A change of Prime Minister rarely happens without consequences for public procurement. Andy Burnham's arrival at Number 10 is no exception. In his first week of taking office, he already signalled that SME public sector procurement sat close to the top of his agenda, with talk of reindustrialising Britain, backing British suppliers, and spreading opportunity beyond London.
For businesses that rely on public sector contracts, that raises an obvious question: will any of this translate into real opportunity, or is it simply politics as usual? We've pulled apart what's been said so far, what it could mean in practice, and how SMEs can position themselves either way.
What's in Burnham's Buying British pledge?
Much of the early commentary has centred on Burnham's "Buying British" pledge. The premise is straightforward. Government spends close to £400 billion a year on goods, works and services. Direct more of that towards British suppliers, the argument goes, and you strengthen domestic supply chains while creating jobs closer to home.
Burnham has framed this as part of a wider economic approach he calls "Manchesterism," built on devolution and long-term, collaborative planning rather than short-term cost cutting. In his first talks with business groups including the CBI, the Federation of Small Businesses and Make UK, the government reaffirmed its intention to use public procurement to back British businesses, apprenticeships and skills, alongside workers' rights reforms developed in partnership with employers and unions.
For SMEs, the direction is starting to become more concrete. PPN 026, published on 5 August, raises the threshold for the central government Social Value Model to contracts worth £1 million or more. The government says this should reduce burdens on smaller firms and social enterprises competing for lower-value contracts, while larger procurements will place much more weight on jobs and skills.
The Federation of Small Businesses has welcomed the change, arguing that smaller businesses often deliver substantial social value already but can struggle to demonstrate it through complex procurement processes. Whether the reform translates into more SME contract wins remains to be seen, but this is at least a practical change rather than another spending target or statement of intent.
What Burnham's agenda means beyond procurement
Procurement policy rarely exists in isolation, and the government's latest devolution plans make that particularly clear. Under Rewiring the State, mayors and local authorities are set to gain greater responsibility across housing, transport, skills, employment support, innovation and local energy. Local areas will also be able to procure tailored employment support for the long-term unemployed, creating a direct link between devolution and future commissioning opportunities.
Devolution could create more regionally focused opportunities, particularly where buyers divide programmes into proportionate lots or use smaller local routes to market. But regional procurement is not automatically SME-friendly. Burnham’s own record in Greater Manchester shows the difficulty: SMEs accounted for 17% of GMCA procurement spend in 2025, well below the wider local-government average. Larger programmes covering several authorities can still favour suppliers with greater scale, financial capacity and geographic reach.
Building on the Procurement Act 2023
None of this happens on a blank canvas. The Procurement Act 2023, which came into force in February 2025, already reshaped the rules SMEs operate under, from simplified selection criteria to mandatory pipeline notices giving suppliers advance visibility of upcoming contracts. Burnham's proposals would layer new priorities on top of a system that is still bedding in.
It's worth revisiting the impact of recent procurement changes on SMEs if you haven't already, particularly if your business has grown or changed shape recently. Eligibility isn't always obvious, and it's worth checking the definition of an SME under the Procurement Act before assuming your status, or the support available to you, hasn't shifted. Government departments have also been required to publish direct spend targets covering 2025/26 through to 2027/28, a reporting obligation that predates Burnham but which his administration will inherit and, potentially, tighten.
Are SMEs actually winning more public sector work?
The honest answer is: some progress, but not evenly. According to the British Chambers of Commerce and Tussell's SME Procurement Tracker, direct public sector spend with SMEs reached a six-year high of 21% last year, up from 19% the year before. That's real progress, but it masks a sharp divide. Local government now channels 34% of its spend to SMEs, worth £29.1 billion, while central government sits at just 10%, still below where it was five years ago.
Sector matters too. SMEs receive around a third of direct spend in education, training and recruitment, but as little as 3% in defence and aerospace. It's a useful reminder that broad political pledges don't always land evenly across every part of the market. For a closer look at which sectors and buying authorities are opening up fastest, our breakdown of where SMEs are winning public sector work is a good starting point.
Will spend targets finally be met?
Targets have existed for years without being consistently hit. The government's long-standing ambition is for £1 in every £3 of public procurement spend, roughly a third, to reach SMEs. Actual performance has typically landed well below that.
Burnham inherits a more transparent target regime than previous Prime Ministers. Central government departments now have published direct SME spend targets running to the end of 2027/28, ranging from 5.75% to 40%. The aim is to channel over £7.4 billion a year in direct spend to small businesses by 2028.
The question is whether his government will leave those targets unchanged, raise expectations or introduce stronger measures to improve delivery against them. With targets becoming more granular and more visible, it should, in theory, become easier to hold buying authorities to account.
How SMEs can prepare for a shifting procurement landscape
Political change creates noise, but it rarely rewrites procurement fundamentals overnight. The businesses that benefit from moments like this tend to be the ones already positioned to respond quickly when opportunity appears.
There is now one useful threshold to keep in mind. PPN 026 does not generally apply below £1 million, while contracts worth £1 million to under £5 million will have at least 10% of the score attached to social value and those worth £5 million or more at least 20%. SMEs moving into larger central government contracts should therefore expect social value evidence to become more important, not less.
A few practical steps make sense regardless of how the politics plays out:
- Strengthen your social value evidence, particularly around jobs, apprenticeships, skills and routes into work. For larger central government contracts, these areas will soon carry significantly more evaluation weight.
- Keep a close eye on pipeline notices from local authorities and devolved mayoral bodies, where SME-friendly spend is already concentrated.
- Review your bid capability honestly. A promising policy shift only helps if you're ready to compete for the contracts it creates.
That's where we come in. Whether you need hands-on tender support for SMEs, help building internal bid capability, or bid-tech tools paired with expert guidance, Thornton & Lowe works alongside businesses of every size to turn procurement opportunity into contract wins.
Support from Thornton & Lowe
Burnham's procurement agenda leans in the right direction for SMEs. Raising the Social Value Model threshold to £1 million should remove some unnecessary complexity from lower-value central government contracts, while devolved delivery could create more opportunities through regional buyers. But policy intent and buying authority behaviour don't always move at the same speed, and the gap between local and central government performance shows how uneven progress can be.
At Thornton & Lowe, we help SMEs cut through that uncertainty and compete with confidence, whatever direction procurement policy takes next. If you want to understand what these changes mean for your sector, or need support getting bid-ready for the opportunities ahead, get in touch with the Thornton & Lowe team today.
