SMEs less confident in government procurement target

20 March 2019

The government has been urged to drive govtech procurement through the Digital Marketplace to ensure SME involvement.

report from industry body techUK included a poll that found 68% of govtech SMEs believed the government had not acted effectively on its commitment to help small businesses break into the public sector market.

Earlier this month, the Department for Business, Energy & Industrial Strategy reiterated a government target that £1 in every £3 of its procurement budget should go to SMEs by 2022.

However, only 37% of SMEs think this target is achievable in the next five years, down from 49% last year, the report said.

In order to increase SME participation in public sector contracts, the report called on government departments to encourage buyers to drive procurement through the Digital Marketplace and to consolidate the number of procurement frameworks used.

Joining procurement frameworks uses time and resources that many SMEs do not have, and the report argued that by focusing on a few major frameworks, rather than a large number of niche ones, small businesses would be able to keep up with buying opportunities.

The report said: “The Cabinet Office should embark upon a structured, concerted effort to expand Digital Marketplace usage across central and local government. The evolution and enhancement of the Digital Marketplace should be done in close collaboration with both customers and suppliers to ensure it is optimised for all users.”

The report did note that some efforts to improve the Digital Marketplace and SME access seemed to be working, as 63% of respondents said that the G-Cloud framework had helped SMEs offering cloud-based services to access the public sector market.

The report also called for the government to adopt a more strategic and transparent approach to market engagement to make the public sector easier to navigate for new entrants.

Henry Rex, head of central government at techUK, said the survey was evidence that more needs to be done to ensure access to public service markets is improved for SMEs.

“It’s particularly disappointing is the fact that this year respondents seem to have even less confidence than last that the government will meet its SME supplier target in the next five years,” he said.

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