In 2012, the Government set itself and all public bodies an aspirational target to increase the proportion of spend with Small and Medium Enterprises (SMEs) to 25% by the end of the current Parliament.

This challenge was set to more accurately reflect the demographics of the UK business sector and to encourage public sector buyers to use companies best suited to deliver a project irrespective of their size.

Government required its Departments to contribute to this by setting individual targets. The NDA and its estate set a 20% target and developed an associated action plan, agreed by Baroness Verma, the DECC Parliamentary Under-Secretary who is responsible for the SME agenda as well as the NDA.

The Minister for the Cabinet Office, Francis Maude, recently announced that the Government had spent £11.4 billion with SMEs which equated to 26.1%. The announcement was supported by details which showed the individual performance by Department.

Ron Gorham, NDA’s SME Champion, who has participated in a number of Government events, said:

“The SME target was never about counting numbers better, but I am pleased to announce that the NDA estate has achieved over 21% spend with SMEs during this same period. This equates to over £330 million spent out of our total annual supply chain spend of £1.7 billion.

“Recognising that doing business with any large company is frequently challenging, we are now seeing the impact of a wide range of interventions intended to remove unnecessary blockers. We focus on ensuring that we enable companies, large and small, to be successful across our estate. To a large degree, the biggest challenge is an internal behavioural one for us and our Site Licence Companies (SLCs). The data suggests that we are making good progress, but there is still much left to do.”

Ron was speaking after attending a round-table discussion forum on SMEs with Cabinet Office Minister Francis Maude, government officials, a range of northern SMEs, Dragons’ Den business leader Piers Linney, plus public sector buyers and suppliers. The event, chaired by Sally Collier, Chief Executive of the Crown Commercial Service, highlighted a range of Government reforms aimed at supportinng SMEs.

The NDA and its SLCs have introduced a succession of measures in recent years to encourage a healthy supply chain, with a strong emphasis on SMEs. The measures include:

  • mandatory 30-day prompt payment requirement for all contractors and sub-contractors, introduced in 2013
  • the establishment of a national steering group for SMEs, supported by regional groups, to discuss and address issues facing smaller suppliers
  • use of the government’s single electronic portal for contract opportunities
  • launch of a mentoring scheme, last year, to enable smaller businesses to learn from the experience of business leaders
  • simplified contract requirements to make contracting for NDA and SLCs less onerous
  • an annual supply chain event, now the largest of its kind in Europe, which is free of charge to delegates and exhibitors

Discussions are already underway internally and across Government on how we enable more successful SME contracting under the next Parliament.

Further information

Central government spend with SMEs 2013 to 2014

Government spends £11.4 billion with SMEs

Contracts Finder website

Map and charts showing level of spend and location of SMEs working across the NDA Estate in 2014

NDA SME Action Plan 2014