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UK local government chief execs not chasing SME business

Derek du Preez | Oct. 17, 2013
This is in contrast to a series of initiatives taking place in central government

A number of local government chief executives and procurement chiefs have said that being an SME won't give you an advantage in winning contracts with councils.

The comments of business leaders at Luton Borough Council and Gloucester City Council contrast to an agenda being driven out of central government to move away from using traditional, large IT suppliers towards SMEs, in a bid to introduce agility and innovation.

The supply of SME business to government is even being investigated by the Office of Fair Trading, which is assessing the state of competition in the sector following concerns about the domination of larger suppliers in the public sector.

The Cabinet Office and the Government Digital Service have introduced a number of frameworks and procurement initiatives to boost the use of SMEs in central government, as well as set an ambitious target of procuring 25 percent of business through smaller enterprises by 2015.

However, speaking at a roundtable event this week in London, hosted by Civica, the council executives told Computerworld UK that SMEs, particularly local SMEs, are important, but this doesn't mean that they are always the right option.

Trevor Holden, Chief Executive of Luton Borough Council, said that whilst keeping procurement spend in the local areas is on the agenda, it conflicts with other quality requirements.

"If you look at most of the procurement strategies in local authorities, they will address the local pound because actually it is really key that you keep the local pound local," said Holden.

"That runs counter intuitive to some of your procurement requirements - take adult social care for example, there is a real friction between value, quality, and national vs. local providers, I don't think it's as straight forward as going for an SME."

Holden said that more useful initiatives outside of procurement could be used to promote the local economy, such as requiring that vendors taking on projects hire local apprentices in order to drive the skills agenda.

His colleague, William Clapp, Head of Procurement & Shared Services at Luton Borough Council, agreed and said that one of the key drivers in picking a vendor to work with comes down to resiliency and assurance.

"From our perspective probably the size of the enterprise is the least of our concerns, the quality and the cost are the front runners. Locality is important to us to drive the local economy - whether the business is small, medium, or large, do we mind really? Not particularly," he said.

"A large enterprise in Luton that can deliver quality and price is the dream solution for us. Small to medium size - bottom of the pile."

Local and small doesn't mean good
Julian Wain, Chief Executive of Gloucester City Council, told Computerworld UK that just because a company is local or an SME, doesn't mean that it is good or right for the job. He said that the most important thing for local government is maintaining relevant quality thresholds.


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