Government told to spend more with SMEs

posted by 5 years ago in News

The government’s effort to spend more with small and medium sized businesses has fallen flat according to a new report. The Public Accounts Committee (PAC) found that it failed to achieve a goal of 33 per cent SME spending despite meeting the 2015 target of 25 per cent.

Now there are calls for the government to put its money where its mouth is and increase the number of contracts awarded to small and medium sized businesses. In the report there are claims from the influential committee that, ‘it is not clear that SMEs are better able to compete with larger providers or whether they are actually getting any more government business than before’.

In August 2015, the government raised the target for SME spending to 33 per cent by 2020 as a result of a manifesto commitment.

PAC committee chair Meg Hillier MP said:

“We are sceptical about just how much progress has been made on increasing spending with SMEs.

“The fact the government has changed its approach to measuring such spending in four of the last five years makes it impossible to properly assess performance.”

The report urges better government support for SMEs and for them to reach out and encourage owners to bid for contracts. It also highlights the need for smaller businesses to be made aware of all direct contract opportunities and subcontracting opportunities as well as projects in the pipeline.

A Cabinet Office spokesperson said:

“We welcome the committee’s recognition of our efforts, including reaching 27% of spend going to SMEs last year, exceeding our target.

“We now want to go further, and are determined to reach our goal of spending £1 in every £3 with small businesses by 2020.

“Whilst this target is a challenging one, we are confident that we are putting in place the right actions to further open up government business and ensure we get the best value for the taxpayer.”