The National Audit Office (NAO) has published a report setting out the progress made so far and the challenges faced by the government in its efforts to increase its spending with small and medium sized enterprises (SMEs) by 2020.
The Cabinet Office has estimated that 27% of government's procurement spending, a total of £12.1 billion, reached SMEs in 2014-15. This figure has surpassed the government’s target, which was originally 25%. As a result, the UK government now aims to increase its spending with SMEs to 33% by 2020.
Over the last five years, the Government has had a clear and sustained focus on the involvement of SMEs in government contracts. Initiatives have been introduced, aiming to reduce the barriers faced by SMEs when bidding for public sector work. It’s been recognised that SMEs can offer a number of benefits to the public sector, including more flexibility and innovative approaches. However, SMEs have reported that they still face barriers as government initiatives are not sufficient enough to ensure that more work flows to SMEs.
The NAO has suggested that the government are more likely to realise the potential benefits of using SMEs if they take a more focused approach to improving access for them.
National Audit Office head, Amyas Morse, said: "If the government is serious about increasing its use of SMEs, it will need to focus on those areas where SMEs can deliver real benefits… as it seeks to increase procurement spending further, the Government will need to think about the full range of risks and opportunities that contracting with SMEs presents, compared to working with larger providers."
TechUK Associate Director of public sector, Naureen Khan, said: "The NAO's conclusions echo the findings and recommendations of our SME report. To continue to make progress against the Government's target, a focus on opening up the market and creating a level playing field is critical."
Khan added: "The NAO rightly points out there is a clear issue with Civil Servants understanding of SMEs capability, and where they can have the most impact."
"A more diverse and vibrant public sector supply chain which includes large and small is critical to delivering the end to end transformation that is urgently needed”.
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