Question to the Cabinet Office:

To ask the Minister for the Cabinet Office, what changes he plans to make to rules governing SME procurement in public contracts, in the context of the Spring Statement 2025.

This Government is taking major steps to give SMEs greater access to public contracts - including the publication of the National Procurement Policy Statement (NPPS) which sets out a mission-led procurement regime focused on driving economic growth that supports Small and Medium-sized Enterprises (SMEs) and Voluntary, Community and Social Enterprise (VCSEs), giving them greater opportunities to win public contracts by instructing contracting authorities to maximise their spend with these organisations. To support implementation of the NPPS in central government, we have announced new rules requiring all government departments and their executive agencies and non-departmental public bodies to set three-year targets for direct spend with SMEs from 1 April 2025, and from 1 April 2026 for VCSEs, and publish progress annually.

We will be consulting on more reforms including a requirement for large contracting authorities to publish their three-year targets for small business and social enterprise spend and report on this annually - as well as the exclusion of suppliers from contracts worth more than £5million if they don’t complete prompt payments of invoices.

In the Spring Statement, the Chancellor also announced measures to reform our procurement system to give small businesses across the UK better access to Ministry of Defence contracts.