The Prime Minister and Deputy Prime Minister’s recent open letter to Cabinet colleagues was probably an unnecessary reminder to most civil servants of the importance of spending cuts in tackling the budget deficit.  Those attending Civil Service Live in July certainly had the need for economies at the forefront of their minds, with much of the talk being of current restrictions on procurement and the forthcoming Spending Review in the autumn.

A gloomy context for those, like us at Guiding Coalition, who were exhibiting at the conference, you might think.  But it ain’t necessarily so.  In this challenging environment, where both value for money and creative responses are paramount, smaller companies have a unique contribution to make.  It was good to hear the Prime Minister himself endorse this view in response to a question after his speech at Civil Service Live.  Referring to his time in a media and TV company, he said “you always knew you would never be criticised too much by your line manager for awarding the contract to the safe big operator.  But it also meant you weren’t necessarily getting value for money, you weren’t getting the creativity, you weren’t getting the enterprise…we have to have a culture within the Civil Service… of trying to nurture the small, the entrepreneurial, the interesting and the different”.

While the Prime Minister was speaking more generally, his remarks were certainly relevant to government’s requirements in relation to learning and development.  Some of the key advantages which SMEs can offer in this area are:

- low overheads;

- responsiveness and flexibility;

- often very high levels of experience and expertise;

- a willingness to take on small, one-off contracts which may suit departments better at present; and also

- an ability to work together in partnership to deliver on larger contracts.

Certain conditions are however necessary for government to make successful use of what SMEs have to offer.  Even where departments are combining in central procurement exercises, they must not restrict themselves to one or two large suppliers, but follow best value for money wherever it takes them.  It’s interesting that Peter Smith of Procurement Excellence should have included this point in his advice to John Collington on his appointment as Head of Procurement: “Don’t assume that aggregation of demand should lead to aggregation of supply. Mega contracts with mega suppliers is not always the best answer”, he said in his blog.

Tendering procedures should be proportionate and should not discriminate against SMEs.  Remember that the costs of over-elaborate tendering procedures are eventually carried by the client.  And avoid getting tied up in over-long contracts which may not offer best value for money when circumstances change.

Most importantly, procurement of learning and development is too important to be left to procurement specialists!  The internal customer must always take a lead.