Departments urged to follow DfT in devoting more budget to small businesses

Federation of Small Businesses warns against “mega contracts” as Department for Transport says it’s on track to meet procurement targets

DfT has handed out grants to small businesses, including one developing a system to encourage uptake of electric taxis. Credit: Matt Alexander/PA

By Mark Smulian

08 Aug 2018

The Department for Transport has said is on course to meet the government target to devote one third of its procurement budget to small and medium-sized enterprises (SMEs) by 2022.

In its SME Action Plan the DfT said it spent 29.9% with SMEs in 2016, against a 24% target, the bulk of this through executive agencies and arms’-length bodies.

The Federation of Small Businesses (FSB) urged other departments to follow its example, warning it would be “a failure of government” not to.


As part of its efforts to encourage SMEs, the department has also awarded £700,000 in Transport Technology Research Innovation Grants to support innovative transport projects, with SMEs taking 14 of the 23 awards made.

These included a system to encourage uptake of electric taxis by providing live information on charge points for them, an app named Signly that improves communication for passengers who use sign language, and software to improve the use of airspace.

Transport minister Jo Johnson said: “With this new action plan, we are leading by example by making it easier for these businesses to bid for contracts, and we will continue to support them over the coming years.”

Martin McTague, policy chair at the FSB, said: “Any failure to make proper use of small business is a failure of government, and there's still a lot of work to do.

“We are pushing to see some healthy competition between all government departments, as to who can best use the talents and expertise of the UK's small business community, rather than increasing risk Carillion-style by awarding a handful of mega contracts to few massive corporations.”

Mr McTague added that other departments “must follow the Department for Transport's pledge to ensure that more small firms are given the chance to secure opportunities [but] DfT should not consider this ‘job done’, but instead as the next step in a process that needs to get ever faster and more attuned to the needs of small business”.

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