A fifth of public sector organisations currently have no plans in place to work with more SMEs in 2022

A new report on public sector attitudes to spending with small and medium sized enterprises (SMEs) has found that close to a fifth, 18 per cent, of public sector organisations currently have no plans in place to work with more SMEs in 2022.

This is despite the Government’s pledge to increase local government spending with SMEs to 33 per cent by 2022, up from 26.7 per cent compared to the 2019/20 financial year.

While over three quarters, 79 per cent, of respondents from public sector organisations support the government spending pledge, just under half, 44 per cent, doubted the feasibility within the agreed timescales.

Sign up to our Business newsletter

A similar number of respondents shared that their organisation does not currently proactively approach SMEs with tender opportunities, 42 per cent. The majority of respondents who felt the SME spending target was deliverable currently sit within Central Government and Higher Education organisations, suggesting a potential disconnect at local government level.

Gavin Rimmington is head of public sector at YPO.

The report indicated that there are significant numbers of organisations and authorities who feel that there are barriers to working with SMEs.

For 64 per cent, SME bid and competition capabilities are a concern, and over two fifths, 42 per cent, named the ability to scale service delivery appropriately as a worry.

Two thirds, 32 per cent, listed risk management and a lack of confidence in SMEs as a barrier to working with them, whilst a similar number were upfront about preferring to work with well-known, established suppliers.

The publication of the report comes as part of Wakefield-based procurement company YPO and SME support service Go4Growth’s new partnership, which aims to raise awareness and knowledge of public sector procurement contracts to SMEs.

Gavin Rimmington, head of public sector at YPO, said: “This report shows that there is an overwhelming majority within the public sector who wish to work closely with SMEs, which is a positive step for the sector and a vote of confidence for the future.

“We’ve seen first hand the benefits that can be had. For example, whilst public sector organisations might have concerns around scalability, they may not have considered this in line with the flexibility of a dynamic purchasing system and working with multiple SMEs in a coordinated approach.”