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Government’s New Small Business Strategy: A Procurement Revolution for SMEs
The UK Government’s publication of their Small Business Strategy rightfully highlights how public contracts can be a game changer for SMEs – and the vital role that effective procurement can play within this process.
As procurement experts who work with 2,000 suppliers (most of whom are SMEs), we welcome the Government’s commitment to crucial reforms that will streamline, prioritise and expand SME procurement.
The strategy addresses a concerning trend: while direct SME government spending reached £3.52 billion in 2023-24, the overall share going to smaller enterprises has actually declined over the past five years. This represents a significant missed opportunity, but is unsurprising considering how overly complex and often inaccessible nature of public contracts.
We welcome three key pledges in this strategy:
First, that government departments must prioritise SMEs with ambitious spending targets – creating genuine accountability that changes procurement behaviour. At Constellia, we know that SME’s drive efficiencies and competition within the process, and yet, 70-80% of local government contracts are currently direct awards.
Second, that streamlining processes through the new SME Procurement Education programme is necessary to tackle knowledge gaps. Procurement messaging must be straightforward and accessible – something we’ve long demonstrated with our own supplier network.
Third, that reforming defence procurement through the new MoD SME Support Centre creates vital single points of access, demonstrating the value of enhanced collaboration between private and public sectors. SMEs are the key to driving innovation within the sector; Our Neutral Vendor Framework for Innovation has already facilitated the rapid adoption of problem-solving technologies across the Ministry of Defence.
Government contracts offer SMEs enhanced market credibility, predictable cash flow, capability-building opportunities, and scale for growth investments.
These reforms create an opportunity to unlock SME potential across the UK through improved competition, simplicity, and collaboration. We stand ready to work alongside the Government to deliver this transformation, and drive economic growth in all regions.
These reforms create an opportunity to unlock SME potential across the UK through improved competition, simplicity, and collaboration. We stand ready to work alongside the Government to deliver this transformation, and drive economic growth in all regions.
For SMEs who have previously found government contracting intimidating, this represents a significant opportunity. The landscape is evolving, barriers are being lowered, and support is being enhanced.
We are on hand to support and ensure that SMEs can leverage this significant opportunity.
Published by: Rob Levene
CEO
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