The government has recently announced a raft of plans to increase fair competition in certain markets for small businesses and reduce the regulatory burden.
Among the ideas outlined in a published document were plans to launch a new 'Crown Marketplace' to build on the Digital Marketplace procurement process and make it easier for small to medium sized businesses to supply the government with goods and services.
'The concrete steps set out in this document will mean key markets deliver choice and quality at lower prices. And they will ensure government, regulators and local authorities all play their part in promoting competition and removing market distortions," according to the document.
UK productivity is on the government's radar this year, and to have fair, open and competitive markets it says businesses must be able to enter markets and innovate.
The key plans it set out in the document for small businesses are:
'Regulators will develop new approaches to support innovation and the safe testing of new products and services, which will form part of regulators' Innovation Plans at Budget 2016. This will build on regulatory sandboxes, which the FCA is opening to proposals from firms in spring 2016; and innovation spaces,' the document read.
It adds that unnecessary regulations and enforcement practices that cost businesses time and money need to be stripped back or removed, 'and where regulation does exist, it should help rather than hinder business.'
The government added it wants to ensure that regulators adopt a proportionate approach to compliance, in particular for new, start-up businesses.
Building on international best practice, the government will ensure that the statutory guidance on the Growth Duty is clear that, where appropriate, regulators should follow the principle that enforcement action is a last resort and regulators should help first.
'We hope that this move to establish a Crown Marketplace stimulates spend with small to medium sized businesses and greater adoption by procurement teams, particularly in local government, who we find are still struggling to understand how to use the framework and how to sustain their strategic technology investments over the longer term.'
However, managing director of the Forum of Private Business Ian Cass welcomes the system, saying its simplification will be 'key'.
'The new Crown Marketplace system must make it easier for businesses to find and apply for government tenders and projects. Previous online systems have been fragmentary, inconsistently filed and overly complex meaning that potentially ideal suppliers have been put off as the whole system is too time consuming.
"Simplification will be the key to success with this system, although it is worth remembering that there are some really good tradesman out there who do not have online access and many rural areas where broadband is not fast or reliable enough for this sort of work,' he added.
Among the ideas outlined in a published document were plans to launch a new 'Crown Marketplace' to build on the Digital Marketplace procurement process and make it easier for small to medium sized businesses to supply the government with goods and services.
'The concrete steps set out in this document will mean key markets deliver choice and quality at lower prices. And they will ensure government, regulators and local authorities all play their part in promoting competition and removing market distortions," according to the document.
UK productivity is on the government's radar this year, and to have fair, open and competitive markets it says businesses must be able to enter markets and innovate.
The key plans it set out in the document for small businesses are:
- Access to finance: Maintaining the British Business Bank so it can facilitate at least £10bn of finance. It is already lending £2.4 billion of finance to 40,000 smaller businesses. The Business Bank will also retain the £400m of additional funding for Enterprise Capital Funds that was announced at Autumn Statement 2014 within its long-term funding envelope
- A new 'Crown Marketplace': This will be created to make it easier for businesses to supply the government with goods and services. Central government procurement spend is around £44bn a year. The government will also develop market feedback systems on the Digital Marketplace sales information
- The Competition and Markets Authority (CMA) report: The CMA will examine how local authorities - including cities with newly devolved powers - can support competition and challenge them when they don't, with the first report in 2017
- Small business consumer rights: Regulators in the energy and water markets will give the smallest businesses consumer-style rights, for example, protecting them from mis-selling, ensuring more transparent prices and making switching easier. Small businesses therefore don't have the same rights as household consumers, and this can mean they do not get the best deals from the market. The government will therefore ensure greater focus on the needs of small businesses through the Policy Statements it gives to Ofgem and Ofwat, which give guidance on their policy priorities
- Innovate UK funding: A new package of loans for innovative companies will be introduced, reaching £165m by 2019-20. The government will also increase catapult funding in real terms
- UK Trade and Investment: This will be refocused so that it ensures UK firms are able to access international markets. This will involve enhancing direct support to business and developing the private sector market, supported by £175m total reinvestment over the next four years
- Contracts Finder service: This will be extended to the sub-contracting market in 2016, offering wider access to procurement opportunities
- GREATbusiness.gov.uk: The advice will be improved so that businesses are better equipped to win more contracts down the supply chain, and can build their capability to win work in export markets
- Local procurement: The government will also tackle procurement at the local level. Local government spends around £45bn a year on goods and services.However, small businesses say the current systems to access these contracts are bureaucratic and costly. The government will launch a pilot, based on the principles of Primary Authority, to explore how local authorities can reduce these burdens and make it easier and cheaper for small businesses to supply to them.
Regulation and compliance
The red tape burden on small businesses, particularly where businesses are hindered by regulators rather than encouraged, is one thing the government is aiming to tackle, backed up by its Enterprise Bill, published earlier this year which aims to cut a 'further' £10bn of red tape.'Regulators will develop new approaches to support innovation and the safe testing of new products and services, which will form part of regulators' Innovation Plans at Budget 2016. This will build on regulatory sandboxes, which the FCA is opening to proposals from firms in spring 2016; and innovation spaces,' the document read.
It adds that unnecessary regulations and enforcement practices that cost businesses time and money need to be stripped back or removed, 'and where regulation does exist, it should help rather than hinder business.'
The government added it wants to ensure that regulators adopt a proportionate approach to compliance, in particular for new, start-up businesses.
Building on international best practice, the government will ensure that the statutory guidance on the Growth Duty is clear that, where appropriate, regulators should follow the principle that enforcement action is a last resort and regulators should help first.
Small business' comment
Jadu, web experience management software provider, which has in recent years seen a large percentage of its new business sales come through the UK government's Digital Marketplace, welcomed the news. Its CEO Suraj Kika said: 'The actual percentage of government spending through the Digital Marketplace is very small. So while the government says the Crown Marketplace will provide procurement spend of a headline-grabbing £44bn, the reality is that - like the Digital Marketplace - only a small part of that is likely to make it to small to medium sized businesses.'We hope that this move to establish a Crown Marketplace stimulates spend with small to medium sized businesses and greater adoption by procurement teams, particularly in local government, who we find are still struggling to understand how to use the framework and how to sustain their strategic technology investments over the longer term.'
However, managing director of the Forum of Private Business Ian Cass welcomes the system, saying its simplification will be 'key'.
'The new Crown Marketplace system must make it easier for businesses to find and apply for government tenders and projects. Previous online systems have been fragmentary, inconsistently filed and overly complex meaning that potentially ideal suppliers have been put off as the whole system is too time consuming.
"Simplification will be the key to success with this system, although it is worth remembering that there are some really good tradesman out there who do not have online access and many rural areas where broadband is not fast or reliable enough for this sort of work,' he added.
