Guidance

Small and medium-sized enterprise (SME) action plan: 2026 to 2028

Updated 13 October 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. These plans also include departmental targets for direct spend with SMEs and the actions being taken to remove and reduce barriers to SMEs bidding for government contracts.

The Procurement Act 2023 creates a more simple and transparent procurement regime, making it easier for SMEs to do business with the government. This action plan sets out why SMEs should work with us, where to find opportunities, and the actions we are taking to reduce barriers for SMEs in bidding for work.

The plan is monitored through an annual publication (as a minimum) of our direct spend with SMEs as a percentage of our total procurement spend.

SMEs are suppliers that have fewer than 250 staff, and have a turnover of an amount less than or equal to £44 million or a balance sheet total of an amount less than or equal to £38 million. For more information, see Clause 123 of the Procurement Act 2023.

Foreword

I am pleased to introduce the Home Office Commercial Directorate SME Action Plan. SMEs play an important role in providing the goods and services we need to deliver the Home Office’s missions, while supporting innovation, growth and greater diversity across our supply markets. This plan sets out how we will provide fair opportunities for smaller businesses to compete for and win Home Office contracts through procurement that is open, fair and transparent.

The Procurement Act 2023 and the National Procurement Policy Statement have strengthened the focus on creating opportunities for SMEs and voluntary, community and social enterprises. Our priority is to turn that policy intent into practical action: reducing unnecessary barriers, making opportunities easier to understand and access, and helping a wider range of suppliers do business with us. This plan explains how we will support the government’s ambitions for growth and apply these commitments across the Home Office.

We also know that working with SMEs can deliver benefits beyond economic growth. SMEs can bring local knowledge, new ideas and specialist capability, while supporting jobs and apprenticeships, community initiatives and our ambition to achieve net zero by 2050.

We will continue to embed the Procurement Act 2023 and make the most of the opportunities it provides to reduce barriers for SMEs. I recognise that progress will depend on how consistently we apply these commitments in practice, listen to supplier experience and work together across the commercial lifecycle. Our focus now is on delivering the actions in this plan and building on the progress we have made to create more opportunities for SMEs to work with the Home Office.

Jenny Williams

Chief Commercial Officer 

Department overview

The first duty of the government is to keep citizens safe and the country secure. The Home Office plays a fundamental role in the security and economic prosperity of the UK.

Read more about what we do

This government has an ambitious agenda for the Home Office, focused on delivering safer streets, secure borders, a fair migration system and a secure nation.

The Home Office is at the frontier of keeping the UK safe and secure, delivering services that make a real difference to the public. Times of unprecedented change and challenging circumstances remind us of the importance of the department’s work.

Our vision is to create a world-leading border that facilitates the flow of legitimate migration and goods and delivers a safe and prosperous UK, building on the 2025 UK Border Strategy. The future development of the migration and borders system is based on enhancing the use of data and technology alongside redesigning operations to improve outcomes across all areas of delivery, at the border and within the UK.

We will also address ‘hidden harms’ – crimes that disproportionately impact the vulnerable and are often out of sight, under-reported and under-identified. We prioritise driving down the prevalence of said crimes whilst driving up the reporting of them – which is a necessary step to increasing victim confidence. We are also focused on:

• increasing the number of offenders brought to justice
• improving the broader criminal justice response
• improving the support on offer for victims.

During 2025/26, our work to tackle violence against women and girls and domestic abuse continued, alongside action to address modern slavery and exploitation. This included:

• tackling labour exploitation and supporting the victims who suffer from it
• working with business and international partners to tackle slavery in supply chains.

Why SMEs should work with us

The Home Office conducts its business in a fair, open and transparent manner. It deals with a multitude of local, national or global organisations - from those with just a few employees to those with many thousands.

The Procurement Act 2023 puts SMEs front and centre of procurement decisions across the public sector, to ensure barriers to their participation in public procurement are actively challenged and removed, meaning all procurements will be evaluated on the principle of the Most Advantageous Tender (MAT). This is different to the Most Economically Advantageous Tender (MEAT), which  existed under PCR 2015. This will allow the Home Office to consider quality over price, which should be of benefit to SMEs, who often cannot compete against large companies when it comes to the price they can offer. MAT will be achieved through competition unless there are compelling reasons to the contrary. Our Procurement at Home Office (www.gov.uk) page provides information about our procurement arrangements and how to become a supplier.

