ODI start-up reveals UK businesses starved of £22 billion in cash flow

ODI start-up, Spend Network has revealed that up to £22 billion of government cash, intended for the UK economy, is being delayed by an inefficient tendering system. The company’s analysis of over £1 trillion of EU procurement data shows that UK’s tendering process is 45 percent slower than the EU average, and that up to £734 million of the stalled funds could be delayed to UK SMEs each year.

Spend Network is one of the companies on the ODI’s start-up programme, in its analysis of tender processes across Europe, the company found that the UK public sector is third slowest in the EU for completing tenders, behind only Greece and Ireland. UK Government took 45 percent (53 days) longer than the EU average to complete an EU compliant tender in 2013.

In particular, Spend Network estimates that a delay of 53 days starves the UK’s SMEs of £734 million of cash flow each year as they wait for the Government to award contracts.

Ian Makgill, Managing Director of Spend Network says 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, Open Data Institute says 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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