Procurement · 16 September 2016

Small firms hope to win big from Hinkley Point C procurement opportunities

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The new power plant is predicted to create 25,000 jobs through £18bn of funding.

As construction of the Hinkley Point C nuclear power station in Somerset was given the go-ahead on 15 September, the government has been pushed to ensure procurement opportunities for small firms in the region.

The new power plant is predicted to create 25,000 jobs through £18bn of funding from French and Chinese investment.

National chairman at the Federation of Small Businesses (FSB), Mike Cherry, has called on the government to bring small energy and construction firms into the procurement process for Hinkley Point C.

In a statement, Cherry urged the government to go further in delivering appropriate opportunities for contracts as well as effectively monitoring the supply chain of the power plant to support small firms.

“As with all flagship public projects, small firms will want to see a sincere commitment to drive small business-friendly procurement practices,” he said.

Although the project is being funded through investment from China and France, the British government has stressed it will have control over the “critical infrastructure” of the power plant.

Phil Smith, managing director of Business West – a business leadership organisation which operates the Industry Network for Nuclear South West – spoke of the positive impact the power station will have on the local economy.

“This will be a great boost for businesses in the region, whether they are in the nuclear supply chain or not. There will be opportunities to join the industry by winning work on Hinkley Point C, and even businesses that aren’t related will see positive knock-on effects from the increased investment,” he said.

Ken Owen, EDF Energy’s commercial director for the Hinkley project, stated in August this year that the project would build a local supply chain and embrace local firms.

Owen claimed: “Instead of taking the usual route of only approaching national companies we took a decision to help local businesses step up to the challenge of supplying a major construction project.”

This marked a shift in the way that large-scale infrastructure projects handle the procurement process, stressed Owen, with an “innovative” approach resulting in “local companies winning business by matching our demand for safety, quality, value and scale”.

As part of Theresa May’s re-organisation of Whitehall as new prime minister, the Department for Energy and Climate Change (DECC) was merged with the Department for Business, Innovation and Skills (BIS), and is now known as the Department for Business, Energy and Industrial Strategy (BEIS).

The merge represented a shift in the government’s outlook and a new emphasis on energy and industry as central to the UK’s business strategy.

Cherry further suggested that the government’s commitment to energy opened up the door for small business procurement opportunities and investment in the UK generally, and argued that it was now up to the government to invite smaller firms into the supply chain.

He said: “Investment in energy infrastructure is critical for the future power supply of the UK and ensuring the lights stay on for small firms. If nuclear is to form part of the UK’s energy mix, UK small businesses must have opportunities to be part of the supply chain.”

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ABOUT THE EXPERT

Simon Caldwell is a reporter for Business Advice. He has a BA in politics and communications from the University of Liverpool, and previously worked as a content editor in the ecommerce industry.

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