Government doing less IT business with SMEs

It seems that despite the promises the government made to end the oligopoly of big business as far as IT is concerned, they are still ignoring the SME’s. The government in the UK is doing less business with SME’s, small and medium sized enterprises, that is was just a few months ago, despite the promises that Francis Maude the cabinet minister made earlier this year.

A the first meeting of the working group known as the ‘New Suppliers to Government’, which the Cabinet Office put together, the members clearly highlighted that the aspirations of the government to place 25% of all its business with SME’s was in direct conflict with such projects as the Efficiency Review by Sir Philip Green, which is pushing for consolidation within the chain of supply.

Mark Taylor, who is the CEO of Surius as well as being the lead for the ‘New Suppliers to Government’ work group said that there were two competing factions within the government. One is the stated commitment by the Cabinet Office to get more involvement with SME’s, but the other tension within the government is pushing a different direction.

The Efficiency Review, which was published in October 2010, stated that the government would be able reduce its spending by taking such measures as squeezing its suppliers, becoming a single purchaser and finding consolidation in the supply chain.

Taylor says that the problem with this programme was that the number of people they bought from would be greatly reduced, thus giving smaller amounts of custom to a few large suppliers.

Taylor also added that this can often be an effective way of cutting costs through scaling down economies, it wasn’t appropriate in every sector. As far as IT goes, great innovations are coming from the smaller companies, and these can help the government to reduce expenditure through open source resources and agile technology.