Printers slam PM's plan to boost public sector contracts to SMEs

Printers have dismissed a government proposal to push 25% of public sector procurement to SMEs as ineffectual and irrelevant for the print industry.

While the government decision to support small companies was seen as a positive move, printers criticised the lack of targeted support for micro businesses.

The government definition of an SME includes any company with fewer than 250 staff and as such encompasses the vast majority of the print industry.

Bryn Oakley, partner at Astra Printing Group, said: "They should introduce a new category in the UK like they do in Africa where MSME is used for micro, small and medium-sized enterprises.

"Companies with fewer than 10 employees are classed as micro, those with fewer than 50 employees as small, and those with fewer than 250 as medium-sized.

"But then if you still include the medium category, that includes about 75% of the printers out there anyway, so still probably covers most of those currently doing the work.

"If they said at least 25% would go to micro and small categories, then that would really mean something."

Mark Snee, managing director at Technoprint, added: "I can’t see what impact this initiative will have on the printing industry, it’s not as if Polestar or St Ives are outbidding SMEs for short-run local print work."

Snee argued that public frameworks for aggregated print work were anti-competitive and "potentially open to corruption" and suggested that all public sector organisations should be required to publish their supplier invoices online within one month of receipt.

The backlash came after the government announced a raft of plans intended to boost small business growth, including the appointment of a new enterprise tsar in Lord Young of Graffham.

The Prime Minister David Cameron said: "I feel very strongly about the need to do everything we can to help and promote small and medium-sized businesses. They provide nearly 60% of our jobs and half of our GDP.

"This government has already taken action to back small businesses. But there is so much more that we need to do to back up our commitment to make this country one of the best in the world to start, run and grow a small business."

Lord Young’s first task will be to write a "brutally honest" report on what the government can do to help smaller enterprises and start-ups prosper, including cutting red tape.

In addition to its support plans for SMEs, the government announced its plans to improve access to finance for businesses, including a £2bn extension of the Enterprise Finance Guarantee (EFG) scheme for four more years.

BPIF corporate affairs director Andy Brown said that while the extension was good news "in principle", the success of the EFG in terms of boosting lending to SME printers remained questionable.

"A lot of companies have been unable to access finance through the EFG because the bank has still asked them for things like personal guarantees or has applied onerous terms to the loan," he said.

"I think, when the government talks about helping SMEs they need to start thinking a lot smaller. Secondly, they need to form a definitive action plan, because all we’ve got at the moment is rhetoric."

Brown added that the government should do "everything in its power" to foster the creation of alternative finance markets that will be of benefit to micro businesses whose only recourse currently is the high street.