Government contracts are out of reach for most Shropshire SMEs

Lucrative Government contracts remain out of reach for the majority for small and medium sized businesses in Shropshire – and it’s a situation which has to change.

That’s the view of Shropshire Chamber of Commerce following the publication of a new report showing just 20% of direct procurement from the public sector went to SMEs last year.

The figures are contained in the British Chamber of Commerce’s new ‘Procurement Tracker’, produced in association with date provider Tussell.

It is a benchmark source for assessing how well the Government is performing when it comes to supporting and doing business with small businesses across the UK.

Ruth Ross, Shropshire Chamber of Commerce chief executive, said: “A largely rural county like ours can often feel disconnected from the corridors of Westminster hundreds of miles away, and statistics such as these do little to help.

“Our brilliant SMEs are the lifeblood of the Shropshire economy. They want and deserve a procurement process in which they can properly compete, and which is not weighted so heavily in favour of larger organisations.” 

The BCC report followed the progress of nearly £195 billion of procurement expenditure from public bodies in 2023.

It found that local government had the greatest proportion of procurement spend with SMEs, with a share of 34%. 

The Department of Education spent the highest figure with SMEs, but the £2 billion total represented only a quarter of its overall expenditure.

Jonny Haseldine, policy manager at the British Chambers of Commerce, said: “While it’s welcome the value of SME procurement contracts is continuing to increase, government deals remain out of reach for too many businesses.  

“It is vital that public bodies always consider SMEs when tendering contracts. Central government can learn lessons from local authorities who are consistently spending more on SMEs deals. 

“We’d welcome further devolution of decision making to allow more procurement contracts to be awarded at a local level.  

“The Procurement Act coming into force at the end of October has the potential to make the system simpler and more transparent for businesses. 

“In addition, it’s crucial we hear more from the new government on their pledge to give SMEs greater access to contracts. 

Gus Tugendhat, Founder of Tussell said: “We hope that our findings will help policy-makers across all parts of government to support local communities by reducing the official obstacles to awarding public contracts to small businesses.” 

Pic: Things have to change, says Shropshire chamber chief executive Ruth Ross