According to the Forum for Private Business news that the government will implement ‘radical reform’ to the public procurement system is good news.

Ministers say the changes will make the process less legalistic and it should be easier for SMEs to access lucrative state-funded contracts, worth in the region of £230 billion a year.

Changes recently announced by cabinet minister Francis Maude include the publication of £50 billion in contracts via a new website and improved collaboration with businesses at a much earlier stage in the procurement process. The government is also pledging to make it 40% faster for firms to do business with Whitehall, reducing all but the most complex procurement processes to a maximum of 120 days – a reduction of 80 – from January 2012.

“With a budget of around £230 billion a year, the state remains the single biggest source of work for UK business,” said the Forum’s Chief Executive, Phil Orford.

“Encouraging smaller firms to compete for access to Government contracts is something we have long campaigned for, and, if successful, should provide a vital source of new income for smaller firms in to the future as the UK economy grows,” he said. “This should also encourage and hopefully speed up economic recovery next year. Competing for public procurement contracts has traditionally been a complicated, time-consuming process, making it an unattractive, remote prospect for small business. Any reform which simplifies the procurement process, demands fewer man hours and less financial outlay is clearly welcome.”

The Forum added that it hopes that if government increases the number of small business on their books they prioritise the need to pay promptly. Big business may well be able to absorb late payments weeks past the invoice date, in some cases months, but for small business it can be a terminal blow.