For many small businesses, winning government contracts has long felt out of reach. New procurement rules aim to change that—potentially reshaping how public money flows through the economy.
The government has introduced targets designed to increase opportunities for small and medium-sized enterprises (SMEs), with departments collectively expected to deliver more than £7.4 billion a year in spending to smaller businesses by 2028.
For the first time, individual departments will be held accountable for their performance. Each will set its own SME spending targets and publish annual progress updates. Those that fall short will be required to outline clear plans to improve—adding a level of transparency that has previously been missing.
The shift comes against a backdrop of longstanding imbalance. Data from the British Chambers of Commerce (BCC) and Tussell’s SME Procurement Tracker shows that in 2024, just 20% of direct public sector procurement spending reached SMEs.
Despite some growth in the overall value of contracts awarded to smaller firms, their share has remained relatively limited—leaving many businesses locked out of opportunities that could support expansion and stability.
The BCC believes the new approach could mark a turning point. Jonny Haseldine, Head of Business Environment Policy, described the changes as “long overdue,” noting that public procurement has been “stuck in a rut” when it comes to SME participation.
If implemented effectively, the reforms could widen access to government supply chains, giving smaller firms a more meaningful role in major projects and public services.
Examples already exist. SME involvement in large-scale infrastructure projects such as Sizewell C and Hinkley Point has demonstrated the value smaller businesses bring—not just in delivering specialist skills and local knowledge, but in driving regional economic growth.
The challenge now is delivery. The targets are ambitious, but their success will depend on whether departments follow through—and whether barriers that have historically limited SME access are genuinely removed.
For SMEs across the UK, the opportunity is clear. The question is whether this long-promised shift will finally translate into real, accessible work.
