Changes could allow SMEs to bid for more public sector work

Small and medium-sized businesses will be able to bid for increasing amounts of public sector work following changes to government procurement rules.

Originally rolled out in 2003, the two-tier procurement code was a disincentive for small businesses to bid for government contracts. This was because the salary and conditions of employees taken on by private firms who then take over public-sector contracts. would be matched to the former public-sector staff.

This code meant that smaller businesses could not deliver services as cost-effectively as they may be able to do otherwise. The abolition of the code will give SMEs more of a competitive edge.

Head of employment at commercial law firm EMW, Jon Taylor, said, “Smaller companies and the voluntary sector in particular, should welcome this change.

“Without the restrictions of the two-tier code, they’ll be able to tender for business more confidently, knowing that they can offer a competitive bid and will have greater control over how they deliver the service in future,” he said.

The flexibility that the abolition of the code brings will ensure increased productivity and an improvement in services – without a price increase.

Taylor added, “Traditionally, flexible working practices were seen as one of the efficiencies that smaller companies could bring to public sector work as they weren’t locked in deals with public sector unions.”