More small firms landing Government contracts than at any other time

24th May 2018

The number of small businesses across the UK who are securing Government contracts is now at its highest level than at any other time, according to new research.

Tussell, a data provider of Government procurement information, has confirmed more than 14,000 different small and medium-sized enterprises (SMEs) were awarded Government contracts in 2017.

In a market said to be worth £223 billion in 2017, Tussell’s recent research suggests small firms are now in good shape to take advantage of the commercial opportunities within Government procurement.

The Government has pledged to spend £1 in every £3 with the UK’s small business community by 2022. There was a marked year-on-year increase in the number of SME contracts awarded per month. Some 1,746 small firms secured Government work each month on average in 2017, compared with a monthly average of 1,577 in the previous year.

Furthermore, 62% of all 23,100 suppliers that won Government contracts in 2017 were small businesses.

Gus Tugendhat, founder, Tussell, said: “There is currently a false perception that Government contracts are restricted to a small, closed group of large suppliers.

“Tussell’s data reveals that progress is being made on widening the base of SMEs in the Government’s supply chain.

“This is crucial to the Government’s pledge to spend £1 in every £3 with SMEs by 2022.

“Despite these positive steps that public procurement is becoming more accessible to SMEs, the Government must now make sure that winning contracts translates into revenue for SMEs.”

It is local government that appears to be blazing a trail for SME procurement, with 52% of small firms securing contracts in public procurement last year doing so from local government buyers.

London-based small firms secured more Government contracts in 2017 than those based anywhere else in the UK. 2,000 small businesses based in the capital shared almost 4,500 contracts last year.

Nevertheless, small firms in Scotland and the north-east of England experienced the most considerable Government contract growth out of all UK regions, with the north-east of England reporting a 17% year-on-year increase, closely followed by Scotland (14%).

Construction remains a key component of Government work for small businesses, making up more than two-thirds (68%) of the Government’s construction suppliers.

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