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By | Kat Hall 4th July 2016 07:57

Crown Commercial Services is to slap SMEs with price hikes

While also hoping to throw £1 in every £3 spends on procurement at small biz

Government procurement body the Crown Commercial Service is to start hiking up the amount it charges suppliers to sell stuff to the public sector.

CCS already pockets fees from government frameworks – last year taking a cut of £72m from the £15bn total managed spend it facilitated.

However, it will now more heavily rely on businesses rather than departments for funding.

The CCS annual business plan for 2016/17 states: "We will begin to phase-out the current system of charging government departments a managed service fee, instead using supplier levy income to fund our operating costs."

It added: "We will start introducing marginally increased percentage levies."

It intends to increase its money derived from levies by £9m to £58.7m for 2016/17 – with that figure set to rise further as it seeks to scrap departmental fees entirely.

The management charge for the G-Cloud is currently 0.5 per cent.

One small business expressed concern about a hike in the fee. A spokesman for the firm, which did not wish to be identified, said: "The average contract for a monthly invoice through the G-Cloud is around £15,000. So already a £75 charge is going to CCS. Whatever happened to reducing the burden on small businesses?"

The government has promised to increase its spend with SMEs to 33 per cent of its annual £45bn in procurement spending. However, the National Audit Office has cast doubt on its current claims to have met its target of 25 per cent.

CCS has also been criticised for locking out SMEs by overly focusing on aggregation and centralisation – a practice that does not always result in the best deal for taxpayers. ®

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