SME chief questions Crown Marketplace move

Written by Colin Marrs and Suzannah Brecknell on 2 December 2015 in News

A technology SME chief executive has questioned the extent to which a proposed new Crown Marketplace will help small and medium enterprises.

Interest in the idea – which has been under discussion within government for some months - was rekindled yesterday after it was mentioned in an HM Treasury and BIS policy paper on boosting competition, and reducing bills.

The idea would see the creation a new online platform allowing departments to buy common goods and services, building on the model of the Digital Marketplace.

This model will now be extended to include “other goods and services” through the Crown Marketplace, and the government hopes this will allow more businesses to start supplying the public sector.

But chief executive and founder of software SME Jadu, 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 SMEs.”

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He added that the government could find itself again relying on service integrators – which tend to be larger firms - to coordinate the delivery of projects.

“We hope that this move to establish a Crown Marketplace stimulates spend with SMEs 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,” Kika added.

The government paper also says government will “develop market feedback systems on the quality of services provided and the quality of commissioning itself, to signal and drive the growth of the best providers.”

The Digital Marketplace was formally launched last November, although its predecessor CloudStore had been running since 2012. Since 2012 public sector organisations have spent £836m through the platform, almost half of that in the last year. SMEs received 50% of total sales by value  - 60% by volume.

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