Small and medium sized companies are involved in every aspect of government business, from artificial intelligence to housing maintenance, and everything in between.
Tech, in particular, is an area in which many SMEs thrive. For example, our report covering the UK EdTech market shows that small businesses are winning more than half of all contracts awarded by higher education buyers.
In this article, we take a look at five of the most established SMEs within the UK public sector. They hold a significant number of valuable relationships, and as such, they offer a tangible example to other SMEs on what's possible in terms of growth. For larger businesses, they provide an opportunity to tap into new relationships through partnerships or acquisition.
1. Made Tech
Made Tech assist government bodies in modernising their applications and improving the technology skills of their teams. Their services include digital service delivery and providing data infrastructure and insights in order to make more effective decisions.
Since 2017, Made Tech has been awarded 27 contracts worth £19.2m, and has worked with eight different Central Government bodies, including HMRC and the Ministry of Justice. For HMRC specifically, it developed a multi-channel digital tax platform, a contract worth £6m, which is due to expire at the end of the year.
Being solely specialised in the public sector, Made Tech are able to focus on exactly what government buyers are looking for and tailor their service offerings accordingly. Furthermore, by winning a place on several government frameworks, including G-Cloud 12, they are well positioned to grow their presence even further.
2. Element Energy
Element Energy is a specialist energy consultancy, with a strong focus on helping clients achieve net zero carbon emissions via solutions like low carbon transport and smart energy systems.
It has deep relationships with several government bodies, having been awarded 32 contracts since 2015 by a mixture of Local and Central Government departments, worth a total of £4.2m.
They have an especially strong relationship with the Department for Business, Energy and Industrial Strategy, who've awarded them 10 contracts worth £3.29m since 2017, making up 76% of their work with the government. These include contracts on smart energy management, as well as various evidence gathering projects like this one on Hydrogen supply chain infrastructure modelling.
Low carbon energy as an industry is garnering more and more attention and support as the UK seeks to meet its climate goals, which makes a partnership with Element Energy a great opportunity for those interested in improving their Net Zero offering.
3. 6point6
Tech transformation company 6point6 are thriving in the public sector, with average earnings of more than £10m per annum over the last 3 years.
6point6 spend data Q1 2017- Q1 2020 [Tussell data]
With a focus on justice and security clients within the public sector, 6point6 has been steadily increasing not only its number of relationships but also the depth of relationships with key organisations.
Multiple £1m+ contract wins with the Home Office since 2016, for example, suggest 6point6 has consistently delivered for one of its key clients, building deep levels of trust over time.
4. Learning Pool
Learning Pool provide a range of solutions from Learning Management Systems - like this £105k contract with the Food Standards Agency - to ready-made e-learning catalogues.
Their coverage in the public sector is staggering, with earnings from more than 140 individual bodies since 2016. The majority of those buyers are in Local Government, which accounted for 98% of their published earnings from 2016-2019.
Learning Pool Spend Data 2016-2019 [Tussell data]
5. Hebron Trust
Hebron Trust is a specialist charity focused on providing drug and alcohol rehabilitation services.
It can be considered extremely successful in this niche, having secured 11 separate framework agreements across the public sector, including this £2.4m framework for 'Drug and Alcohol Inpatient Detoxification and Residential Rehabilitation' with Suffolk County Council.
Our spend data reveals an even more extensive set of relationships in the public sector, with a significant geographical spread. Since 2016, Hebron Trust has earned money from 25 separate public sector authorities all across the UK, from Yorkshire down to West Sussex.
Conclusion
There's still more to be done by the government in terms of SME participation, but there's plenty of evidence on a case-by-case basis that firms can find a formula that offers significant, sustainable income.
Frameworks clearly play a key role for many companies, while others benefit from having a deeply specialised approach in terms of service offering or the sub-sector they work in. We explore these and a number of other strategies in our SME Guide to doing business with the public sector.
For larger businesses, SMEs are unlikely to pose a major threat, particularly in the short term. Instead, they offer an excellent opportunity to grow relationships with public sector organisations through partnering or acquisition.
