The collapse of Carillion sent ripples through the UK’s economic landscape, highlighting the dangers of overreliance on large corporations.
To prevent a recurrence, the government is turning to small and medium-sized enterprises (SMEs) for their agility and innovation. By nurturing these smaller entities, the government aims to create a more resilient and diverse supply chain.
The Role of SMEs in Government Contracts
A Cabinet Office minister has emphasised the importance of engaging small tech companies to avert another situation like the Carillion debacle. The government has been criticised for awarding massive contracts to Carillion despite profit warnings, yet it is now pivoting towards SMEs for government work.
These small enterprises bring adaptability and diversity, reducing dependence on a limited number of large suppliers. By awarding contracts to agile SMEs, the government intends to allocate one in three pounds to smaller firms by 2022.
The Vision of Oliver Dowden
Oliver Dowden, responsible for SMEs and the Government Digital Service, stressed this shift is not solely due to Carillion’s collapse. He highlighted that SMEs have consistently been a long-term priority.
Dowden pointed out that SMEs can inject innovation into government functions, positioning the UK as a leader in technology. The smaller scale and flexibility of these firms allow them to be at the cutting edge of tech developments.
Digital Advancement in Government
The government has not just embraced digital interfaces but seeks end-to-end digitisation. Dowden is advocating for a government that is digital beyond mere front-end interactions.
The creation of the ‘GovTech Catalyst’ accelerates this digital transformation, targeting public-sector challenges like traffic congestion and healthcare efficiency. This initiative underscores the role of tech firms in modernising public services.
Investment from a £20 million fund into these tech firms is imminent, further cementing the collaboration between government and SMEs. Such partnerships harness innovation directly from smaller tech companies, fostering a nimble and efficient public sector.
Mutual Benefits of Collaborating with SMEs
Dowden is actively encouraging major government suppliers to integrate SMEs into their supply chains. By doing so, both the government and its suppliers can benefit from the flexibility SMEs offer.
These collaborations not only enhance governmental processes but also present growth opportunities for SMEs. This symbiotic relationship is vital for fostering innovation and competitiveness across sectors.
Encouraging Direct Collaboration
Government teams are now working alongside start-ups more than ever, encouraging a culture of innovation and collaboration.
By partnering with agile start-ups, the government can access fresh ideas and cutting-edge technologies. This synergy is crucial in driving forward public service improvements and efficiency.
Such collaborations signify a paradigm shift in how government operations can be enhanced by leveraging the strengths of nimble, tech-savvy SMEs.
Resilience Through Diversity
Embracing SMEs allows for a diverse and resilient supply chain. This diversity is essential to withstand market shocks like the Carillion collapse.
With a broader range of suppliers, the government is less vulnerable to the failures of any single entity. SMEs, with their innovative capabilities, are central to building this robust framework.
A Future-Oriented Approach
The incorporation of SMEs into government contracts is a forward-thinking strategy that promises to fortify national infrastructure.
The integration of agile tech SMEs into government contracts is a pivotal step towards a more resilient UK economy.
This approach not only mitigates the risk of future corporate failures like Carillion but also propels governmental efficiency and innovation.