The Forum of Private Business (FPB) has welcomed news that the government is due to implement major reform to the public procurement system.

The system is the one through which UK firms do business with the government, although the FPB says the government must ensure it conducts business on the right terms.

The changes to be announced by cabinet minister Francis Maude this week will make it easier for SMEs to access state-funded contracts worth around £230bn a year, reducing all but the most complex procurement processes to a maximum of 120 days – a reduction of 80 – from January.

The FPB chief executive, Phil Orford, says: “The state remains the single biggest source of work for UK business. Any reform which simplifies the procurement process, demands fewer man hours and less financial outlay is clearly welcome.

“The Forum does hope, however, that if government increases the number of small business on their books they prioritise the need to pay promptly. Big business may well be able to absorb late payments weeks past the invoice date, in some cases months, but for small businesses it can be a terminal blow.”

This comes the day after recruiter.co.uk reported the Confederation of British Industry director general John Cridland’s warning that large firms shouldn’t use the tough economic conditions as an excuse to delay paying the recruitment agencies that supply them.