UK’s slower tendering process could be starving SMEs of up to £734m a year in cash flow

Good cash flow is crucial to the success of any business, which is why a lack of cash flow regularly tops the list of SME concerns.

Now research has revealed that SMEs are receiving a blow to their bid to keep their cash flow on track that equates to hundreds of millions each year.


An analysis of EU procurement data by Spend Network, a start-up at the Open Data Institute (ODI), found that the UK is lagging behind some of its counterparts in the EU when it comes to the speed of its tendering process.


The fact that the UK government takes a 53 longer days to complete an EU compliant tender, when compared to the EU average in 2013, translates to stalled funds for SMEs that could total as much as £734m a year.


According to the analysis, the UK public sector currently ranks in third place when it comes to the slowest EU country for completing tenders, meaning that UK SMEs may face a cash flow gap as they wait for the government to award contracts.


Commenting on the analysis findings, Ian Makgill, managing director of Spend Network, said:


"Delays such as this not only create an unnecessarily challenging environment for SMEs, but also dissuade SMEs from engaging with government in the first place.


"Having to wait nine months to know if you've won a contract is really only feasible for larger companies, SMEs simply can't operate with a nine month delay on cash flow."


Gavin Starks, CEO of the Open Data Institute, which describes itself as an independent, non-profit, non-partisan company, emphasised the important role that data had to play in an “open economy”.


"Access to data such at this is critical to an open economy. We applaud the steps that the European Union has already taken to open up datasets but there is more that they can do.


"Too many EU datasets, including the data that this research is based on, is still not provided in a truly open and useful manner. Doing so would enable us all to understand what the causes and solutions may be to help grow our SME economy."


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