A large proportion of Home Office spend is with large prime suppliers who deliver high value and high-risk services. Where possible, we welcome SMEs partnering together with another business(s) to create a consortium bid. Opportunities to create a consortium are addressed at the pre-procurement market engagement phases, where potential suppliers are brought together as part of our market building exercises. At this point, we help SMEs to understand the different corporate models and provide guidance on how to work as a consortium in the bidding process.

The opportunity to use SMEs is reviewed as part of the procurement strategy for every procurement over £10,000. Furthermore, the Commercial Assurance Board (CAB) provides additional assurance for procurements and contract changes where the value of proposed spend is above £10m or the requirements are deemed novel or contentious.

The procurement strategy, along with CAB documentation where relevant, supports the identification and removal of barriers for SMEs. This includes, where appropriate, breaking down requirements into smaller, more manageable lots. Furthermore, in cases where a prime delivery model is established, we will collaborate with our supplier partners to promote subcontracting opportunities for SMEs, ensuring these are effectively advertised and accessible.

The majority of our contracts are tendered through the Crown Commercial Service (CCS). CCS is the national procurement partner for the UK public sector for common goods and services. 

CCS commercial agreements are published as frameworks, catalogues, and dynamic purchasing systems (DPS). Further information on how to become a CCS supplier and how to do business with the government, can be found on Crown Commercial Service (www.gov.uk).

Links to departmental commercial opportunities

Direct opportunities

One of the most important things contracting authorities can do is to provide the market with information about current and future public contract opportunities by publishing a forward-looking procurement pipeline. The Procurement Act 2023 achieves this by requiring the publication of pipeline notices in certain circumstances. This is of particular benefit to SMEs, as it provides them with time to plan for future work, ensuring a competitive and diverse market.

Pipeline notices (UK1) for any intended requirement over £2 million are published on Find a Tender.

Our pipeline notices are a forward look for 18 months and are reviewed and updated every 6 months, or as necessary.

View our pipeline of potential activities

Read about how to look at the notices, notifications and the use of data

Search and apply for contract opportunities

Joining frameworks / DPS

Joining a commercial agreement, such as a framework or Dynamic Purchasing System (DPS), can put SMEs in front of buyers actively seeking their services.

• Framework agreements establish terms for future contracts, providing a pool of pre-selected suppliers from which public sector buyers can call off orders.
• DPSs are an ‘always open’ electronic list of pre-qualified suppliers that public sector buyers use to quickly and flexibly purchase goods, services, or works.

Search the Crown Commercial Service commercial agreement pipeline for upcoming agreements

Joining a supply chain

By joining our supply chain, you, as an SME, can gain access to larger government contracts that you might not secure on your own. We believe this is a valuable opportunity to build strong relationships with larger companies and gain invaluable experience working with us.

You can also use the Find a Tender service to identify potential prime contractors bidding on large government projects. By keeping an eye on these opportunities, you can proactively reach out to these organisations and offer your services as subcontractors or suppliers. We see this as an effective way for you to get involved in significant projects and establish yourselves within our government supply chain.

Many industry bodies and trade associations also advertise opportunities in supply chains.

Further information on how to do business with our department

Departmental supplier events

The benefits of market engagement are considered early and discussed with our customers before drafting full requirements and finalising the procurement strategy. Due to the scale and nature of our projects, market engagement can take various forms and we know that the supply market can help us to shape our requirements. 

Where possible, we will use planned procurement notices to advertise upcoming procurements. The planned procurement notice is designed to give as much advance information to the market as possible to enable potentially interested suppliers to determine if the upcoming procurement is something that they wish to bid for, and to provide maximum time for preparation. 

The next notice in the sequence, is a preliminary market engagement notice. This notice is used to invite suppliers to participate in preliminary market engagement or to notify the market that engagement has taken place. The Procurement Act 2023 does not require central government departments to conduct preliminary market engagement, however we recognise that it’s a particularly important tool for the achievement of value for money and to keep the market informed of developments. All planned and preliminary market engagement notices will be published on the Find a Tender portal.

We engage with SMEs through Home Office and cross-government supplier events, including Meet the Buyer sessions, industry events and virtual or hybrid forums. These events help suppliers understand upcoming opportunities and procurement requirements, provide feedback on barriers and challenges, and build relationships with buyers and larger suppliers. We also encourage our strategic and critical suppliers to invite their SME industry partners to our events so that we reach the widest possible range of suppliers. We recognise that attending in-person events can be disproportionately costly for SMEs, so we will continue to consider online and hybrid formats to support wider participation. Recent engagement activity includes:

• participation in Government Commercial Function meet the buyer events across the country;
• security and policing event SME Panel session;
• delivery of the first cross-government SME Meet the Buyer event in April 2026; and
• an SME engagement session with the Business Services Association in April 2026.

