News story

Government spends £11.4 billion with SMEs

This news article was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government

Government spends over a quarter of its procurement budget with small and medium-sized enterprises. Further reforms will increase the spend.

Central government spent an unprecedented £11.4 billion with small and medium-sized enterprises (SMEs) in 2013 to 2014. The Minister for the Cabinet Office Francis Maude has announced new figures showing that a record 26.1% of government spend went to SMEs.

The new data shows that central government spent 10.3% directly with SMEs, and 15.8% indirectly. This meets our aspiration, set in 2010, that 25% of government procurement spend would be with SMEs by the end of this Parliament. View the data on central government spend with SMEs 2013 to 2014.

We have launched a refreshed Contracts Finder website, at www.gov.uk/contracts-finder. It now has a much better search function, including the facility to search by location. Contracts Finder covers current and future public sector contracts above £10,000 in central government and above £25,000 in the wider public sector. It’s free to use, and you can use it from a computer or a mobile device eg a smartphone or tablet.

Search for government contracts now.

New legislation coming into force today (25 February) means that:

  • everyone in the supply chain must comply with 30 day payment terms, including suppliers and sub-contractors
  • public bodies must publish an annual late payment report, making their accountability more transparent
  • the bidding process is simpler across the wider public sector – complex forms, such as Pre-Qualification Questionnaires, are now abolished for low value contracts
  • the procurement process for public sector contracts will be quicker

Read more about the reforms to government buying:

Minister for the Cabinet Office Francis Maude said:

As part of our long-term economic plan this government is overhauling public procurement to open things up to businesses of all sizes. I am so pleased that our reforms have ensured that innovative SMEs benefited from £11.4 billion of business last year alone. Over a quarter of our spend now goes to SMEs but we know there’s much more to do, and these new reforms show just how determined we are to finish the job.

Lord Young, the Prime Minister’s Enterprise Adviser said:

Contracts Finder is a world first in terms of scale and ambition. It opens up government business like never before and levels the playing field for SMEs who in the past, didn’t know how to find public sector contracts, let alone bid for them.

Piers Linney, Co-CEO of Outsourcery and member of the government’s SME panel, added:

We know government business has been incredibly complicated and costly to bid for in the past, and that was reflected in the tiny proportion of spend going to SMEs. This new legislation and the new site create a huge opportunity for SME businesses with reduced cash flow risk. They need to educate themselves on their rights under the new legislation and really get under the skin of Contracts Finder to make sure they can seize that opportunity.

The regulations implement new EU rules for public sector contracts which will speed up the procurement process. The UK is the first EU member state to implement these rules, doing so in just 10 months, 14 months earlier than the EU deadline.

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