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  • Agenda item
  • Agenda item

    11.00am -Roger House, Chairman - Kent and Medway Region, Tim Colman, Director of Partnership Working Limited, Alison Parmar, Development Manager - Kent & Medway Federation of Small Businesses

    Minutes:

    (1)       The Chairman welcomed Mr House, Mr Colman and Mrs Parmar to the meeting and invited them to introduce themselves and outline the role of the Kent and Medway Federation of Small Businesses (KMFSB), before answering questions from Members of the Committee.

     

    (2)       Mr House said the Federation of Small Businesses was the largest organisation representing small businesses with 190,000 members nationally and 6,500 in Kent and Medway.  The Federation had started as a lobby group and had extended its remit to support and represent small business on both national and local issues pertaining to the economy.  In Kent and Medway the FBS was organised into five branches, each with a small committee and team who liaised with national government and district and borough councils.  The KMFBS aimed to be a critical friend and bring forward solutions to problems. 

     

    (3)       Mr Colman said he undertook a voluntary role within the KMFSB and focussed on procurement issues from the national to local level with a view to developing procurement practices that would benefit small and micro businesses.

     

    (4)       Mrs Parmar said she acted as a link between the strategic / national FSB and KMFSB, a facilitator for KMFSB and KCC and between the FSB and small and micro businesses.  This could be through face to face contact, liaison with a range of media and other activities which contributed to ensuring that such businesses had the right knowledge to be successful.

     

    Question – What practical steps could KCC take to get micro and small businesses involved in its work?  What opportunities are being missed by not involving micro and small businesses in its work?

     

    (5)       Micro businesses (businesses with fewer than nine employees) account for between 84%-88% of the economy.  They need an education programme with practical help on tendering and a clear pathway to enable them to bid for contracts with the county council.

     

    (6)       There is not a clear and simple system within KCC for individual teams to advise the corporate communications team of the intention to procure goods or services and consequently there is no single point of contact for businesses interested in tendering for work.  Neither is there a key email point on the website or person who could advise and assist small businesses about forthcoming tenders and the process to be followed to become a contractor with KCC.

     

    Question – Are you aware of the Kent Business Portal?

     

    (7)       Personally yes but it is important that thousands of business know about it and this requires constant messaging and communication. 

     

    Question – What are the main barriers to trading with KCC?

     

    (8)       There are five principal issues.

     

    (a)       There is a lack of transparency in relation to low value contracts which could be of great interest to small businesses.  Contracts with a value of £5,000-£8,000 are not included in the Kent Business Portal.  Contracts of this size can be of considerable interest to small enterprises.

     

    (b)       Micro and small enterprises often lack understanding of the procurement process including an understanding of which contracts they should and should not bid for and the mechanics of completing tender documents.  It would be helpful to advise small business about what is available and what would be good to bid for as well as what not to bid for. Training could be offered at procurement workshops and “meet the buyer” events.  Other local authorities including Hampshire County Council organise such events.

     

    (c)        Contract terms need to be proportionate to the value of the contract.  For example it is not reasonable to require £10m public liability insurance to bid for a contract for small value contracts.

     

    (d)       Contracts should not be aggregated so they are beyond the capacity of small suppliers.  There is a move nationally by enlightened councils to disaggregate some larger contracts.

     

    (e)       Pre-Qualification Questionnaires (PQQs) need to be proportionate to the contract value. Often they are too long and complicated.  Wakefield and Hampshire councils, among others, have agreed on simple, short PQQs that are used for 90% of their contracts - 4 pages and 4 simple questions.

     

    Question – While HS2 might be contentious are they any opportunities for Kent companies?

     

    (9)       Yes.  The original intention of HS2 project managers was to let few large contracts to big players but following lobbying by the FSB there was a change of approach with HS2 directors giving a commitment to contract with small enterprises and to supporting such businesses to form consortia to enable them to bid for and deliver contracts. 

     

    Question – Has the legacy from the Olympics 2012 made it easier for small businesses to win contracts?

     

    (10)     A Freedom of Information request revealed that less than 0.5% of contracts went to small business.  Many of the small businesses that won contracts were, in reality, part of larger companies.  Small businesses won a bigger percentage of contracts at the winter Olympics in Turin and the Olympics in Athens and Sydney.

     

    Question – What is being done to attract young entrepreneurs and how are young businesses supported?

