Bad news for small firms

17 August 2008

SMALL firms in London could see a cut in their slice of business from the 2012 Olympics as a result of government proposals.

Although many are winning their fair share of contracts for the 2012 Olympic Games a target to award them 30 per cent of all public contracts could be affected by recent government proposals. The Forum of Private Business is concerned at plans to force business-owners to report on gender and racial equality, and also offer trade union membership to their employees, in order to be eligible to tender for work.

The FPB, which represents 25,000 small businesses across the UK, is encouraged by the announcement from the London 2012 Olympic Delivery Authority (ODA) that over 70 per cent of contracts have been procured by small firms. The Forum is calling on the Government to use the 2012 Games as a springboard to improving the public procurement tendering process for small businesses throughout the UK.

Matt Goodman, the Forum's Policy Representative, said the Government was in danger of confusing the issue.

"In the 2008 Budget, the Government said that it wants to encourage small firms to take up 30% of public contracts, but then in the next breath it announced controversial proposals which would force companies into promoting trade union membership as a pre-condition of bidding," he said. "What is really needed is an improved framework and better support for small firms that do tender for public contracts. Currently, there are so many reasons small firms are discouraged from tendering.