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Francis Maude said G-Cloud has improved competition for SMEs in the public sector, but the OFT doesn't necessarily see it that way

Francis Maude said G-Cloud has improved competition for SMEs in the public sector, but the OFT doesn’t necessarily see it that way

UK Cabinet Office minister Francis Maude told an audience at a public sector procurement tradeshow in London Tuesday that the G-Cloud programme has been successful at opening up the public sector market to SMEs.

Maude said the government’s Digital By Default programme, a leading component of which being the G-Cloud programme, has helped reduce barriers to entry for smaller businesses selling to the public sector.

“We know the best technology and digital ideas often come from small businesses, which is why we’ve created the G-Cloud framework… For both government and the companies listed on the CloudStore, this means less bureaucracy and less hassle,” Maude said.

As of last month the public sector as a whole has already spent more than £175m through G-Cloud, he said.

“And over half of this, 60 per cent, is going to small- and medium-sized firms. Central government is spending is higher still at 63 per cent and we want it to grow even more,” he added.

Maude also said the government has committed another £100m in contracts with small businesses offering IT services and technology to government by 2015.

Public sector spending on cloud services through the government’s Cloud Store hit £155m as of the end of March according to G-Cloud sales data, up from £124.1 the previous month. £123m of the services procured through G-Cloud were bought by central government and £21m the wider public sector, with £9.6m being spent by local governments.

While sales through G-Cloud have bolstered IT services offered by SMEs throughout the public service, a combination of ingrained procurement habits and the domination of few large service providers continues to hamper competition in the public sector IT market according to a recently released report from the UK Office for Fair Trade (OFT).

“There are small numbers of suppliers with high and stable shares of supply for certain types of software, most notably local authority housing, planning and pension administration software and management information systems for schools,” the report said.

“Significant barriers to entry and expansion exist across areas of the sector we looked at. Public sector procurement practices were frequently highlighted as a key barrier.”

The fifth iteration of G-Cloud, which is said to make the application process easier for SMEs,  is set to go live later this month.