£1.3Bn more spent with SME’s in 2017/18

The SME Spend data for 2017/18 was uploaded to https://www.gov.uk/government/publications/central-government-spend-with-smes-2017-to-2018 in early May 2019.

 

Andrew Williams recently joined the Cabinet Office as Deputy Director, Small Business & Domestic Policy and his team has responsibility for the SME target. Andrew explained some of the changes and highlights of this year’s spend information.

 

For 2017/18 we asked that departments survey their own supply-chains to capture indirect spend with SMEs (previously this was collected centrally by Crown Commercial Service). This was successful and we managed to capture much more data from suppliers. In total we captured data for 72% of total procurement spend, which is an impressive increase on previous years, which averaged about 35%.

 

Some departments did better than others but for those with very high response rates from providers, we were able to use these high confidence levels to extrapolate across a greater amount of spend and give us a more complete picture. We have presented this information in the data tables we publish in order to be fully transparent.

 

In summary, the 2017/18 figures for spend with SMEs show an increase on the previous year, with 23.7% being spent with these businesses (up 1.2% percentage points).

 

They also show that the spend with SMEs is £12.4bn (compared to £11.1bn in 16/17)

 

  • Direct spend with SMEs was £5.4bn (compared to £5.2bn in 16/17).
  • Government’s indirect spend with small businesses through the supply chain was £6.9bn (compared to £5.9bn in 16/17).
  • Most departments increased spend with SMEs as a proportion of their total procurement spend in 2017/18, but some departments reported a fall in spend with SMEs.
  • Total procurement spend has also increased, meaning that percentage points have remained consistent for the direct spend.
  • The MoD which has the largest spend increased direct spending with SMEs by £118m from 3.7% to 4.1% and indirect spend by £600m, this is a positive step in a challenging category of spend and highlights the work being undertaken by the department to focus on early market engagement amongst other initiatives.

 

The key success this year for me is capturing a significantly higher proportion of indirect spend data which allows us to do more analysis of trends and provides a more in depth look into categories of spend. Using this data, we plan to work on strategies for further increasing department’s spend and work with them to deliver their SME action plans. I look forward to working with you on the SME agenda over the coming months.

 

Look out for our second blog on this subject where our Commercial and SME Director Ian Fishwick analyses the numbers in more detail.