We will continue working with other government departments to develop cross-government engagement opportunities, including a further Meet the Buyer event planned for autumn 2026.

Our actions and milestones

We regularly review our SME Action Plan and procurement processes to ensure that SMEs are considered throughout the commercial lifecycle and that unnecessary barriers to participation are identified and removed. Our aim is to make procurement processes clear and accessible and, where appropriate, increase opportunities for SMEs across our Bronze and Silver contract portfolios.

Since the previous version of this plan was published, we have achieved the following actions to support SMEs:

Market engagement: We have strengthened guidance to help SMEs understand social value requirements during market engagement. Our Invitation to Tender guidance and templates support the use of lots where relevant and appropriate, helping to make opportunities more accessible to smaller suppliers.

Buyer guidance: Feedback continues to inform improvements to Procurement Act tools and templates as part of business-as-usual activity.

SME/VCSE bid pack: We also identified a further opportunity to support smaller suppliers and developed an SME and voluntary, community and social enterprise (VCSE) bid pack. The pack provides practical guidance on finding Home Office opportunities, understanding the procurement process, preparing bids and meeting buyer expectations. It is intended to make procurement more accessible, improve supplier readiness and support greater SME and VCSE participation. The pack has been approved and is awaiting publication.

We established a Transparency Working Group to strengthen the quality, consistency and timeliness of procurement notices, supporting compliance with our transparency obligations and improving visibility of opportunities for SMEs. We continue to maintain notice information on Find a Tender and monitor direct and indirect SME spend trends.

Monitoring SME performance: We have strengthened supplier identification and validation to improve the quality and reliability of our SME and VCSE spend data.

Produced a social value guide for our business partners highlighting the benefits of delivering against the National Procurement Policy Statement by June 2025.

Supplier engagement: We have delivered and participated in a range of supplier engagement activity, including Government Commercial Function meet the buyer events and the first cross-government SME Meet the Buyer event in April 2026. In March 2026, we also participated in the Security & Policing event, contributing to a Home Office panel discussion on SME participation, and in April 2026 we delivered an SME-focused presentation to the Business Services Association. These activities helped raise awareness of Home Office opportunities, explain our approach to SME participation and engage directly with suppliers and industry representatives.

Together, these actions have improved SME access and readiness by strengthening market engagement and buyer guidance, developing an approved SME and VCSE bid pack, improving procurement transparency and spend data, and increasing direct supplier engagement through national, cross-government and industry events. Key milestones include establishing the Transparency Working Group, integrating enhanced supplier validation, issuing practical social value guidance, and delivering the first cross-government SME Meet the Buyer event in April 2026. Building on this progress, our future actions are set out below.

Future actions

Improvement action	Benefit to SMEs	Milestones
Reduce the complexity of the procurement process	Simplifying the procurement process by refining guidance and documentation helps SMEs better navigate instructions and requirements in tenders. It also prevents confusion and increases the chances of SMEs submitting relevant bids that meet expectations.	Ensure continuous improvement by regularly assessing feedback to reduce ambiguity in Procurement Act tools and templates.
Monitoring SME performance	Monitoring procurement activity gives SMEs clearer visibility of available contracts and market trends, helping them identify suitable opportunities, adapt to regulatory changes and target bids more effectively.	Maintain notice information posted on the Find a Tender portal to provide SMEs with real-time insights into available procurement opportunities. This information should allow SMEs to filter opportunities based on their specific capabilities and interests, enabling them to target their bids more effectively. Establish internal working group to improve the quality of pipeline notifications. Continue to track and understand SME direct and indirect trend analysis vs procurement processes to identify opportunities vs contracts awarded. Data collected will be used to inform future action plans and demonstrate economic growth given the flexibilities of the Procurement Act 2023.
Improve engagement with SMEs	Engagement gives SMEs clearer insight into social value and procurement requirements, helping them strengthen bids and compete more effectively. Online and hybrid formats reduce participation costs and widen access, while giving SMEs a forum to raise barriers and help shape future procurement approaches.	Organise at least 2 supplier events which are focused on supporting SMEs up to March 2028. Conduct supplier survey to gain insight into supplier thoughts on our engagement and procurement processes by March 2028. Recognise that attending in-person industry days can be disproportionately costly to SMEs. We will encourage procurement teams to offer online/hybrid events. Collaborate with other government departments to deliver a cross Whitehall Meet the Buyer event in Manchester on 25th November 2026.
Creating SME opportunities	Smaller, appropriately structured opportunities make it easier for SMEs to compete for and win contracts that match their capacity and expertise.	Identify the categories offering the greatest opportunities for SMEs and work with business areas to remove barriers to participation. By March 2028, ensure early market engagement includes UK and preliminary market engagement notices, and that procurement strategies consider smaller work packages where appropriate. [footnote 1]
Post award process	The post-award guidance will help Home Office SMEs transition confidently from contract award to delivery. It will provide practical support on mobilisation, finances, invoicing, compliance, reporting, stakeholder relationships, risk management and contract closure—reducing uncertainty, preventing common issues and building capability for future opportunities.	Produce a post award guidance pack for SME/VCSEs and publish on GOV.UK by March 2028.