     

    (11)     The FSB has done some work with the Kent Foundation and Young Business Initiative.  Much time is spent talking to young people and young business about employability to ensure they know the support available.  The FSB also supports Young Enterprise financially and provides advisers and competition judges for their events.  Young people need to be supported and developed to take over from those about to retire.  Many micro businesses are teetering on the edge of taking that step and being able to meet KCC contractual processes. 

     

    (12)     The FSB gave an example of a design agency based in Maidstone employing nine people locally but found it easier to access markets in London and therefore most of their contracts were based there.  Such organisations would benefit from easier access to KCC contracts.

     

    Question – What have you done to assist MSEs to interact with the county council?

     

    (13)     About five years ago Mr House worked with Robert Hardy (a deputy KCC director) on a project “Making Micros Matter” which produced good results and demonstrated what could be done however people move on it had not become embedded in the local authority’s strategy.  Such projects also required continuous refreshing and communication.

     

    (14)     Pan-European research showed that as a country emerged from recession 84% of business was generated by SMEs which were more likely to take on new staff, recruit staff locally and therefore have a greater impact on the employment of the young.  KCC needed to support and enable SMEs to employ young people.

     

    (15)     The private business that Roger House operates has bases in three further education colleges and students work to provide solutions to issues set out in real briefs from SMEs and clients and, from such exposure, acquire the ability to form and run businesses.

     

    Question – Commissioning and Procurement are key elements of KCC’s transformation programme.  What can Members do? How can they help?

     

    (16)     There are currently 6,500 businesses in Kent saying it is not easy to do business with KCC.  Using the experiences elsewhere in the country it would be very helpful to bring in good practices such as simplifying PQQs and to reflect those policies at district and borough level.

     

    (17)     It may be worth considering as an innovative move to appoint a lead member at cabinet-level who is responsible for small business interests.  It is about listening, improving and simplifying process.  Kent Works had been created without any prior consultation with businesses but may have had potential to support business if ‘we’ had got together and worked it out. 

     

    (18)     Hampshire County Council and the Isle of White Council have formed a business alliance with FSB, Institute of Directors and the Chambers of Commerce to work with the two local economic partnerships (LEPs)  covering their area.  One works well, one not so well. But this initiative had enhanced the exchange of information, acted as a single source of information and was used by the county council and the LEP to get messages out to 70,000 businesses.

     

    (19)     KMFSB and Chambers need to be represented on Kent LEPs. The FSB expressed concern that at present there are a number of contracts which seem to be awarded to the same companies at the expense of others.

     

    Question - What more could the FSB do for its members? Could FSB underwrite due diligence for small businesses in a framework agreement or facilitate meetings between commissioners and providers?

     

    (20)     FSB is an independent organisation that does not receive public funding and does not operate as a certification or training organisation.  The organisation is however keen to create new programmes, including meet the buyer and training on the procurement process, in conjunction with KCC as this would be welcomed by FSB members.  FSB could host the events with KCC speakers on contracting and procurement - to talk businesses through the bidding process and a sample contract. As important are events which signpost organisations and develop their understanding of what tenders or contracts not to go for.

     

    (21)     The venue is the most expensive element of such events. The ability of local authorities and further education colleges to provide suitable venues was acknowledged as was the desirability of a county wide approach including district and borough councils as well as chambers of commerce in events and programmes.

     

    Question - Is the absence of a track record a barrier to small or new businesses getting their first contract?

     

    (22)     Part of the education process for new businesses is to learn how to work up the ladder.  Small businesses need to start with low value, low risk contracts and the challenge for commissioners is to publicise such contracts.

     

    (23)     KMFSB work with members who have procurement experiences and could offer a training programme. Participation in agreed training events could be part of the approval process which would reinforce confidence of both the contractor and commissioner and reduce perceived risk.

     

    (24)     For start-up organisations the biggest issue is absence of a financial track record. For local authorities it is a matter of mitigating risk and both sides need to build trust.  Offering a bond against productivity / performance; could support small businesses to bid for and successfully deliver a contract.

     

    Question - Is the speed at which KCC pays suppliers causing problems for small businesses?

     

    (25)     There are no issues with KCC payment of invoices.  The picture is mixed among the boroughs and districts.  It would be helpful if KCC required all its tier 1 contractors to pay their sub contractors within the same timeframes it had set for itself. E-invoicing will speed up the payment process, increase transparency and save money.  E-invoicing will become law from 2017 but efforts are being made to bring this forward to 2015.

     

    Question - Final points? 

     

    (26)     KCC internal processes and culture are complicated. Targets need to be bold.

     

     

     

    Supporting documents: