Smaller businesses are securing more government contracts, report confirms

28th February 2013 | News

Smaller businesses in the UK have seen an increase in the value of the government business they have managed to secure, a new report has confirmed.

The figures, published yesterday (February 27th), serve to reinforce the idea that helping smaller suppliers to compete for business in the public sector boosts wider economic growth.

One of the coalition's stated ambitions is to see 25 per cent of government spend flow to smaller businesses, directly and through the supply chain, by the end of the current parliament in 2015.

This would represent a substantial increase from 2009-10, when a mere 6.5 per cent of government spend went to smaller businesses.

What's more, the new figures confirm that direct spend has risen from £3.2 billion (6.8 per cent) in 2010-11 to £4.4 billion (ten per cent) in 2011/12.

Reflecting on the latest data, Cabinet Office Minister Chloe Smith said that smaller businesses are a key driver for the country's economic growth.

In the past, however, it was far too difficult for them to win business with government "because of unnecessary and bureaucratic procurement procedures".

"We are working to change all that and ensuring every department has actions in place to increase smaller businesses' spend, even though we are spending less overall," she commented.

"We still have a long way to go, but it's extremely encouraging to see how our work has increased the amount of business we’re doing with smaller businesses through both direct and indirect contracts."

This comes shortly after a survey of business leaders called on the government to offer further support to encourage growth.

Indeed, the UK SME Business Outlook Survey found that 60 per cent of small company owners are looking for further government tax initiatives this year.

It also revealed that business leaders are eager to see the coalition reduce regulations in a bid to stimulate economic growth.

Posted by Jacob Williams