Question to the Cabinet Office:

To ask the Minister for the Cabinet Office, what steps he is taking to increase the proportion of public procurement contracts awarded to small and medium sized businesses.

The Government is determined to ensure the £385 billion of public money spent on public procurement annually, delivers economic growth and supports small businesses. For too long, small and medium-sized enterprises (SMEs) and voluntary, community and social enterprises (VCSEs) have been held back by government procurement processes that are too slow, bureaucratic, and difficult to navigate.

The National Procurement Policy Statement (NPPS) sets out the Government’s strategic priorities for public procurement and builds on measures in the Procurement Act including an expectation for all public bodies to maximise procurement spend with SMEs and VCSEs.

In central government, we have also announced new rules to drive greater transparency and accountability for increasing numbers of SMEs and VCSEs delivering public contracts. From 1 April 2025 central government departments must set three-year targets for direct spend with SMEs, and from 1 April 2026 for VCSEs, and to publish progress annually.

The Government will consult on further reforms to our public procurement processes to drive economic growth, support small businesses, and better support innovation.