23 August 2006 | Paul Snell

The government must do more to encourage small businesses to bid for public-sector contracts, according to the Conservative Party.

Shadow Chancellor George Osborne made the comments to the Forum of Private Business (FPB) as he launched a four-point plan to help small businesses.

Osborne said the current procurement process was too complex and "disadvantages small companies and denies them access to the biggest customer in the country".

He also said that too little of the £110 billion government procurement spend currently goes to small and medium-sized enterprises (SMEs) - around £1 in every £5.

He also called for the removal of barriers to small suppliers, including local government's demand to see three years of accounts prior to signing a deal. Osborne added that the "cultural bias" against using small firms must also be tackled.

The government recently established the www.supply2.gov.uk website which gives SMEs improved access to government work. In Wales, the "Opening Doors" project for SME-friendly procurement, launched in June, aims to do the same. However, Osborne questioned why the government wasn't doing more to help. "Why isn't it mandatory that government bodies list all their contracts on the supply2gov website so that small businesses can bid for them?" he asked.

The FPB welcomed the Conservative Party's proposals, but said they did not go far enough to help small businesses win contracts. It suggested following the US model, which commits a certain amount of public contracts to small firms.

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