Local government spends more of its procurement budget with SMEs than central government or the NHS, new research has revealed.
The report, published by the British Chambers of Commerce (BCC) in partnership with Tussell, shows local government bodies spent 38% of their overall procurement budgets directly with SMEs in 2021.
This compares to 22% for NHS bodies across England and only 11% for central government.
The report also shows that SMEs are now receiving a smaller amount of direct government procurement spending than they were five years ago. In 2016, a quarter of procurement spending was awarded directly to SMEs but this has fallen to 21% in 2021.
Alex Veitch, director of policy and public affairs at the BCC, said: ‘While gradual improvements have been made in recent years, our tracker shows that further change is still required to unlock the public sector’s access to SMEs’ innovation and creativity.
’It is disheartening to see that as the level of public sector procurement spending grew over the past few years, the proportion of spending awarded directly to SMEs did not.
’We welcome the Government’s Procurement Bill which we hope will create a simpler, more flexible system which should accelerate Government spending with SMEs. However, business will not see the benefit of this until 2023.’
