Roll out the bunting! Put the champagne on ice! Rejoice, for 2024 has been officially named as the “Year of the SME”.

Britain’s small business community could certainly do with some good news. In 2023 more than 25,000 company insolvencies were reported in England and Wales, the worst figures for 30 years. Voluntary liquidations were up almost 10% from 2022, their highest rate since 1960. Meanwhile, small business growth remains stagnant, with the proportion of SMEs expanding their workforce plummeting by 40% between 2021-22.

Any extra support the government can give to the UK’s small businesses should be applauded. But how can the government help if it fails to understand the obstacles that prevent them from winning public sector contracts, which often represent the difference between insolvency and survival? 

Last week saw the announcement of a new Small Business Council that’s meant to give Britain’s businesses ‘a voice at the table’. Fine words; but if the government actually listens to SMEs, they will hear the same complaints we’re hearing: that it’s next to impossible for smaller firms to win (or even to bid for) valuable government contracts because the procurement process is so insanely, unnecessarily complex.

Last month the Campaign for Fair Procurement concluded our first round of research into how Britain’s SMEs experience public procurement. These results form the basis of our first report, to be released in the spring, but we’ll share a taster here. Small and medium-sized enterprises across the UK say the current regulations governing procurement are incredibly restrictive, and in many cases put them off bidding for future contracts ever again.

In fact, a significant proportion say the time and money spent navigating the increasingly complex tendering rules cost more than they’d get if they actually won the contract.

One example of these bizarre, Byzantine rules is the requirement for businesses to show the wider ‘social value’ they will deliver as part of their bids. This being Britain, the burden of demonstrating this ‘value’ falls squarely on SMEs’ shoulders, in the form of page after page of tickbox requirements mandated by the Social Value Act and accompanying Social Value Model.

Only large enterprises or specialist ‘social value consultancies’ have the time and expertise to fulfill these demands, tilting the playing field even further in favour of Big Business and away from SMEs. 

The government could do an incredible amount of good overnight by simplifying the complex, time-consuming, and thoroughly-outdated procurement process by scrapping the Social Value Act. This law has been estimated to cost the taxpayer some £50 billion in the last decade, and has led to precious little ‘social value’ – at least, none that the government has bothered to count. (More than a decade after the Act became law, there is still no statutory body providing oversight or evaluation of ‘socially valuable’ initiatives.)

The one glimmer of hope is that the Small Business Council falls under the remit of Kemi Badenoch, one of the vanishingly few ministers to have shown the courage and tenacity to challenge unaccountable “social justice” lobby groups (one of our few growth industries in recent years). 

Nothing will come of ‘giving SMEs a voice’ if those in power won’t listen to what they say. Our campaign is already listening to Britain’s small businesses, and the answer is clear: procurement is in crisis, and the odds are stacked further and further against the ‘little guy’. 

Small businesses represent 99.9% of all UK companies; they support 27 million jobs and account for £4.5 trillion of annual turnover. They are the engine room of the UK economy: innovative, nimble and competitive; the drivers of growth and employment for the whole country. 

In the Year of the SME, Britain’s small businesses have already spoken. The question is, does the government care enough to hear? If they won’t, it’s up to SMEs, taxpayers, and campaigners like us to make them listen.