Case studies

Please use the link below to access Home Office social value and SME case studies:

Home Office social value and SME case studies

Our spend with SMEs

Summary

A significant proportion of Home Office spending goes to SMEs. This is both through direct contracting with the Home Office and through the vital role that SMEs play in our supply chains.

In our previous action plan, we set a very ambitious target to increase direct spend with SMEs from 4% in 2024/5 to 10% in 2027/28.  This target was based on the historical data and trends available at the time and the Home Office’s track record on enabling SME organisations to bid successfully across its contract portfolio.  Between 2015/16 and 2021/22, the proportion of Home Office direct SME spend increased steadily, reaching a peak of 30.4% in 2021/22.  It subsequently decreased to 16.7% in 2022/23, 14.7% in 2024/25 and 4% in 2024/25.

Direct spend with SMEs has increased by 5.6% from £253.5 million in 2024/25 to £267.8 million in 2025/26 but remained at 4% of total procurement spend. This is due to a number of factors.  Firstly, overall procurement spend also increased from £6.4 billion in 2024/25 to £6.6 billion in 2025/26, impacting on the SME spend as a proportion of the whole.  Secondly, the primary factors that drove the decrease in Home Office’s direct SME spend since 2022 are still in place and are likely to remain for some time. The Home Office’s spend and contract portfolios are now dominated by large, complex and operationally critical contracts, reflecting the scale and complexity of much of the Home Office’s delivery responsibility. This makes the opportunities suitable for SMEs (typically our Bronze and Silver categorised contracts) a smaller proportion of our overall portfolio by value. Gold contracts are typically longer in length and therefore this shift in the overall portfolio and spend portfolio is likely to remain for the next few years.  Thirdly, since 2022 we have also improved our reporting to make it more accurate.  This has included reclassifying 11 organisations that were previously SMEs but who have now grown into larger organisations, largely through the Home Office contracts that they have successfully delivered. Given our ambition to support and grow SMEs, this is a significant success, However, it does mean that these organisations no longer count towards our direct SME target. In 2025/26 the Home Office spend £1.2m with 7 of these previously SME organisations.

In the sections below we break down some of the trends we have seen in Home Office contracting and spend and set out our next steps.

Changes in contract portfolio

Between 2024/25 and 2025/26, the number of bronze, silver and gold contracts increased. Growth was most pronounced for gold contracts, which increased from 77 to 102, while their total value rose from £24.1 billion to £31.6 billion. Bronze contract numbers and value increased modestly, while the number of silver contracts increased slightly but their total value decreased from £5.5 billion to £5.0 billion.

This shows that the contract portfolio remains weighted towards higher-value and more complex contractual activity. Gold contracts are also typically longer in duration. Therefore, this shift in the portfolio towards Gold contracts is likely to remain for the next few years.

The tables below show the changes in number of gold, silver and bronze contracts from 2022/2023 – 2025/2026.

Bronze contracts – Low risk / low value

The number of bronze contracts decreased from 1,050 in 2023/24 to 690 in 2024/25, before increasing to 730 in 2025/26. Over the same period, their total value decreased from £2.1 billion to £1.4 billion, before increasing slightly to £1.5 billion. The number of suppliers also increased from 424 in 2024/25 to 474 in 2025/26

Year	HO Bronze Contracts	Value (£b)	Suppliers
22/23	806	1.4	476
23/24	1050	2.1	564
24/25	690	1.4	424
25/26	730	1.5	474

Silver – medium risk, value and complexity

The number of silver contracts increased from 214 in 2024/25 to 220 in 2025/26, and the number of suppliers increased from 120 to 131. However, their total value decreased from £5.5 billion to £5.0 billion.

