The Office of Fair Trading is to launch an inquiry into the government's procurement policy after a report found that small firms were being locked out of lucrative public sector contracts
A report published this week by government advisory body the Better Regulation Taskforce has found that £2bn worth of contracts supposedly earmarked for small and medium-sized enterprises were going to larger companies.

The taskforce criticised government departments including the Cabinet Office and the Inland Revenue for failing to advertise contracts, and demanded more transparency in subcontracting opportunities for smaller firms.

The OFT inquiry will also examine framework agreements where the government is permitted to contract directly from a pre-tendered list of suppliers, but will not be focusing on Procure 21, a framework deal for hospital work already in place in the North-west and West Midlands.