Small businesses are set to receive more than £7.4 billion a year from government spending by 2028.
New targets will see UK Government departments spending more money with small and medium sized businesses. For the first time, departments have individually set direct SME spending targets and will publish yearly progress updates.
The UK Government said that while the targets are for direct spending, billions more also goes through supply chains, meaning the overall amount for small businesses is likely to be even higher.
Cabinet Office Minister, Chris Ward said:
“These ambitious spending targets will help ensure more government contracts go to SMEs – keeping more money, jobs and opportunities in local communities. This will make a real difference – and is a statement of intent that this Government will pull every lever to support SMEs and drive growth.”
Policy Chair at the Federation of Small Businesses (FSB), Tina McKenzie said:
“Understanding exactly how much central government spends directly with small businesses is essential for holding departments to account.
“The decline in direct SME spend since 2022 shows exactly why these targets matter – as well as the scale of the task ahead. It’s important that this announcement is a starting point for more ambitious future spending commitments for 2028 and beyond, particularly as overall spend among the biggest government departments like health, defence and education, is set to rise.”
Targets set across government include 40% from DSIT, 33% from DCMS and 30% from Cabinet Office, with nearly half of departments setting a target of above 20%.
Full details of the Departmental Small Business Procurement Targets are on GOV.UK.
