SMEs are to have easier access to lucrative state-funded contracts, worth around £230bn a year, thanks to new "radical" reforms announced by the government

 

The changes include the publishing of £50bn of potential business online and improved collaboration with businesses at a much earlier stage in the procurement process.

The government will have an "open door" policy with suppliers to discuss future contracts and departments will be encouraged to break up some major contracts to make it easier for small and medium-sized enterprises (SMEs) to bid for the work, said minister Francis Maude, who announced the changes earlier this week.

The intention is to ensure the purchasing power of the government supports growth in the UK market. Small business body the Forum of Private Businesses has welcomed the changes.

With a budget of around £230b a year, the state remains the single biggest source of work for UK business," said the forum's chief executive Phil Orford.

"Encouraging smaller firms to compete for access to Government contracts is something we have long campaigned for, and, if successful, should provide a vital source of new income for smaller firms in to the future as the UK economy grows." He added: "Competing for public procurement contracts has traditionally been a complicated, time-consuming process, making it an unattractive, remote prospect for small business. Any reform which simplifies the procurement process, demands fewer man hours and less financial outlay is clearly welcome."

Further details are expected to be announced in the Growth Review at the end of this month.