Despite meeting its 2010 commitment for 25% of government procurement spending to reach small and medium-sized enterprises (SMEs) by 2015, the government have failed to make sufficient progress to achieve the next goal of 33%, according to the Public Accounts Committee (PAC).
The PAC published its latest report, ‘Government spending with small and medium-sized enterprises‘ this week, and says that SMEs are yet to relaise fully the benefits of revised government procurement targets.
“We continue to see larger providers dominating; for example, the government’s top five IT providers received over half of government’s total spending on contracted out IT,” the authors said.
Committee chair Meg Hillier 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.”
In 2014, cabinet minister Francis Maude said 25% of government contracts should be awarded to SMEs, which equated to some £50bn of deals.
‘Efforts have lost momentum’
The report goes on to say the campaign has lost momentum, and calls on government departments to re0-invigorate the efforts to reach out to SMEs and encourage them to bid for government contracts.
“The Cabinet Office and the CCS should set out how it is going to make it easier for SMEs to be aware of all direct contracting opportunities, subcontracting opportunities, awarded contracts and what opportunities may be in the pipeline
There has also been limited progress on efforts to set up an SME panel to advise on how government contracts can be funnelled to SMEs, with posts on the panel still vacant. The report says: “We were not given any convincing reasons for the delay in filling these positions; the CCS [Crown Commercial Service] has taken six months to refine the SME crown representative job description but could not explain what had actually changed as a result.”
‘We want to go further’
Responding to the Cabinet Office spokesperson told Public Technology: “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.”
In February it was revealed that half of the £1bn in government procurement contracts awarded through its digital marketplace had gone to SMEs.