But little sign of hitting the target of 33% of Government spend with SME’s by 2022

It is difficult to be churlish when the Government spent another £1.1Bn with SME’s in 2017/18, or is it?

We are clearly moving in the right direction, but it is unclear how much of this increase in spend is an actual increase and how much is simply better data collection. It was a pretty shocking statistic that in the previous year 2016/17, the Cabinet Office and CCS only managed to capture information from 35% of total Government spend. This throws huge caution on the accuracy of the numbers for 2016/17. We will never be able to examine 100% of Government spend and the increase to 72% analysed in 2017/18 is a massive step forward. We must not underestimate the huge amount of work that must have gone into achieving this result.

The target is to have 33% of spend with SME’s by 2022. As we have now reached the dizzy height of 23.7% it looks an increasingly impossible target without big changes. The problems are highlighted in the table below …

Department

Total Procurement  Spend  (£m)

% of Total Spend

CUM % of Total Spend

33% TARGET SPEND

2017/18 spend with SME’s

Shortfall against 33% target

MOD (1)

£20,158

38.6%

38.6%

£6,652.14

£3,318.00

£3,334.14

DFT (1)

£11,672

22.4%

61.0%

£3,851.76

£3,652.00

£199.76

MOJ

£4,915

9.4%

70.4%

£1,621.95

£1,528.00

£93.95

DWP (1)

£2,669

5.1%

75.5%

£880.77

£410.00

£470.77

DHSC

£2,443

4.7%

80.2%

£806.19

£536.00

£270.19

HO (1)

£2,109

4.0%

84.2%

£695.97

£543.00

£152.97

NDA (2)

£1,696

3.2%

87.5%

£559.68

£486.00

£73.68

HMRC (1)

£1,470

2.8%

90.3%

£485.10

£283.00

£202.10

DFID (1)

£1,262

2.4%

92.7%

£416.46

£542.00

-£125.54

BEIS

£1,232

2.4%

95.1%

£406.56

£411.00

-£4.44

DEFRA

£1,033

2.0%

97.1%

£340.89

£271.00

£69.89

DFE

£523

1.0%

98.1%

£172.59

£124.00

£48.59

DCMS

£353

0.7%

98.7%

£116.49

£163.00

-£46.51

FCO

£230

0.4%

99.2%

£75.90

£36.00

£39.90

CO (1)

£192

0.4%

99.5%

£63.36

£41.00

£22.36

MHCLG

£156

0.3%

99.8%

£51.48

£36.00

£15.48

HMT (1)

£78

0.1%

100.0%

£25.74

£11.00

£14.74

Total

£52,192

£17,223.03

£12,391.00

£4,832.03

 

Spend with SME’s is currently £4.832Bn below the 33% target and the MoD represents £3.334Bn of that shortfall. The top 6 highest spending departments represent 84.2% of the total, so, the efforts must be targeted there, or the target will be mathematically impossible to achieve.

The good news is that 2 departments; DFID and DCMS are already beating the 33% target of spend with SME’s. so, it is clearly possible.

 

The biggest issue can probably be summarised as “SME’s don’t make battleships”.