Government Unveils Updated SME Action Plan to Boost Small Business Access to Public Contracts

The Crown Commercial Service (CCS) has released an updated SME Action Plan designed to help small and medium-sized enterprises (SMEs) win more public sector contracts.

The plan focuses on reducing barriers, improving engagement, and increasing transparency within the government procurement process. The initiative aims to ensure that more of the UK’s annual public spending benefits smaller firms — a vital step in strengthening innovation, productivity, and local economies.

Expanding Opportunities for UK SMEs

The UK public sector spends more than £300 billion each year on goods and services, but SMEs have long faced challenges accessing this vast market. Complex procurement systems, lengthy tender processes, and limited visibility of opportunities have often favoured larger suppliers.

Under the new SME Action Plan, government departments and public bodies will be required to set three-year spending targets with SMEs. The plan also pledges to simplify bidding procedures, reduce unnecessary paperwork, and improve communication between buyers and smaller suppliers.

A CCS spokesperson said:

“Small businesses are the backbone of our economy, driving growth, jobs, and innovation. This plan ensures they have a fair chance to benefit from government contracts and that public procurement works better for everyone.”

Addressing Long-Standing Challenges in Procurement

SMEs make up over 99% of all UK businesses and employ more than 16 million people. Despite their economic significance, they remain underrepresented in public procurement. Industry groups such as the Federation of Small Businesses (FSB) have long called for fairer access, arguing that smaller firms often lack the time and resources to navigate the existing tender process.

Research from the FSB shows that fewer than one in five SMEs regularly bid for government contracts, often citing red tape and unclear requirements. The updated CCS plan seeks to change this by simplifying systems and making opportunities easier to find and understand.

Business leaders have welcomed the announcement as a step forward but emphasised that consistent implementation across departments will be key to success.

Aligning with the Procurement Act 2023

The SME Action Plan complements the Procurement Act 2023, which is set to modernise the UK’s procurement framework next year. The Act will require contracting authorities to publish clearer data, adopt fairer evaluation methods, and engage earlier with suppliers.

Together, these reforms are expected to create a more competitive and transparent marketplace that gives innovative SMEs a stronger chance to win public contracts.

Strengthening Local Economies and Innovation

Experts say increasing SME participation in public contracts could boost regional growth and strengthen local supply chains. Smaller firms are more likely to reinvest profits within their communities, supporting jobs and local resilience.

Encouraging SME involvement also helps drive innovation, as smaller companies often bring agility, new technology, and creative solutions to public sector challenges.

Looking Ahead

The Crown Commercial Service has pledged to monitor progress closely and publish regular updates on SME participation rates. Business organisations are expected to play a key role in shaping feedback and helping refine future policy.

By modernising procurement, the government hopes to unlock the full potential of SMEs, supporting growth, innovation, and long-term economic stability across the UK.