Year	HO silver contracts	Value (£b)	Suppliers
22/23	75	2.0	62
23/24	131	2.4	125
24/25	214	5.5	120
25/26	220	5.0	131

Gold - business critical, highest risk contracts

Gold contracts recorded the largest increase. The number of contracts rose from 77 in 2024/25 to 102 in 2025/26, their total value increased from £24.1 billion to £31.6 billion, and the number of suppliers increased from 50 to 65.

Year	HO gold contracts	Value (£b)	Suppliers
22/23	40	19.7	28
23/24	63	21.4	40.
24/25	77	24.1	50
25/26	102	31.6	65

Classification of SMEs

The reclassification of 11 suppliers has reduced our reported direct SME spend, although it also reflects a positive outcome: these businesses grew beyond the SME thresholds after successfully delivering Home Office contracts. In 2023/24, spend with the 11 suppliers was £1.7 million and would have counted as SME spend had they remained classified as SMEs. Nine of the 11 remained in our supply chain in 2024/25, accounting for £1.2 million of spend, and seven remained in 2025/26, also accounting for £1.2 million.

This continued relationship demonstrates how working with the Home Office can support supplier growth, but the resulting reclassification means that this spend is now recorded as non-SME and no longer contributes to our direct SME spend target.

Improving visibility of SME spend

We are improving the collection and reporting of direct and indirect SME spend data. Direct spend is recorded through the Home Office financial system, Oracle Fusion, while information on SME participation through supply chains is collected from major suppliers.

We have also improved supplier identification and validation through the integration of Dun & Bradstreet checks within Jaggaer. This has strengthened the quality and reliability of our SME and VCSE spend data.

2025/26 SME spend data and next steps

An overview of our 25/26 SME spend data can be found below:

• Total procurement spend £6.6 billion
• Direct spend with SMEs £267.8m
• Direct spend with SMEs 4%

The Home Office set an indicative direct SME spend target of 8% for 2025/26, increasing to 10% by 2027/28. Direct SME spend represented 4% of total procurement spend in 2025/26, below the indicative target. We will continue to focus on practical measures to reduce barriers, improve the visibility of opportunities and support SME participation directly and through supply chains.

We are improving the collection and reporting of indirect SME spend data, recognising that a substantial proportion of SME participation takes place through subcontracting and supply-chain arrangements. This will help us build a clearer picture of SME participation beyond direct contracts and identify opportunities to work with prime suppliers to support SMEs within their supply chains. We are not currently setting an indirect SME spend target but will use improved data to inform future action plans.

View central government spend with SMEs - These publications provide data on the central government’s direct and indirect spend with SMEs.

An overview of our 25/26 SME spend data

Financial year	Direct spend with SMEs % Target	Total procurement spend (£)	Direct spend with SMEs (£)	Direct spend with SMEs %
2019/20	26.5%	£2.4b	£382m	15.9%
2020/21	20.8%	£2.9b	£622m	20.8%
2021/22	N/A	£4.3b	£1.3b	30.4%
2022/23	N/A	£5.8b	£968m	16.7%
2023/24	N/A	£6.8b	£1b	14.7%
2024/25	N/A	£6.4b	£253.5m	4%
2025/26	8%	£6.6b	£267.8m	4%
2026/27	9%	Not yet known	Not yet known	Not yet known
2027/28	10%	Not yet known	Not yet known	Not yet known

Our payment performance

Government is leading by example and paying our suppliers promptly. Late payment is an issue for businesses, especially smaller businesses, as it can adversely affect their cash flow and jeopardise their ability to trade. The government recognises that the public sector should set a strong example by paying promptly. The public sector is required to pay their suppliers in 30 days and report on their performance on an annual basis. 30-day terms also apply in public sector supply chains. Our department’s latest payment performance is set out below.

The latest published Home Office payment performance, covering the fourth quarter of 2025/26, is set out below:

• 79% Percent of invoices were paid within 5 days.
• 97% Percent of invoices were paid within 30 days.

View our Home Office prompt payment data 2025 to 2026

View further information on government’s payment policy and legislation

SME Hub

The small and medium business hub is a dedicated space for SMEs looking to work with the government.

Here you will find links to other departmental action plans and centralised guidance on bidding for government work.

Contact us

Home Office

SMEEnquiries@homeoffice.gov.uk  

Find out about our department

Footnotes

1. ‘small and medium-sized enterprises’ means suppliers that— (a) have fewer than 250 staff, and (b) have a turnover of an amount less than or equal to £44 million or a balance sheet total of an amount less than or equal to £38 million; See section 123 of the Procurement Act 2023, ↩