Government commits to spending additional £100m with SMEs by general election

Cabinet Office minister Francis Maude has committed to an additional £100 million of Whitehall spend with small businesses before the next general election, as part of ongoing reforms to boost supplier competition in the public sector.


Cabinet Office minister Francis Maude has committed to an additional £100 million of Whitehall spend with small businesses before the next general election, as part of ongoing reforms to boost supplier competition in the public sector.

It was also announced at an event this morning that Whitehall departments will begin to move away from proprietary software vendors, such as Microsoft, towards open source in a bid to save money and make it easier for civil servants to share information with each other.

“At the time of the last General Election just six percent of central government procurement spend was with SMEs and government did not even monitor who its suppliers were,” Maude told attendees.

“We’ve stripped out unnecessary bureaucracy and paperwork and ensured a level-playing field for all businesses. Now direct spend with SMEs is up above 10 percent and we are spending a further nine percent indirectly.

"That’s good news for SMEs across Britain, but we want to see these numbers grow further.”

He added that in the past departments had been paying “top dollar” for yesterday’s technology and as a result has been locking out innovation.

The government recently published its ‘red lines’ for IT contracts, which Maude said he will be militant about enforcing, where departments will now no longer be able to pay more than £100 million for an IT deal.

Alongside this, the Cabinet Office has also had some success with the G-Cloud’s CloudStore, an online catalogue of commodity cloud services for departments to browse and compare, which is largely made up of SMEs. Similarly the Digital Services Framework, a resource for Whitehall departments looking to tap into digital skills they don’t have in-house, mostly has SMEs listed and plenty of companies that have never before worked with government.

“The public sector as a whole has spent £78 million through CloudStore already. And over half of this – 53 percent - is going to small and medium-sized firms. Central government is spending even more with SMEs – two-thirds of its purchases on CloudStore, 66 percent, are going to SMEs. That’s a lot of contracts going to Britain’s most promising start-ups and dynamic small businesses from central government every year,” said Maude.

“If we saw as much money going through CloudStore every month as we did this November, the annual spend would be £120 million. That’s a lot of money going through channels specifically designed to be accessible to all businesses, whatever their size.

“But we not stopping there. That’s why I’m pleased to set out my ambition today that through the CloudStore and digital services framework we will spend a further £100 million with small businesses offering IT services and technology to government by the next General Election,” he added.

The future is open source

Maude also insisted that the government is going to move away from using software supplied by a “small oligopoly of IT suppliers” to create a more open market.

In line with this, following a consultation, today the Cabinet Office has published recommended standards for departments to use for viewing government documents and sharing documents. The standards include HTML, Open Document Format for Office Applications and PDFs.

“I want to see a greater range of software used, so civil servants have access to the information they need and can get their work done without having to buy a particular brand of software. In the first instance, this will help departments to do something as simple as share documents with each other more easily. But it will also make it easier for the public to use and share government information,” said Maude.

“It’s not about banning any one product or imposing an arbitrary list of standards. Our plan is, as you would expect, about going back to the user needs, setting down our preferences and making sure we choose the software that meets our requirements best.

“Technical standards for document formats may not sound like the first shot in a revolution. But be in no doubt: the adoption of compulsory standards in government threatens to break open Whitehall's lock-in to proprietary formats. In turn we will open the door for a host of other software providers.”

He added: “So a combination of open standards and a fairer procurement process can be a winning combination for Britain’s small businesses.”

In other news, the government also today gave a public demonstration of a number of new digital services that will be available to the public, including a new system to register to vote online, which will be in use from June.

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