Question to the Ministry of Defence:

To ask the Secretary of State for Defence, whether his Department is taking steps to increase the proportion of defence spending that goes to small firms.

The Ministry of Defence (MOD) recognises that small and medium-sized enterprises (SMEs) are a crucial engine for growth and innovation in this country. In 2014-15, the MOD spent almost £4 billion both directly and indirectly with SMEs, equating to around 19.4 per cent of our procurement spend.

We are taking steps to increase the proportion of defence spending with smaller companies and have committed to ensuring that 25 per cent of our procurement spend, both direct and indirect, is with SMEs by 2020. To help achieve this challenging goal, the MOD last month refreshed its SME policy, reflecting three core objectives:

• Engaging throughout the supply chain, not just with direct contractors;
• Reducing bureaucracy associated with procurement; and
• Making engagement more simple and straightforward.

The refreshed SME policy can be found on gov.uk at: https://www.gov.uk/government/publications/mod-policy-for-small-and-medium-enterprises.