Small firms get £200m in deals for innovation

 
Ben Southwood
Follow Ben
SMALL firms are set to get five times as much from government contracts in 2014-15 than they did this year, the chancellor announced in his Budget yesterday.

In the midst of a Budget with a raft of measures designed to boost small firms, the decision to boost the small business research initiative (SBRI) to £200m – or 0.5 per cent of government procurement budgets – was hailed as “gold dust”.

“There is a treasure for small businesses tucked inside an otherwise austere budget,” said Stian Westlake at Nesta. “It works by giving small businesses the chance to compete to solve tricky government problems.”

“The winners get contracts – for a start-up these are gold dust, since they provide both cash and a customer,” Westlake added.

The budget will expand from £40m in 2012-13 to £100m in the following year, finally rising to £200m from the 2014-15 tax year.

The chancellor also handed small firms £30m worth of growth vouchers which can be used to access advice to help them expand.

Along with this, George Osborne pledged £140m over two years from April 2013 to support small firms that export abroad and to attract more overseas investment.

And the government plans to set up a small business credit database to ease access to firm data for credit providers, in order to boost lending.

Business bodies also hailed the government’s decision to only consider current and future compliance with tax avoidance policy – rather than the 10 years of past conduct as initially suggested – when considering procurement bids.

“The changes bring much greater clarity and mean suppliers should be able to get on with their business of proposing for contracts while the government can ensure companies do play by the tax rules,” said KPMG tax czar Chris Morgan.