Government fund: Black business must benefit
An innovative governement appoach to supplier diversity for growing and supporting small black businesses is required now writes Ade Sawyerr
When David Cameron, the Prime Minister re-launched the Big Society, he intended for all government initiatives to be effective and to reach all communities; he wanted to remove inept government bureaucracy and ensure that the principles of innovation, diversity and responsiveness were central to government schemes.
This re-echoed his promise made by video to the OBV Black Britain Decides Rally to implement a mentoring scheme targeted at black minority businesses and revisit the whole agenda of supplier diversity.
Two initiatives targeted at small businesses have been proposed by the coalition: the Deputy Prime Minister Nick Clegg is launching a £1 billion Regional Growth Fund to help areas and communities at risk of being particularly affected by public spending cuts and the Business Secretary Vince Cable intends that 25% of all government procurement contracts will be awarded to small and medium sized enterprises.
These initiatives may provide some comfort to business people but within the context of supplier diversity, they fall short of assisting the many black businesses from disadvantaged and marginalised communities who have been denied access to many government initiatives.
Black businesses still face numerous barriers: access to capital and credit, adequate premises in good locations, quality and affordable personnel, and without a track record for the pre-qualification questionnaire, the finance requirements and bonds for some contracts, they do not have access to government contracts.
There remains unwillingness for unbundling contracts into small lots that will not change till the systemic structures are removed and an innovative approach to supplier diversity is implemented.
An innovative approach to supplier diversity must be fair but must not impede competition, the government at all levels must take the lead but it will also need to involve the private sector as well as the small black businesses that must benefit. It must go beyond the training seminars and workshops on how to be bid and can only be effective through a brokerage and mentoring system.
An innovative approach should involve a brokerage service that will put larger private commercial companies together with small minority businesses to bid for contracts; the larger firms with the track record and expertise will lead in bidding and supply the necessary financial bonds.
Other elements of the service should include training to ensure that the contracts are delivered to an acceptable quality, mentoring to transfer some business skills. Facilitation by the banks, whose interests are served by ensuring that their customers are successful, will be essential to the successfully working of this scheme.
Government must be a bolder catalyst for change and should extend the 25% set aside for all government contracts for small businesses to include a 10% set aside for minority black businesses.
This positive action ingredient will be the incentive that will attract big businesses to participate as both suppliers and buyers in the scheme. Above all, it will encourage people from black communities, with low participation rate in business, to release their creativity and entrepreneurial energy to create wealth.
To be effective the programme needs to be well thought through and must have clear objectives and outcomes that are capable of measurement and evaluation. To be efficient, it will need an agency that will look out for contracts that can be unbundled for minority businesses and an organisation with expertise of working for and advocating for small black businesses to be involved.
We trust that this unique and innovative approach to supplier diversity will be another manifestation of the new politics of the coalition, it will ensure that small black businesses can feel empowered to contribute and participate fully in the economy of this country, and it will leave a legacy for equality and diversity that will bind this nation stronger..
Ade Sawyerris partner in the diversity and equality focussed consultancy, Equinox Consulting. He can be contacted at www.equinoxconsulting.net .
You may email him at email@example.com