The UK government has announced a target that £1 in every £3 will be spent with SMEs by 2020.
The Cabinet Office (CO) said government departments and the Crown Commercial Service would be setting out individual plans to ensure the “ambitious target” is met.
During 2013-14 central government spent £11.4 billion with SMEs, equivalent to 26 per cent of spend. Increasing this to one third would mean an extra £3 billion per year going to SMEs “directly or through the supply chain,” said the CO.
Minister for the CO Matt Hancock said: “This is such an amazing opportunity for the country’s diverse and innovative small businesses, and today I urge them to get stuck in.
“From computers to uniforms – there are so many opportunities for small businesses to work with us, and I want to see more of them providing value for money for the taxpayer and benefiting from our spending.”
The move follows action by the government to encourage SMEs including requiring the public sector to pay invoices within 30 days, abolishing pre-qualification questionnaires for low-value contracts and publishing opportunities in one place on Contracts Finder.
John Allan, national chairman for the Federation of Small Businesses, said: “The government has much to gain from opening up public procurement to smaller businesses and we welcome the government’s commitment to achieve this ambitious target. To meet it, the government will need to focus on robust monitoring and challenge poor practices wherever they are found.”
John Manzoni, chief executive of the civil service said: “Further opening up our marketplace to small businesses is good economic sense all round – making it easier for them to access and win government business opportunities, while encouraging increased competition and market innovation to deliver best value for the taxpayer.”