UK SMEs secure record-breaking £21 billion in government contracts

As UK SMEs continue to grow and diversify their market, newly released data from the Cabinet Office examines government contracts with small businesses.

The latest figures revealed UK small businesses acquired £21 billion worth of government work during the fiscal year 2021/22 – which can be seen as a testament to the government's commitment to supporting and empowering SMEs.

This noteworthy financial support from the government translates to an average of approximately £3,800 for every British small business. Spanning a spectrum of sectors, the breadth of government work awarded to SMEs is nothing short of impressive.

From contributing to vital public infrastructure projects such as schools and hospitals to driving innovations in defence technology, and playing a pivotal role in healthcare services encompassing clinical, medical and digital health domains, small businesses have proven their mettle on multiple fronts.

The sum is an outstanding increase of £1.7 billion from the previous year, marking the sixth consecutive year that small businesses have seen an upsurge in government contracts – a milestone unparalleled in the record books.

Cabinet Office Minister, Jeremy Quin, expressed his enthusiasm over the findings, emphasising the government's dedication to fostering an inclusive market that supports SME participation. He noted the transformative impact of lowering entry barriers, ensuring more small companies partake in public sector spending, thus generating wider economic benefits.

Quin examined the pivotal role of public procurement, revealing that one out of every three pounds of public expenditure finds its way into this realm. He further elaborated on the ongoing evolution of procurement management through the Procurement Bill, aimed at not only safeguarding taxpayer funds but also galvanising progress across the entire UK.

The timing of this revelation coincides with Minister Quin's scheduled visit to SME supplier Wagtail in Flintshire, Wales. Renowned for its specialised detection dog services, Wagtail has been instrumental in supporting government departments and agencies including the UK Border Force, HM Revenue & Customs, the Police, Trading Standards and the Armed Forces.

This visit offers an exceptional opportunity to witness firsthand the tangible benefits of innovative procurement methodologies, as well as to comprehend the ways in which the forthcoming Procurement Bill will streamline and enhance the path for small businesses like Wagtail to secure government contracts.

Central to this transformation is the introduction of regulations that mandate the inclusion of SMEs in procurement development across all government departments and public organisations. This shift will aid increased competition and allow more SMEs to vie for government contracts through simplified and flexible procedures.

What's more is that the new regulations also include heightened transparency regarding upcoming projects, affording SMEs greater preparation time. A centralised platform will spotlight prospective developments in each region, facilitating easier access for local businesses to seize opportunities in their area of expertise.

The government is set to streamline registration for SMEs through a single unified website, eliminating the need for cumbersome registrations across multiple platforms. Additionally, this progressive regulation will dispense with unnecessary insurance costs before suppliers even submit their bids, further levelling the playing field.

The introduction of a Competitive Flexible method within the new regulations will amplify the infusion of innovation into the procurement process. Furthermore, swift payment mechanisms will guarantee that all enterprises within the public sector supply chain receive payment within a 30-day timeframe.

During his interaction with Wagtail, Minister Quin will engage with Adam Vizard from the senior leadership team, gaining valuable insights into the company's journey and experiences with governmental contracts.

The minister will also interact with Wagtail's skilled dog trainers and operational handlers, offering a unique opportunity to observe demonstrations showcasing the remarkable skills of fully trained detection dogs.