Government procurement rule worries small IT suppliers

Denham: More IT training

A government initiative that requires IT suppliers bidding for public sector contracts to have robust training regimes in place could exclude small firms from winning business, according to experts.

Skills secretary John Denham announced last week that all IT firms will be expected to train employees to a certain level before winning government contracts as part of a drive to bridge the IT skills gap in the UK.

But Peter Scargill, IT chairman at the Federation of Small Businesses, said the move would be another blow to small suppliers already struggling in the recession.

“This is ridiculously short sighted. There is a recession going on and the government is just making it harder for small businesses that need its support at this difficult time,” he said.

“This shows any previous commitments to helping small business win government contracts are just lip service.”

The government has made a number of announcements over the past few years to try to open up contracts to smaller firms, but Scargill said the deals are still dominated by the big players.

A senior figure at one major government IT supplier agreed that last week’s announcement will favour bigger firms.

“Those who can tick the boxes on this initiative will be the bigger companies. The government needs to be careful it is not erecting higher barriers to entry,” said the source.

“We will be able to ride out the recession without cutting training, but smaller suppliers won’t.”

The government spends £14bn a year procuring IT services and the latest move is designed to make sure that money helps to improve the skills base of the IT workforce.

Last week, Denham met government chief information officer John Suffolk and leading IT firms including Logica, Cable & Wireless, EDS, IBM and Atos Origin, Fujitsu and Accenture to discuss the initiative. There were no representatives of smaller IT firms at the meeting.