Small and micro businesses make up 99% of all UK firms today.
Public authorities are actively trying to procure more from these smaller businesses - but how successfully are they doing this?
We're proud to have partnered with Professor Jane Lynch - professor of procurement and Director of the Centre for Public Value Procurement at the University of Cardiff - on a landmark new report on this critical subject.
The report uses Tussell data to analyse the trends in direct public sector procurement and spending with small businesses across various categories and UK regions.
The following summary unpacks some of the major findings of the paper; you can read the full report, for free, here.
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Professor Lynch’s analysis of Tussell data reveals that public sector spending with small businesses rose by 84% between FY19/20 and FY23/24.
By contrast, micro businesses saw a more modest increase of just 35% over the same period.
Spending with small businesses rose across all UK regions, but procurement with micro businesses fell in the East of England, the South East, and Yorkshire and the Humber.
Direct public sector spending with small firms increased between FY19/20 and FY23/24 across most spend categories - with the exception of Transport, which saw an 8% drop in spending.
During this same period, spending with micro Transport firms fell by a staggering 83%.
Fluctuations aside, the report's analysis makes one point very clear: "the Tussell data confirms that historical spend with micro and small businesses is disproportionate to the percentage number of these businesses contributing to the UK business economy."
Professor Lynch lays out several recommendations for public sector procurement teams, policy makers, and small business owners, highlighting the importance of small businesses to the UK economy, and the need for further efforts to buy more from small and micro business:
"In this period of great uncertainty, where possible, public procurement must be considered as an investment opportunity to support growth where it is most needed, in the micro and small business community. This will directly impact our local communities across the UK, and deliver overall greater public value".
You can read the full paper here.
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