Government spend with small businesses hits record high

More than £14bn spent by the government with SMEs last year, according to Cabinet Office

The UK government has spent a record £14.2bn with SMEs over the 2018 and 2019 year, according to data from the Cabinet Office.

This figure is £1.8bn more than the previous year and is the highest since government records began in 2013.

Oliver Dowden, Cabinet Office minister, welcomed the news and said such investment creates more opportunities in the wake of Brexit.

"We're committed to using the power of government spending to support small businesses across the country and this is something I've championed in my time as a minister - so it's great to see these figures heading in the right direction," he stated.

"As we leave the EU we can create more opportunities for small businesses to win government business - boosting growth, employment and innovation."

Government initiatives such as G-Cloud have boosted this spend, with the eleventh iteration last year seeing 700 suppliers added to the framework, with the increased number of small businesses on it championed by Crown Commercial Service (CCS).

However, data collected by CCS last year showed that SMEs struggle to win business on the cloud framework against bigger rivals, with a quarter of the total £594m spent on G-Cloud 10 being hoovered up by the top 10 suppliers.

Other small businesses that have seen significant government spend include those that provide apprenticeship training and specialist software development.

Mike Cherry, national chairman of the Federation of Small Businesses, added: "Making better use of small businesses in government procurement is good for public services, good for the economy and good for taxpayers.

"The Cabinet Office is showing real leadership to drive further progress on this issue and it is good to see this progress begin to be reflected in today's figures.

"Letting a greater proportion of public sector contracts to small businesses will increase competition, value for money and innovation, not to mention boost jobs across the UK.

"We will continue to work with the government as it seeks to reach its welcome commitment for one third of public procurement to be with SMEs by 2022."