DfID leads way as government procurement via SMEs reaches 10.5%

In 2012-13 10.5% of central government expenditure, £4,577m, went to small and medium-sized enterprises (SMEs), according to Cabinet Office figures released last week – up from 6.5% in 2009-10.

By Joshua.Chambers

16 Aug 2013

The figures reveal that the Department for International Development leads the way in procuring through SMEs, while the Department for Energy and Climate Change buys the least from them.

The government wants to spend 25% via SMEs by 2015. Cabinet Office minister Chloe Smith said the latest figures “are encouraging, but clearly more needs to be done to reach our 25% aspiration.”

DfID channelled 32% of its procurement via SMEs in 2012-13, and aims to spend 35% by 2015. The department spending the second highest proportion through SMEs was the Ministry of Justice, which spent 31%. However, the MoJ’s spending has declined from 34% in 2011-12.

DECC spent 1.9% with SMEs in 2012-13, and has a target of spending 19% by 2015. The Home Office spent the second-lowest proportion on SMEs – 3.8% of its procurement. This figure has also declined since 2011-12, when it spent 6.4%. Both departments argue that significantly more of their spending benefits SMEs indirectly, mainly via subcontracting arrangements.

Meanwhile, last month the government launched its ‘Crown Commercial Service’. This involves further centralisation of departmental procurement under the Government Procurement Service, and introduces a new ‘Complex Transactions Team’ to work with departments on difficult procurements and thus reduce consultancy expenditure.

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