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As the dust settles on the collapse of outsourcing giant Carillion, attention is rightly turning to the role of SMEs in public procurement.

Earlier this month, Theresa May announced a raft of measures to help SMEs benefit from government contracts. Whilst there is clearly further to go, it is worth noting the often-overlooked progress that has already been made in bringing SMEs into the government’s supply chain.

Tussell data shows a steady growth in the number of SMEs winning contracts directly from the wider public sector. Between 2015 and 2017, the number of SMEs picking up contracts per month increased by more than a third from 1,275 to 1,746.

Number of Distinct Suppliers by Month
Number of distinct suppliers by month

 

More good news: SMEs consistently make up a majority of the suppliers that win government contracts. 62% of the 23,100 government suppliers in 2017 were SMEs.

Number of Distinct Suppliers by Year - Absolute and Proportion of Total
Distinct suppliers by Year

 

It's encouraging to see that improved access by SMEs to public procurement is being driven by every level of government. Last year Local Government saw the fastest rate of growth at 13% and around half (52%) of SMEs won contracts from Local Government buyers. Perhaps other parts of the public sector can learn from Local Government's 'grassroots' approach to engaging with SMEs.

SMEs Year on Year Change by Buyer Type (2017 vs 2016)
SMEs year on year change by buyer type

 

Government contracts are supporting a large number of SMEs in the capital: 2,000 London-based SMEs shared nearly 4,500 contracts in 2017.

But oher regions are catching up, with Scotland and the North East seeing the fastest year-on-year growth in SMEs winning contracts.

SMEs Breakdown by Region (2017)
SMEs breakdown by region (2017)

 

The government’s pledge to spend £1 in every £3 with SMEs by 2022 is rightly ambitious. To get there, it is going to have to ensure that public procurement is accessible to as many SMEs as possible. With more SMEs winning government contracts than ever, it is clear that there is already momentum behind this goal.

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