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It鈥檚 a pleasure to be back in front of a small business audience.

Before I got into politics I worked for my family鈥檚 own small business, a software firm near Chester, employing just under 40 people. That鈥檚 why I鈥檓 so passionate about making Britain the best place to start and grow a business.

Now I help run a rather larger business 鈥� the UK Civil Service 鈥� an organisation employing just over 400,000 people.

In 2 weeks time we鈥檒l be setting out our plans for the future of that organisation. Departments will have to deliver ambitious savings without foregoing any ambition as to what government should deliver.

And that requires a new operating system. I鈥檝e said before that instead of seeking to direct, prescribe and control, the modern British state should see its goal as unleashing human ingenuity.

It means being less like British Rail and more like Team GB. It means being smarter, nimbler, more data-driven, more citizen-focused; building services around the needs of users rather than Whitehall鈥檚 terms of use.

And of course, as government delivers for citizens, it spends a huge amount buying goods and services on the taxpayers鈥� behalf: from submarines to software fixes, paperclips to prisons.

Part of my job is to ensure we buy in a way which allows the taxpayer to get the best possible value for money by tapping the extraordinary ingenuity of our smaller firms.

In our manifesto we said a third of the government procurement budget would go towards small and medium-sized enterprises.

I want to tell you why we鈥檝e set it. It鈥檚 because we know that being small forces you to think big, to innovate, to have an edge. And because vigorous competition between a wide range of suppliers is the best way to secure value for money.

So today I want to talk about how we鈥檙e going to deliver on that target. I want to focus on 3 areas. Enhancing our commercial capability, tackling the barriers to entry, and third: the new platform approach to government procurement.

Building commercial capability

First, capability. Right across Whitehall we need civil servants who have the skills, the knowhow and the confidence to deal with smaller firms.

Five years ago we set up the Government Commercial Function, so we can be confident that our people are making good commercial decisions, making the most of suppliers and delivering value for money.

Now the focus is on embedding this behaviour across Whitehall. This includes bringing senior hires with deep commercial expertise and experience into the function, and setting up a new commercial fast stream programme, to recruit civil servants with top-flight commercial skills. The first cohort began training this year.

We鈥檙e also using the Crown Commercial Service to drive forward a diverse marketplace, supporting departments from the centre and challenging where necessary.

Crucially, CCS are also encouraging departments to push boundaries, including innovative new approaches like the sharing economy. The new deal for vehicle hire includes a car share solution for example.

So this is my first point, building our commercial capability. New skills and a new mindset are both essential if we鈥檙e going to grow out of old contracting habits.

Tackling barriers

Next we need to use that enhanced capability to tackle barriers to entry wherever we find them.

And this is my second point. My principle is clear: smaller firms should not be penalised for being small. We shouldn鈥檛 be putting extra hoops and hurdles in your way.

That鈥檚 why we鈥檝e developed the lean procurement process, requiring departments to engage early, with a wide range of suppliers, and to break contracts down into lots where possible.

It鈥檚 why contracting authorities can no longer include a pre-qualification stage in any procurement where the value falls below the EU threshold. And I don鈥檛 want to see unreasonable barriers, like the need for 3 years of accounts, to slip through the pre-qualification questionnaire to the tender itself.

For those procurements above the EU threshold, contracting authorities now have to use a standardised approach, cutting the red tape involved in bidding.

We鈥檙e also determined to tackle late payment.

30-day payment terms are now mandated throughout the supply chain. And to hold feet to the fire, public bodies will have to publish an annual late payment report.

And we know that suppliers themselves are often best placed to identify where we鈥檙e going wrong.

It鈥檚 why we set up Mystery Shopper, a CCS service allowing suppliers to flag up poor practice throughout the public sector. The Mystery Shopper team have investigated nearly 1000 cases since 2011, 80 per cent of which are resolved positively.

I鈥檒l give you an example of their work. In August a small firm got in touch with Mystery Shopper, to say they鈥檇 invoiced a London council in mid-June and hadn鈥檛 yet been paid. Mystery Shopper contacted the procurement team at the council, asking why payment was late and sending a link to the Public Contract Regulations 2015, stressing that they require payment within 30 days.

The result? The council鈥檚 procurement manager immediately put the payment through, reminded the finance team of the importance of prompt payment, and asked for the suppliers鈥� details so his team could sort out any interest due.

So if you find unfair barriers to supplying government, I want to know about it, and I鈥檒l send my Mystery Shoppers in to sort it out.

But paring back bureaucracy is a never-ending battle, and I know as well as you that there鈥檚 still a lot more to do.

Going shopping

This brings me onto my last point, which is about how we use technology to really tackle those barriers at scale.

For the last 5 years we鈥檝e been building digital platforms to make it easier to be a small supplier to government.

When you sell on Amazon, you the seller don鈥檛 have to do the heavy lifting of hosting customer data, or providing a payments service. The platform does it for you.

Platforms are all about maximising the amount of work that doesn鈥檛 have to be done by individuals. It means you can concentrate on what really matters, running and growing your business.

Our Contracts Finder service is an obvious example. The site brings together current and future public sector contracts above 拢10,000 for central government and above 拢25,000 for the wider public sector, as well as information on what contracts are awarded and to what kind of business. It鈥檚 free to use and easily accessible from smartphones and tablets.

Earlier this year we launched a new and improved version. It鈥檚 gained over 14,200 registered suppliers and over 3000 buyers, offering 拢2.1 billion worth of open tender opportunities. Nearly 3 quarters of these have been identified as suitable for small businesses and over a quarter were for less than 拢100,000.

As you鈥檇 expect, platform-based procurement is most advanced in the digital space. Working together, CCS and the Government Digital Service have built the world-beating Digital Marketplace: one easy point of access that essentially allows Whitehall to go online shopping for digital goods and services.

Like all our digital services, it鈥檚 been designed around the needs of the people who use it. We鈥檝e made it easier for suppliers to apply, contracts are written in plain English, and we regularly iterate to make it better.

This approach is working for small businesses.

On the G-cloud framework 鈥� which deals with commoditised digital products 鈥� 50% of contracts by value are going to smaller suppliers. On the new improved Digital Services framework 77% of suppliers are small firms. And the business they鈥檝e won has jumped from 36% to 60% in the last 6 months.

Now I want to extend the lessons of the Digital Marketplace across government procurement, introducing a Crown Marketplace to find innovative suppliers and the savings they unlock, in digital and beyond.

We will tilt power away from established players and towards the upstarts and challengers. Because that is the way of the future.

Conclusion

So improving our capability, tackling the barriers, building platforms: these are all mission critical to delivering for small businesses and so delivering for the taxpayer.

But what I鈥檝e outlined isn鈥檛 just a roadmap, it鈥檚 happening on the ground right now.

In the last Parliament we set a target to award 25% of central government procurement spend to small and medium enterprises.

This was actually achieved in 2013 to 2014 when we hit 26% of overall spend. That鈥檚 10.3% of direct spend and 15.7% of indirect spend.

We鈥檙e now well on our way to hitting our new target of a third.

I know we鈥檒l get there, but I want to end by saying that the most important thing of all can鈥檛 be done by government. Instead, it鈥檚 down to you.

Because ultimately, the best way to win our business is to be the best at what you do. So keep innovating, keep discovering, keep searching for that edge and we鈥檒l back you every step of the way.