a more centralised administrative and political culture than, say, France or Germany, so perhaps this just reflects that wider situation.

Finally, I do believe him when he says “politicians are genuinely committed to this agenda”. Of course, the secret is knowing which levers to pull to actually make a difference – and even the politicians, however committed they are,  don’t always understand that.  Allott has only been in this role for a few months, and he is only working in this role on a part-time basis, so I’m sure he is still getting to grips with some of those public procurement mechanisms.

But we hope to catch up with him regularly and see how he’s getting on; he’s clever, enthusiastic, and developing a good understanding of the issues, and there have been some decent early successes, including the Innovation Launch Pad we featured yesterday.  If he can navigate his way around the Whitehall power maze, he should be an increasingly powerful advocate for SMEs.

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