Government doubles SMB IT spend target

Smaller suppliers promised at least a quarter of government megadeals too

At least half of new government IT spending will go through small businesses, the Cabinet Office has promised, as part of its efforts to level the playing field for suppliers.

In the Making Government Business More Accessible to SMEs: Two Years On report, the previous target of 25 per cent was doubled as the government pledged to break the monopoly big firms have over government business.

In exceptional cases in which large IT contracts are required, at least 25 per cent of the deals will go to smaller suppliers, the report added.

"All new digital spend will be channelled through the proposed Digital Services Framework, which goes live late summer 2013," said the report. "It will provide government with access to agile product and software development services throughout the UK.

"Although open to all providers of agile product and software development services, it will be particularly attractive to SMEs given its low barrier to entry and the requirement for departments to break work packages into smaller lots."

Chloe Smith, minister for political and constitutional reform, described SMBs as a "crucial engine" for the country's growth, but admitted that they have been historically shut out of government business.

"Smaller firms have found bidding for public sector work excessively bureaucratic, time-consuming and expensive," Smith conceded. "This meant that the taxpayer has not always benefited from some of the best and most cost-effective ideas that SMEs are capable of delivering."

The report claimed some 99.9 per cent of the UK's 4.5 million business are SMBs, which combined are responsible for turnover of £1,500bn and 14 million private sector jobs.