Government blasted as SMBs still left out of ICT procurement

New report claims only 10 per cent of government spending goes through SMBs - way off 2015's 25 per cent target

A new report has slammed the government for not putting enough ICT business through SMBs, and claims it is "a long way off" its 2015 target.

The Public Accounts Committee's (PAC) Improving Government Procurement and ICT Savings report said the government "has not yet done enough" to provide greater opportunities for SMBs to win government business.

By 2015, the government aims to spend 25 per cent of its procurement budget with small businesses, but PAC said current data puts the figure at just 10 per cent. The PAC also pointed to "major gaps" in SMB data which said the exact amount of spending through small firms cannot be confirmed.

Last month, in its Making Government Business More Accessible to SMEs report, the government doubled its SMB spending target for new IT business to 50 per cent, but did not put a time limit on the aim.

"Recent large government procurements have had negative consequences for SMEs," said the PAC report. "The Cabinet Office should develop a detailed strategy for how it intends to increase government spending with SMEs, including which services could and should be provided by small businesses, and how the data collected on SMEs can be made more robust."

Central government spent £6.9bn on ICT in the 2011/12 year – 15 per cent of its total £45bn spend on goods and services over the same period.

Elsewhere in its report, PAC pointed out issues with accountability structures within centralised ICT procurement and said the government still lacks the capability to effectively commission ICT services too.

Despite blasting several elements of government ICT procurement, PAC did praise some of the progress made so far.

"We... recognise the recent progress made by the Cabinet Office, the Government Procurement Service and departments," it said.

"The changes are beginning to have an impact: the proportion of spending that goes through central contracts has increased steadily; the ICT initiatives have resulted in some savings; and there are signs that departments are starting to think more intelligently about why and how they use ICT.

"[But] there are still weaknesses which will need to be addressed if the government wants to improve value for money in the long term."