42. The CBI outlined some of the familiar difficulties that smaller businesses find when trying to compete in public service markets. These included poor pre-market engagement for them to understand properly what government requires, costly and bureaucratic processes, and the degree of risk being transferred.[65]
43. The Cabinet Office has controls in place that prevent departments letting contracts over £100 million without central approval. It told us that the amount of business that government does with SMEs has risen by about £1.5 billion, or 20%, since 2010, that it has more than halved the average procurement duration (still close to 100 days), and reformed other processes, for example introducing the 'G-cloud' through which 90% of companies doing business with government are SMEs. But the Cabinet Office acknowledged that there was more to do on encouraging SMEs to enter markets for government business.[66]
44. Recommendation: The Cabinet Office should look at the barriers to SMEs joining markets and develop a plan to address each barrier. Departments should be required to demonstrate that they have considered disaggregated models for each major contract.
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65 BQ 29
66 BQq 125, 131-133, Written submission from Cabinet Office