Government contracts 'out of reach' for SMEs, business group warns

12 Aug 2024

The British Chambers of Commerce (BCC) has revealed that only 20% of direct public sector procurement spend was with small and medium-sized enterprises (SMEs) in 2023.

£39.7 billion was spent with small firms last year, the BCC found. Whilst absolute public spending with SMEs has risen over the past six years, SMEs only made up a fifth of overall spending last year.

The business group stated that the Procurement Act, which comes into effect at the end of October, has the 'potential to make the system simpler and more transparent for businesses'.

Commenting on the matter, Jonny Haseldine, Policy Manager at the BCC, said: 'While it's welcome the value of SME procurement contracts is continuing to increase, government deals remain out of reach for too many businesses. 

'It is vital that public bodies always consider SMEs when tendering contracts. 

'Central government can learn lessons from local authorities who are consistently spending more on SME deals.'