12/10/2017
New measures proposed to increase government spend with SMEs (UK)
While the latest data shows that the amount central government spends with small and medium sized businesses (SMEs) has significantly increased since 2011/12, it still falls well short of the target of 33% flowing either directly or indirectly through the supply chain to SMEs by 2022.
New measures proposed by government to help ensure the target is achieved include
- using transparency to encourage large businesses to employ more SMEs in the supply chain
- improving visibility of supply chain opportunities available to SMES by requiring large suppliers to publish their subcontracting opportunities on ‘Contracts Finder’ *
- making prompt payment part of the selection process for larger suppliers
The latter proposal was particularly welcomed by FSB chairman, Mike Cherry, who commented that it was important for government departments and agencies “… not to hand public money to bigger companies which have a track record of treating smaller suppliers appallingly, with late payments and unfair contracts.”
The latest data on the Government procurement spend shows that SMEs benefitted either directly or indirectly from £12.2 bn of central government procurement money in 2015-16 – an increase of £5bn compared with 2011/12 when comparable figures were first collected. The amount spent directly with SMEs increased from £4.4bn to £5.6bn in the same period.
The £12.2 bn direct and indirect spend with SMEs equates to roughly £1 in every £4 of the total procurement spend – a significant improvement but still well short of the ultimate target of £1 in every £3.
‘Central government spend with SMEs 2015 to 2016’ provides comprehensive data on central government direct and indirect procurement spend in 2015/16.
* ‘Contracts Finder’ is an interactive tool that allows users to
- search for government contract opportunities worth £10,000 or more
- find out about future opportunities
- look up details of previous tenders and contracts
It also includes links to a wide range of government guidance and information.
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