As the local election results come in, it’s worth remembering what councils actually do once the campaigning stops: they spend money — a lot of it on technology, and a chunk of that through G-Cloud, the framework designed to give innovative British suppliers a clearer route into the public sector. That is the theory. The practice looks rather different.
Just this week, and not for the first time, I heard from the founder of a genuinely innovative British technology company that has been blocked from the next iteration of G-Cloud. The reason was not poor delivery, a weak product or lack of relevance to public-sector buyers. It was negative EBITDA and a lightly capitalised balance sheet, both of which are completely normal for growth-stage tech companies.
It goes without saying that the government should not be cavalier about supplier risk. But there is a difference between a company that is structurally insolvent and one that is investing in product, people and expansion. There is a difference between a supplier whose failure would bring down a critical public service and one offering a substitutable software or data product. This is precisely the kind of domestic scaleup ministers claim to want in the public-sector supply chain.
This ‘computer says no’ approach needs to be replaced with something smarter. If procurement rules cannot distinguish between those cases, they will select for the wrong things: incumbency, corporate backing and the ability to satisfy a bureaucratic risk model. They will not select for innovation, and competition will suffer.
This matters because public procurement is one of the largest levers government has. If the state wants more British scaleups, it needs to be a better customer to them. If it wants more competition in public services, it cannot design frameworks that only large incumbents can comfortably navigate. If it wants domestic technology companies to grow, it should not tolerate blunt financial tests that keep them out of public-sector markets.
Get in touch if you have experienced similar issues with procurement frameworks, financial viability assessments or public-sector buying processes. If there is enough feedback, we’ll launch an evidence session through the All-Party Parliamentary Group for Entrepreneurship.
Three of a Kind
A final call for applications for our JVF Female Founder Ambition Series, run in partnership with the Jessica Vollman Foundation.
The series brings together ambitious female founders for three small virtual roundtables. The first session, High Potential, takes place 20 May, 5pm–6pm, for earlier-stage founders with early traction who are working out how to scale. The second, High Growth, takes place 27 May, 5pm–6pm, for founders already growing quickly and navigating the pressures of expansion. The third, Going Transatlantic, takes place 3 June, 5pm–6pm, for founders operating, or seriously planning to operate, in both the UK and the US.
Insights from the series will feed into a briefing paper shared with our network and media contacts. We’ll also be undertaking interviews with some founders for Network Effects.
Crowning Achievement
Recipients of The King’s Awards for Enterprise have been announced. Congratulations to all the entrepreneurs in our network who received the award. You can already apply for the next round here. As mentioned here previously, there is a new Young Founder category that will spotlight founders aged 18–30 who are actively leading their businesses and building success with impact.