Figures published today show an increase in the value of government business being won by small and medium enterprises (SMEs).
Helping smaller suppliers compete for public sector business helps boost economic growth. The Coalition Programme set an aspiration that by the end of the Parliament (2015) 25% of government spend would flow to SMEs, directly and through the supply chain.
In 2009/10, just 6.5% of government spend going to SMEs. High quality data on departmental spend with SMEs was not collected in May 2010 and it has been challenging to obtain accurate information. However, verified figures published today show that direct SME spend increased from £3.2bn (6.8%) in 2010/11 to £4.4bn (10%) in 2011/12.
In addition, new Cabinet Office figures provided by major government suppliers indicate that SMEs have in fact benefitted from a further 6% in indirect spend through the supply chain for 2011/12.
Cabinet Office Minister Chloe Smith said:
Every government contract should be achieving the best value for every taxpayer pound we spend. That’s why we reformed how government buys public services to make sure we’re attracting the most competitive, innovative and high quality range of suppliers, including SMEs.
SMEs are a key driver for the country’s economic growth, but in the past it was far too difficult for them to win business with government because of unnecessary and bureaucratic procurement procedures. We are working to change all that and ensuring every department has actions in place to increase SME spend, even though we are spending less overall.
We still have a long way to go, but it’s extremely encouraging to see how our work has increased the amount of business we’re doing with SMEs through both direct and indirect contracts.
See a table showing departmental SME spend data.