Small and Medium-sized Enterprises: Public Procurement Contracts

Debate between Lord Callanan and Lord Choudrey

Monday 7th September 2020 Lords Chamber

[Lord Choudrey]

To ask Her Majesty’s Government what steps they are taking to ensure that small and medium-sized enterprises are awarded public procurement contracts.

[The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Callanan) (Con)]

My Lords, the Government are determined to ensure that SMEs win public contracts when they offer good value for money. We are committed to tackling the barriers that SMEs face. Each department publishes an SME action plan setting out its commercial strategy to increase spending with smaller businesses. Central government spend figures published for 2018-19 show that SMEs earned £14.2 billion through government contracts. That is nearly £2 billion more than the previous year and the highest since government records began in 2013.

[Lord Choudrey (Con) [V]]

I thank the Minister for that Answer. SMEs account for 98% of the UK’s business population. The Government are prudently seeking to enhance their engagement with the SME sector. In that regard, the Government’s own target for spending with SMEs is 33% by the end of 2022. As we go through one of the worst recessions in our country’s history, there will be a greater desire to achieve economies of scale through higher aggregation of demand in the form of centralised procurement, potentially at the cost of SME participation. However, we know that the SMEs are incredibly innovative and efficient. When given the opportunity, they would be able to drive national economic growth and prosperity. The Government must therefore harness their true potential and ensure that the SMEs are able to play a vital role in the procurement framework and are not left out of the national strategies. Government departments will need to listen to SMEs’ concerns and find solutions without compromising delivery and value for the taxpayer.

[Lord Callanan (Con)]

Each government department publishes its own SME action plan, which describes how it is engaging better with the SME sector to address the department’s own needs and increase spend with SMEs. Particular departments hold early-market engagement events to explain and discuss their requirements with a wide range of suppliers.