1.5 In November 2010, the government announced an aspiration for 25% of government procurement to reach SMEs by 2015.4 This was part of a group of measures intended to help SMEs in the UK grow and to boost enterprise across Britain. In February 2011, at a strategic supplier summit for SMEs, the Prime Minister reinforced this commitment, saying:
"We need to make the [procurement] system more open to new providers, more competitive between suppliers … helping us tackle waste, control public spending and boost enterprise and growth. It will also help us modernise our public services, opening them up to the forces of competition and innovation, and give our great charities and social enterprises the opportunity to deliver services too."5
1.6 Government set a target for SME spending for the first time in 2010, but the objective to increase the government's use of SMEs is not new. Over recent decades, government has repeatedly expressed similar intentions to improve access to public sector procurement for SMEs. It anticipates their involvement will lead to greater value for money through increased competition and innovation. Government had also tried to track spending with SMEs before 2010. In 2005, the government conducted a survey of a sample of public bodies. It used data collected from this sample to estimate that, as a percentage of total contract value, it awarded 22% of its business to SMEs in 2004-05. This estimate excluded spending by the National Health Service and the Ministry of Defence (MoD).6
1.7 The CCS leads the government's policy on using SMEs. Over the last five years, government has set a clear policy objective to increase its spending with SMEs. This has been a priority objective for CCS and remains a priority for the next five years. It aims to develop a broader provider market for government contracts to get best value for the public purse through increased choice and competition. Its approach to increasing central government's use of SMEs is to:
• monitor government's spending with SMEs, against its target; and
• identify and remove barriers that SMEs face when bidding for government contracts.
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4 Minister for the Cabinet Office, Summit for small business speech, November 2010, available at: www.gov.uk/government/news/plans-to-open-up-government-to-small-businesses
5 Prime Minister, PM's speech at the Strategic Supplier Summit, February 2011, available at: www.gov.uk/government/speeches/pms-speech-at-the-strategic-supplier-summit
6 Small Business Service, Access to public procurement for small and medium enterprises: progress report - December 2005, available at: www.bipsolutions.com/docstore/pdf/12111.pdf