Policy paper

Departmental Small Business Procurement Targets (HTML)

Published 24 March 2026

How we are backing your business

Through Backing your business: our plan for small and medium-sized businesses, we are delivering the most comprehensive package of support for small and medium-sized enterprises (SMEs) in a generation.

Growth is this government’s number one mission and SMEs are the engine room. Our plan is to make the UK the best place to start and grow a business, with a culture that supports entrepreneurship in every community and high street.

We’re delivering:

• the most significant legislation to tackle late payments in over 25 years, giving the UK the strongest legal framework on late payments in the G7
• a new Business Growth Service to simplify finding advice and support, including a new streamlined digital offer – Business.gov.uk, ending the chop and change of previous government business support programmes
• a package of support tailored to high streets to make it easier for SMEs to set up shop, ranging from a new licensing framework to targeted funding for places
• a massive £4 billion finance boost to increase access to finance for entrepreneurs – to inspire the next generation of small business owners, make the UK the best place to start and grow a business, and build a culture that celebrates and champions entrepreneurs

We also committed to making SMEs a national priority, ensuring they have a fair opportunity to win public contracts and setting ambitious SME targets for each department. Each departmental SME action plan sets the steps government departments are taking to maximise SME and start-up spend across their department and wider agencies. 

Departmental Small Business Procurement Targets 

In addition to direct spend targets, departments can voluntarily set indirect targets with SMEs and report against these annually. The Ministry of Defence has set a target to increase direct and indirect spending by £2.5bn with SMEs to £7.5bn by May 2028. This increase in total spend would equate to a 50% increase in spend by MOD with SMEs compared to FY 23/24. A % target and SME Action Plan for the MoD will follow shortly after the publication of the Defence Investment Plan. The Department for Transport Group has set a combined SME spend target of 33% (direct and indirect). 

The table below sets out department’s three year target for direct spend with SMEs. Targets have been signed off by each relevant departmental Minister.

Department Name	3 year direct spend target (%) for spend with SMEs
Cabinet Office	30.0%
Department for Business and Trade	18.0%
Department for Culture Media and Sport	33.0%
Department for Education	10.0%
Department for Energy Security and Net Zero	29.0%
Department for Environment, Food and Rural Affairs	20.0%
Department for Health and Social Care	15.0%
Department for Science, Innovation and Technology	40.0%
Department for Transport	5.75%
Department for Work and Pensions	8.0%
Foreign, Commonwealth and Development Office	14.0%
HM Revenue And Customs	8.0%
HM Treasury	22.0%
Home Office	10.0%
Ministry of Housing, Communities and Local Government	27.5%
Ministry of Justice	22.0%
UK Export Finance	12.0%

Notes: 

• This table sets out each department’s three year target for direct spend with SMEs (until end FY 27/28) in line with the requirements set out in PPN 001.
• Departmental spend profiles vary - for some, significant spend with SMEs feature in the supply chain. Departments can voluntarily set indirect targets with SMEs and report against these annually.
• Supporting Departmental SME Action Plans can be accessed via the SME hub.