Small Software Association raises doubts about government SME initiative
24 July 2014, by Amy Wood
In 2011 the government launched a new initiative to allocate 25% of procurement spending to SMEs. This move was made in recognition of the impact which SMEs (Small and Medium sized Enterprises) have within the UK economy. Figures from 2013 suggest that SMEs make up 99% of the 4.9million businesses in the UK, providing 14.4 million jobs – an equivalent to 59.3% of private sector employment.
When the coalition entered power in 2010 just 6.5% of government spending was going to these businesses. In a strong move aimed at raising the amount of business awarded to SMEs they set about making changes to the procurement process, to make government contracts more accessible to these smaller companies. The end result, they hope, will be one of raising expenditure on SMEs to 25% by 2015.
One sector which has seen a specific rise in government attention has been that of software and development. In 2013 the government raised its initial 25% spending target for SMEs in this sector to 50% by year end 2015. As hopeful as this may seem, doubts have been raised about the government’s capacity to reach such an ambitious target. Zoe Cunningham, Managing Director of Softwire, doesn’t believe that this target is realistic. ‘The government is not backing up the 25 percent target with engagement with SMEs. We haven’t seen much progress with it and they are being very overambitious with the 50 percent target’, said Cunningham at a meeting of 20 SMEs with the Shadow minister in May, adding that ‘SMEs are being put off bidding for government work, and they are not being listened to. It’s still much easier for us to work with private businesses than government.’
Zoe is an active and vocal member of the technology community in the UK and her concern about the hope of success for the new 50% spending target led her to found the Small Software Association. At present the association represents 60 of the UK’s smaller software companies, and they’re campaigning to get the government to truly achieve its SME quotas in the sector. One of the key issues Zoe believes that SMEs face in this scenario is the government sub-contracting to small companies though larger IT suppliers. She claims that ‘small company spend is going to 500-employee companies and large outsourcers, who promise to flow the work down, but don’t deliver.’ The association is launching its campaign in Bristol on 29th July with a meeting between representatives from local software companies. Their hopes are to promote software best practice within UK SMEs and raise awareness of the issues they face when applying for government tenders.