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By | Kat Hall 18th May 2016 08:03

Remember when gov.uk said it would give big biz contracts to SMEs?

'It cannot be certain' spending has increased at ALL – NAO

The Cabinet Office has lost its enthusiasm for prising open Whitehall's wallet and handing more cash to SMEs, according to a report by the Committee of Public Accounts today.

Back in 2010, the government pledged to carve off 25 per cent of its £45bn spend in goods and services to small businesses.

But today the committee said: "It is not clear that SMEs are better able to compete with larger providers or whether they are actually getting any more government business than before.”

In 2014/15 the government claimed the scheme had been a huge success, reporting that 27 per cent of its total procurement spending had reached SMEs: £4.9bn through direct contracts with SMEs and a further £7.3bn indirectly to SME subcontractors.

However, those stats have been torn apart by the National Audit Office, which said "it cannot be certain" spending increased at all over that period.

Indeed, government figures shared with The Register showed that in 2014/15 central government splashed £6.3bn with IT suppliers for the year 2014/15 – with 42 per cent going to just three suppliers.

"We continue to see larger providers dominating; for example, the Government’s top five IT providers received over half of government’s total spending on contracted out IT," said the report.

Meg Hillier MP, chair of the PAC, said today: “We are sceptical about just how much progress has been made on increasing spending with SMEs.

“The fact the government has changed its approach to measuring such spending in four of the last five years makes it impossible to properly assess performance.

“The government has now committed to an ambitious, higher target for SME spending and there is clearly work to be done if that target is to be achieved. It’s a simple point, but launching initiatives is not the same as delivering results."

The government has failed to identify the areas of spending where SMEs could bring the most benefit and it remains difficult for SMEs to ascertain what bidding opportunities are available, said the report.

In August 2015, the Cabinet Office increased the target for SME spending from 25 per cent to 33 per cent by 2020 as a result of a manifesto commitment.

"The Cabinet Office needs to provide clear leadership to departments and convince us that achieving the higher target of 33 per cent by 2020 is indeed a priority objective across government," said the report.

The report was positive about the G-Cloud but said it needs to have "further reach and there must be an attitude change in Whitehall for SMEs to get the chance to contribute more".

Around 51 per cent of the £1bn of G-Cloud sales has gone to SMEs. However, the Cabinet Office acknowledged that total spend through G-Cloud represents “between 5 per cent and 7 per cent of the IT contracts, so there is a long way to go”. ®

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