FSB urges Government to improve supply chain procurement for the sake of taxpayers and small businesses


Federation of Small Businesses (FSB) is calling on the Government to accept a raft of public procurement reforms that will promote supply chain best-practice and unlock the potential of the UK’s 5.7 million small businesses.

Data from the latest FSB report, ‘Chain Reaction: Improving the supply chain experience for smaller firms’, shows that 25% of businesses who are in the supply chains for public infrastructure projects experience late payment more than half the time. It also shows that only 12 per cent of smaller businesses in public supply chains say they have been provided with skills support.

FSB is calling for Government to identify opportunities to split up big public procurement contracts, make better use of Dynamic Purchasing Systems and to make sure large government suppliers pay on time.

Responding to the new research, FSB Chairman, Mike Cherry reflected on recent market failures, such as Carillion’s collapse, and how it has highlighted the need to improve supply chain practices.

Mike Cherry, FSB National Chairman, said: “Healthy supply chains are a win-win for businesses and tax payers as they create genuine competition, drive productivity, help close skills gaps and fuel economic growth.

“Carillion’s collapse demonstrated the urgent need for Government embark on a positive reform agenda to increase value for money for tax payers and to minimise the risk of putting too much power in the hands of a few big firms.

“By setting a good example, Government will set down a marker for Chairs and CEOs of the UK’s largest companies so that they take accountability for embracing good supply chain practice.”

Further data does show that around a third (30%) of smaller suppliers that work with Government have received help to innovate, with suppliers reporting that they have received collaboration in design (28%) and mentoring and advice(25%) support.

Mike Cherry said: “Although there is clear room for improvement in Government’s own substantial supply chains, there are also positive examples. This is true particularly in the support that small suppliers are receiving to grow and innovate.

“This is a strong indicator of what good supply chain practice looks like. What we need to see is this good practice translated into other aspects of supply chains like payment terms, standards and business resilience.

“If this is achieved, we will see an improvement in productivity and the overall economic strength of our small businesses, local communities and the wider UK economy.”

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