Local councils and other public sector bodies have spent £1.2bn with SMEs on cloud and digital services since 2012, new figures reveal.

This means almost half of digital spend — £1.39 in every £3 — is going to small and medium-sized enterprises, the Government statistics show.

This has been done via the Government’s Digital Marketplace which was designed to make Government procurement easier and more transparent.

Derby City Council was one authority which made savings through the GDM. They saved the equivalent amount needed to repair 150 road potholes by switching their suppliers from a large multinational to a Stafford-based SME.

‘Small businesses have an important role to play in helping Government to spend taxpayers’ money wisely,’ said Caroline Nokes, minister for government resilience and efficiency.

‘That is why we continue to find ways of improving how the public sector, schools and hospitals, for example, puts money back into services for those they look after. 

‘The money saved in Derby is a good example of how smart procurement can make a real difference to people’s lives.’

Warren Smith, director of the Digital Marketplace, said: ‘We are continually focused on breaking down the barriers to entry for SMEs to do business with government, for example, by simplifying the application process. 

‘We are also breaking down the traditionally large contracts into smaller ones, which favour a more diverse range of suppliers and help Government to buy services more efficiently.’

Despite these new findings, a recent report from the Federation of Small Businesses (FSB) found that just 23% of SMEs had worked for the public sector over the last twelve months — down two percentage points from 2014.

It also warned the Government was going to struggle to meet its target of increasing procurement spend with SMEs to 33% by 2020.