A new SME Action Plan has been launched to unlock opportunities for smaller businesses to access government contracts.
Under the plan, the government has set a target for £1 in every £3 it spends to be with smaller businesses by 2022. It means that by then, the Department for Business, Energy and Industrial Strategy (BEIS) will have spent an extra £35 million with UK small and medium-sized businesses.
"The UK's 5.7 million SMEs make a massive contribution to the economy. These businesses may be small but their impact is huge, employing 16 million people and accounting for £1.9 trillion of turnover," said small business minister Kelly Tolhurst.
"Key to their continued success is ensuring the government is open and transparent in its procurement processes, giving smaller businesses every opportunity to bid for and win contracts … One important measure we will introduce is to require BEIS Group's biggest suppliers to monitor and report SME spend in their supply chain arising from BEIS contracts."
The plan will also require the government's large suppliers to advertise their sub-contracting opportunities on Contracts Finder.
The SME Action Plan has been welcomed by the National Enterprise Network. Alex Till, chair of the National Enterprise Network, said: "Making more local government contracts available to small business is hugely welcome, and the commitment to ensure £1 in every £3 will be spent with small businesses by 2022 is a good target."
However, he added: "Many small businesses … do not have the time and skills to complete the complex paperwork associated with government procurement and simply find themselves at the end of an unprofitable sub-contract. We will be relying on the government to simplify the paperwork as a key part of the SME Action Plan."
Written by Rachel Miller.