Whitehall to spend more with SMEs, Hancock announces

27 Aug 15

Cabinet Office minister Matt Hancock has set a cross-government target for one third of all Whitehall spending to be with small businesses by the end of the parliament.

Setting out the aim today, Hancock said in 2013/14, central government spent £11.4bn with small- and medium-sized businesses – those with up to 250 employees – equivalent to 26% of all central government spend.

Increasing this to a third would mean an extra £3bn per year going to SMEs either directly or through the supply chain, he said.

The target is part of a series of procurement reforms being made by government, which also include requiring the entire public sector supply chain to be paid within 30 days and publishing all contracts on a Contracts Finder website.

Hancock said the target represented “an amazing opportunity for the country’s diverse and innovative small businesses”.

He added: “From computers to uniforms – there are so many opportunities for small businesses to work with us, and I want to see more of them providing value for money for the taxpayer and benefiting from our spending.”

Each Whitehall department and the Crown Commercial Service will now develop individual plans to meet the target over the next five years.

John Allan, the national chair of the Federation of Small Businesses, welcomed the target, stating the public sector had much to gain from opening up public procurement to smaller businesses.

“To meet it, the government will need to focus on robust monitoring and challenge of poor practices wherever they are found,” he added.

“The FSB will play its part, and will work with ministers on this important goal.”

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