SMEs: Public Sector Procurement

7. What steps his Department is taking to improve access to public sector procurement processes for small and medium-sized businesses.

12. What steps his Department is taking to improve access to public sector procurement processes for small and medium-sized businesses.

The landmark Procurement Act 2023, which this Government passed last year, will deliver simpler and more effective public sector procurement and help small and medium-sized enterprises across the country secure a greater share of that expenditure, which totals approximately £300 billion every year. The Act includes a new duty on contracting authorities to have regard for the particular barriers faced by SMEs and consider what can be done to overcome them.

Small businesses are the lifeblood of our economy. There are 5.5 million of them in the UK, making up over 99% of all businesses and 61% of private sector employment. However, currently only a fraction of 1% offer their goods and services to the public sector. Could the Minister say a little more about the work that is being done to encourage more of them to enter tender processes?

I would be delighted to, because the Government are entirely committed to ensuring that SMEs get a bigger share of that pie. The latest published SME spend figures show that UK small businesses received £21 billion of work, which was an increase of £1.7 billion on the previous year’s figures. That is the highest since records began, and the fifth consecutive year that Government work won by small businesses has increased. Crucially, that is before the effects of the Procurement Act kick in.

As my hon. Friend has said in his reply, the Procurement Act is I hope the solution to many of these problems, but it is not due to come into force until the beginning of October. Can he confirm that it will definitely come into force then, and that the necessary secondary legislation is in hand?

I am pleased to be able to report that, despite the fact that this is complex legislation that requires workstreams in a number of areas—not just secondary legislation, but learning and development for those working for contracting authorities, and a new online platform that will make procurement much easier and better for both those supplying services and those procuring them—we are on track to meet our targets.