EU Reforms To Make Life Easier For UK SMEs?

UK Government Believes EU Procurement Directives Will Benefit SMEs

20.01.2014

Steven Beahan, Partner | +44 (0)114 294 7868

New procurement directives introduced by the EU could have a positive impact on small and medium enterprises (SMEs) in the UK.

The UK government had lobbied for changes at European level that could make it easier for smaller businesses to gain access to public contracts.

Minister for the Cabinet Office Francis Maude believes the reforms should help to reduce red tape and provide support to mutuals.

He said the directives include "several wins" for the UK government.

"EU rules used to make it hard for government to exclude suppliers with a poor performance record and so it's good news that the changes will make it easier for us to manage contracts effectively," he commented.

"We will seek to transpose these rules into UK law quickly as the regulations will help British companies win business in other European countries."

The government managed to save £3.8 billion of taxpayers' money in 2013 by making several procurement and commercial reforms.

In the past, large corporations held the monopoly over lucrative public sector contracts, but the authorities are increasingly keen to work with a greater number of SMEs.

The government is aiming to ensure 25 per cent of all public spend is with SMEs by 2015.

These new regulations will encourage buyers to break large contracts into smaller deals. By simplifying the bidding process, the European Commission estimates that SMEs could cut application costs by up to 60 per cent.

Much has been made about the impact that European regulations are having on British companies, particularly startup organisations.

A referendum on the UK's EU membership is planned for 2017, but recent reports have suggested that many businesses are against withdrawal.

According to EEF - the manufacturers' association - more than 85 per cent of manufacturers believe it is in their interest for Britain to remain part of the union. Around three-quarters of firms stated that losing access to European funding programmes would be the biggest blow if the UK was to go it alone.

Expert Opinion
Small businesses are commonly viewed as key to driving improvements in the economy, but in order to reach their potential in this regard, they themselves need the right support.

"Therefore it is welcome to see that these reforms, widely viewed as being beneficial for SMEs, have come into force.

"However, we would urge small businesses to not get ahead of themselves and ensure that they are in the best possible position to take advantage of any opportunities which arise from these reforms.

"In order to do this, they will need to have the right support network in place, which includes access to specialist legal advice and support on matters from employment law to data protection."
Steven Beahan, Partner