Ministers set out an aspiration from the early days of the coalition government to give 25 per cent of public sector business to SMEs. The aim, especially in areas like IT procurement, has been to end a reliance on large contractors, with some multi-billion pound contracts spiraling out of control and not delivering results.
The government said direct spend with SMEs had increased from £3.2bn, or 6.8 per cent, in 2010/11 to £4.4bn, or 10 per cent, in 2011/12.
Major government suppliers also provided figures showing a further 6 per cent rise in indirect spend with SMEs in the supply chain, it was claimed.
“We reformed how government buys public services to make sure we’re attracting the most competitive, innovative and high quality range of suppliers, including SMEs,” said Cabinet Office minister Chloe Smith.
“SMEs are a key driver for the country’s economic growth, but in the past it was far too difficult for them to win business with government because of unnecessary and bureaucratic procurement procedures.
“We are working to change all that and ensuring every department has actions in place to increase SME spend, even though we are spending less overall.
“We still have a long way to go, but it’s extremely encouraging to see how our work has increased the amount of business we’re doing with SMEs through both direct and indirect contracts.”