In 2024, only 20% of public sector procurement spending was directed toward SMEs, even though absolute spending rose to £45.4 billion, according to the British Chambers of Commerce's latest report. The data reveals consistent stagnation in the SME spending proportion since 2019. Despite the overall growth in public spending, only local governments demonstrated notable engagement with SMEs, accounting for 35% of their total procurement spend. The implementation of the Procurement Act may influence future trends by mandating direct spend targets for SMEs in government agencies.
Only 20% of public sector procurement spending went to SMEs in 2024, despite total spending with SMEs increasing to £45.4b from £42.4b in 2023.
Local government spent the most with SMEs, contributing 35% to total procurement, while central government recorded only 11%, highlighting inconsistency across sectors.
The report underscores the stagnation in the proportion of spending with SMEs since 2019, signaling ongoing challenges despite total spending increases.
With the Procurement Act now in force, there is an explicit requirement for government bodies to set and publish targets for SME procurement.
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