SMEs have limited trust in government procurement

Written by Henry Rex on 9 June 2021 in Opinion

An annual survey from techUK shows that significant barriers remain for smaller firms wishing to supply government, according to Henry Rex

Credit: Piqsels

Small and medium enterprises have the potential to transform public service delivery through their innovation and capabilities; this is clear and well-documented among industry – but more work needs to be done in government. 

Helping SMEs access the public sector technology market has been high on techUK’s agenda for a while now as central government is dominated by large companies and it is notoriously difficult for SMEs to access the market due to a number of barriers that stand in their way.  

This is why techUK runs an annual GovTech SME Survey

From January 2021 to March 2021, we surveyed over 100 SMEs that work in the public sector or aspire to do so, to gather their experiences of the market. 

The survey found that 65% of respondents feel that the Digital Marketplace – an online platform that allows public sector organisations to search for people and technology for digital projects – continues to help improve SME access to the market by making opportunities more visible and open to all. 

While the Digital Marketplace continues to be a shining light for SMEs, selling to the public sector is still a complex process, and overall SME trust in government is extremely limited. 

The most significant finding, however, is that a very worrying 92% of respondents do not believe that government buyers have sufficient understanding of how small businesses can meet their needs. While SMEs are small, their innovative nature means that they are more than capable of meeting government requirements. 

A risk-averse culture within the civil service, too many frameworks, and a lack of meaningful early industry engagement are the top three barriers for SMEs identified by our survey. These barriers need to be broken down in order to ensure a smoother procurement process for SMEs. They have remained largely the same for the past couple of years and the public sector has a huge job to do in giving SMEs more assurance. 

Up from last year, the survey revealed that 40% of respondents feel that the government has acted on its commitment to helping small businesses break into the market over the last five years – this is promising and shows that there are small signs of improvement, but the figure is still disappointing, and any changes are proving to be marginal and slow. 

While the Digital Marketplace continues to be a shining light for SMEs, selling to the public sector is still a complex process, and overall SME trust in government is extremely limited. It must be remembered that SMEs make up 99% of UK businesses and so it is paramount for the government to work alongside them to meet their needs. 

We need to see things like more early market engagement, wider use of the Digital Marketplace and an annual price review built into contracts. Moreover, having ministerial SME Champions for each department would really help the government drive the SME agenda forward and improve its relationships with SMEs. 

The government must work with SMEs on understanding and harnessing their capabilities and address the major challenges. Access to the market can and will improve if the government recognise how SMEs can meet their requirements and work with their best interests at heart. 


About the author

Henry Rex is associate director for public sector at techUK. This year's GovTech SME Survey can be accessed here.

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