techUK's response to the publication of the Ministry of Defence's SME Action Plan
In March the Ministry of Defence confirmed a new total SME spend target of £7.5bn (an increase of £2.5bn a year) by May 2028. Its plan to deliver that hugely ambitious goal - in the 22 months remaining - in the form of the long-awaited SME Action Plan, was published last week.
The prelude to the Plan was the creation of The Office for Small Business Growth formally stood up in January this year with a contact centre, anonymous helpline, and website providing guidance for new market entrants and others, along with the SME Commercial Pathway to guide MOD staff through the procurement process.
Much of the Plan itself restates the MOD’s commitment to improving (success of the SDR and DIP ‘hinge[s] on how we better support SMEs’), collates useful (albeit already available) information about how to engage with the department, and positive case studies of SME involvement in defence.
Actions and milestones
The section that matters is Actions and Milestones: ongoing and then planned activities each with intended starting dates.
It will continue to promote a ‘Think-SME’ culture across the whole of the MOD working with partners such as UKDI and Dstl, making it simpler for SMEs to get tailored support and use ‘governance forums’ to hold senior leaders to account, ensuring constructive feedback on failed bids, and improving poorly written requirements. It will ‘represent the voice of SMEs in the new Defence Reform model ways of working including early market engagement and requirement setting’ while ensuring ‘close alignment with the needs of our Armed Forces’.
It then sets out the activities it will undertake at different starting points across the next 12 months including:
Starting Q1
Reduce bureaucracy for SMEs such as ‘repeating inputs across different platforms and portals, or disproportionate terms and conditions in contracts’.
Set ‘internal spending targets across all portfolios… assisting internal teams to reach these targets and hold poor performance at senior leadership levels to account’.
In support of the upcoming Defence Finance and Investment Strategy, ‘identify ways to make it easier for the financial sector to back defence SMEs, with additional clarity that ESG regulations do not hinder defence finance or investment'.
Starting Q2
Produce a simple, publicly available guide mapping ‘entry points, portals and marketplaces’ and ‘consider consolidation or cross-platform sign-on’
Improve ‘reporting tools for tracking sector growth and SME spend’
Establish a ‘Strategic Partners and Suppliers pledge’ to ‘align relevant action plans, spend projections, and SME support to work collaboratively for the ecosystem rather than in silos’
‘Encourage and promote’ initiatives which benefit both SMEs and ‘the needs of the partner or supplier, such as joint R&D projects, skills and apprenticeship programmes, or dedicated resources’
Starting Q3
Review how the MOD approaches policies such as ‘social value, offsets, consortia bids and open frameworks, ensuring that SME views and needs are heard’.
Work to help ‘re-invigorate and expand the SME Champions network’ within strategic partners ‘to embed positive behaviours in their respective organisations’ and ‘ensure the right data is captured and acted upon… to achieve our shared goals’
techUK's assessment
All these planned actions are to be welcomed and reflect the recommendations techUK made in its submissions to both the Strategic Defence Review and Defence Industrial Strategy, with the one exception of having set clear, quantifiable KPIs alongside each activity. Only one of the commitments has a target due date. This is frustrating.
The Plan states that by the end of Q4 it will provide “a series of digital tools through our website to facilitate self-help or out-of-hours assistance, alongside routinely updated written guidance”. However, given the scale of the challenge, this timetable could leave industry only 14 months to make use of them.
On top of this, the Plan speaks purely in terms of ‘we’ with no activity assigned a specific owner, (again, as with the DIS and 2022 Plan) despite the role that multiple teams and NAD (National Armaments Director) leadership will inevitably have to play in ensuring delivery, such as setting spending targets for individual portfolios.
What needs to happen next
techUK is hugely supportive of The Office for Small Business Growth but it will require far greater capacity than it currently has, driven by political buy-in from the very top of the MOD to force through the change it is expected to deliver. The MOD needs to urgently review the Plan’s activities and where appropriate assign responsibility across the NAD leadership group with deadlines for delivery, demonstrating this is a whole of Defence Enterprise priority.
