SMEs and the government: It's a race, not a sprint

The government has made headway to better engage SMEs, but scalability remains a barrier for small companies, argues LOC Consulting's Tim Kempster

The government's willingness to embrace the innovation and agility of smaller enterprises, originally came hand in hand with biting austerity measures.

Realising that it could not create a modern government fit for the digital age while also being locked into costly relationships with big vendors, the government decided that something needed to change. To that end initiatives were launched to help small businesses raise concerns about procurement processes and to also bring transparency to what government projects could be bid for.

The runaway success of all the initiatives seeking to better embed SMEs within the walls of Whitehall has unquestionably been G-Cloud. The question is, how can that success be replicated across other products and services?

While G-Cloud is great, it's not applicable to all. How do companies that sit outside the G-Cloud develop the relationships that they need?

The Big Four consultancies, for example, have a virtual stranglehold at the highest level of government decision making. How can SMEs operating in this area find a platform via which they can communicate with this community? This is one of the key points from the TechUK report and it is an important one.

Then of course there is the issue of scalability, because whilst SMEs offer niche quality outcomes they cannot always offer a comprehensive service. Engaging a big provider brings with it the benefit of being able to access, almost on tap, a wide range of disciplines. So how can SMEs break into this space when they are only relatively small in scale?

Perhaps devolution provides a more fruitful route. Osborne has outlined plans to devolve more powers and fiscal responsibility to councils. Yet does this not mean councils are suddenly flush with cash.

Austerity is still the order of the day. Local government has responded to this challenge with a much more enterprising approach to delivering services. Many have used austerity as a platform to be more entrepreneurial in how they procure services. Suffolk and Kent are two such examples of councils that have set themselves up as trading companies, learning to work with different facets of the public sector, in order to ensure citizen value.

Perhaps this creates fertile ground for SMEs to deliver on projects within government, where the scope is more defined and the focus much more on quality outcomes, but with a more affordable price tag than the Big Four?

For the government though, this would not deliver its pledge to procure services based on quality and outcomes, not brand. The issue it faces is one of balance. How do you assemble a number of SMEs to deliver on a big project, whilst not encountering a number of very different management processes that then lead to a situation where a Big Four company needs to be bought in to oversee everything?

There is no easy answer to that question. The government has made headway to better engage SMEs, but scalability remains a barrier for small companies.

It's not insurmountable, but it requires real thought and it is only once this challenge is adequately addressed that the government will achieve its aim of being SME friendly.