Chancellor set to push 30 per cent of public sector contracts through smaller firms

Channel players are reserving judgement about the 2008 Budget, despite a host of SME sweeteners announced by chancellor Alistair Darling.

In his first budget last week, Darling unveiled a government target of pushing 30 per cent of all public sector contracts through smaller contractors over the next five years. He also pledged an extra £60m SME funding through the Small Firms Loan Guarantee Scheme and simplification of SME tax measures.

Darling said: “We will take immediate steps to give firms better access to Government contracts, and to help them with their cashflow.”

He added that there are 13 million SMEs in the UK ­ 750,000 more than in 1997 ­ and the government intends to do more to support them.

Derek Walton, finance director at distributor Magirus, welcomed the changes. “SMEs make up a lot of the UK economy and they were being restricted before with the credit crunch, so it is good for the channel and businesses that could not get funding before,” he said.

However, Shaune Parsons, managing director of reseller ComputerWorld Wales, said: “It all sounds good at face value. It will be interesting to see how the government will actually help.”

Limits are to be put on red-tape from Whitehall and tax simplification measures to allow over 500,000 small businesses to write-off small, unrelieved capital allowances pools.

David O’Keefe, R&D tax relief at market watcher KPMG, said: “It is positive news but the government has set various targets over the years ­ the proof of the pudding will be in the eating.”