Use IT spend to help small tech firms, government urged

The government needs to use its spending power to encourage innovation by small tech companies in the UK.

The public sector must get better at building relationships with small businesses in order to get the best innovation, said Michael Wilkinson, improvement practitioner at the NHS Modernisation Authority.

He said half of IT spending in the UK is by government - and that it should use this financial "muscle" to encourage innovation by the tech industry.

Speaking at the Government UK IT Summit 2005 in London, Wilkinson said government agencies sometimes break large contracts up into smaller pieces in order to let them quickly - but these contracts could also be used to help SMEs take a bigger part in government procurement.

"What you could be doing is using this to stimulate innovation and that's a challenge," he said.

At the moment the government tender process is very difficult for smaller suppliers because it takes up too much time and effort, he added.

The government also needs to develop better relationships between small and large suppliers.

"Big [suppliers] aren't always keen on SMEs which is a shame. I would say that the same is true of people in government - we have a problem enabling SMEs to get access," he added.

David Greensmith, procurement policy manager at the Department for Work and Pensions, said there needs to be protection for smaller suppliers to make sure they don't get bullied when they work with bigger players, for example by being forced to accept poor payment terms. "We must be very careful that the SMEs are looked after by the big players," he said.