The Forum of Private Business (FPB) has called on the government to lift barriers preventing smaller businesses competing for contracts from public authorities.
Its argument has been strengthened by a report on public procurement from the Commons Trade and Industry Select Committee that said smaller firms were hampered by the complex and costly tendering process.
FPB campaigns manager Matt Hardman said that while the principles of the government’s procurement policy were clear, its practical implementation was "a huge problem and smaller firms, which could often provide authorities with the best value for money, are excluded from the tendering process".
The FPB provided evidence to the committee of MPs, supported by case studies from a selection of the 25,000 small and medium-sized firms it represents. It urged the government to ensure contracts are awarded according to the principle of best value for money.
One FPB member commented: "Public procurement bodies tend to put out contracts to consultants who charge fees of between £250 and £600 just to add your name to their database, with absolutely no guarantees of any work."
Hardman said public authorities tend to "bundle tenders together for convenience when they could get better value for money by breaking them up and putting them out to tender individually".
Separately, the FPB has called on the government to cut or remove business rates on around 150,000 small businesses.