Wednesday, 3 November 2010

Is the Government Serious About Supporting Small Business?

I'm not a great fan of the coalition government but it was great to hear David Cameron talking about the role of small business. Personally I have always thought the complaints about red tape were so much hot air but he is spot on when he talks about "the shocking way in which small and medium sized firms are locked out of procurement opportunities by central and local government".

This makes sense. Small businesses can often provider more flexibility, better value and a more local approach.

But does Cameron mean it? Since June the only trend I have seen is to larger contracts aimed at the largest suppliers. I have just written to Cameron to ask if he will reverse the move of the Skills Funding Agency to minimum contract values for apprenticeships. From 2012 they say they will only sign annual contracts of £1 million or more. Clearly they have no wish to work with small business.

Here's my letter. I will post any reply I receive:

David Cameron
Prime Minister
10 Downing Street
3rd November 2010

Dear Mr Cameron

As a small business owner can I say how delighted I was to see your statements this week on supporting small business, especially in giving us a fair chance in government procurement. As a training business that provides extensive services to government, I hugely welcome your proposals.

Let me make you aware of one place where the government has, since June, introduced changes that appear to be designed to prevent a government agency contracting directly with small businesses. I write in the hope that you will be able to stop it

The Skills Funding Agency is introducing new minimum annual contract values for delivery of apprenticeships. Last year Happy Computers, as a small business, had a contract for £170,000 which enables us to deliver excellent training and certification to around 75 apprenticeships. This year a minimum contract value of £250,000 has been introduced. Next year this is to be raised to £500,000 and, we are told, the year after it will become £1 million.

At the moment a small local business may be the best provider to meet the needs of the local community and may only have demand for around 20 apprenticeships. In the future small businesses like this, and like ourselves, will not be allowed to contract directly with the Skills Funding Agency.

Instead small businesses will have to sub-contract through larger training providers. This will introduce an extra layer, mean more non-delivery work and will mean a % top sliced away.

This would only make sense if the government believed the way to improve services was to use only large organisations. It makes no sense for a government committed to small businesses, entrepreneurship and innovation.


Henry Stewart
Chief Executive
Happy Ltd

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