Refocusing on the Role of SMEs in Delivering Government Transformation

As part of techUK’s SME Campaign Week, we wanted to look at the barriers that SMEs face in accessing the public sector market, and the fundamental part they play in the transformation and delivery of public services.

In August 2015, the Cabinet Office and the Crown Commercial Service announced with great fanfare an ambitious target that £1 in every £3 that the government spends will be with small businesses by 2020.

Matt Hancock, the Minister for the Cabinet Office, said: “This is such an amazing opportunity for the country’s diverse and innovative small businesses, and today I urge them to get stuck in. From computers to uniforms – there are so many opportunities for small businesses to work with us, and I want to see more of them providing value for money for the taxpayer and benefiting from our spending.”

From one perspective, a great deal has been achieved in seeking to meet this target. Many UK tech SMEs are capitalising in particular on the opportunities provided by the G-Cloud framework to compete on equal terms with larger suppliers, and being more agile and innovative than their larger counterparts, to provide greater value to the taxpayer. On the surface, this would appear an ideal win-win scenario.

Unfortunately, there is much anecdotal evidence that things are working out far less well for many SMEs. Key figures such as Baroness Lane-Fox, the architect of GDS, and Lord Maude, its greatest champion, have recently been outspoken about the state of the UK government’s digital transformation and reform agenda, indicating that something may well be amiss. A critical part of the reform agenda, exiting legacy IT contracts and breaking the cycle of big government contracts, was always going to be a massive challenge, despite the ambitious SME target. And Brexit has complicated matters, with the Financial Times recently reporting that “there are hundreds of contracts expiring this year that are being renewed because civil servants are too busy with Brexit to focus on new and better-value tenders.”

Where Next for SMEs?

Let us not forget that it is the SME’s agility and their ability to innovate and drive value that is the critical driver behind the SME agenda. As John Manzoni, Chief Executive of the Civil Service said at the time of the SME announcement: “Further opening up our marketplace to small businesses is good economic sense all round – making it easier for them to access and win government business opportunities, whilst encouraging increased competition and market innovation to deliver best value for the taxpayer.”

Let’s hope that they find a way to refocus on the SME agenda and fully capitalize the value that SME’s can provide.

Complete techUK's SME Survey here and help us make the case on your behalf.


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