Small businesses have the potential to transform public service delivery and drive innovation, which is why the government set itself a target of spending £1 in every £3 with SMEs by 2022. But, in order to make this a reality, more needs to be done to break down the barriers that have been hindering SME access to the public sector tech market for some time now.
In December 2019 and January 2020, techUK surveyed over 100 SMEs
who supply tech to the public sector – or aspire to do so – to gauge their views on the market. We used the findings to develop recommendations to promote govtech innovation, ensure a smoother experience when it comes to procurement, and generally help improve access to the public sector tech market for SMEs.
Two-thirds of respondents felt that the government has not acted effectively on its commitment to helping small businesses break into the public sector over the last five years. Perhaps even more significant is the fact that 66% also do not feel that the government will achieve the SME spend target – an increase from 63% last year. It’s clear that, despite government’s considerable efforts, more needs to be done.
But it definitely has not all been bad news. SMEs are positive that they are much higher up on the government’s agenda than in previous years. Martin Traynor OBE’s appointment as the new SME Crown Representative has been very welcome and the Digital Marketplace, established to simplify the application process for small businesses operating in the public sector tech market, has made great strides in making opportunities more open and visible to all. Three in five survey respondents felt that the Digital Marketplace has helped SMEs access the public sector tech market. But while it has been successful in making opportunities easier to access, 63% of respondents don’t feel that the government is making enough use of e-marketplaces.
Perhaps the most significant revelation from the survey was that 91% of respondents felt that the government doesn’t have a sufficient understanding of how small businesses can meet their needs. This figure is up from 85% last year.
One pound in three
Government’s long-stated target for the proportion of spending it intends to go to SMEs
Proportion of SMEs that do not believe this goal will be achieved by the current target of 2022
Proportion of techUK survey respondents that feel government does not properly understand how SMEs can meet their needs
Year the Digital Marketplace was launched, replacing the CloudStore
Proportion of SMEs that believe the marketplace has improved access to the public sector market
The barriers for SMEs wishing to work with public sector remain largely unchanged from last year, and include a risk-averse culture in the civil service. The feeling is that government still favours larger suppliers, meaning SMEs do not get the opportunity to showcase their capabilities and show government just how they can meet their needs.
A lack of pre-procurement market engagement and complex frameworks were also identified as being among the biggest barriers for SMEs trying to do business in the public sector.
Respondents told techUK
they are often unaware of when contracts are about to be published and so miss the chance to engage with buyers beforehand, putting them at a disadvantage. Many SMEs simply do not have the time or resource to go through onerous procurement processes and 59% of respondents feel that they do not receive enough support and guidance from procurement organisations who host frameworks.
While the Digital Marketplace has helped SMEs access the public sector tech market, it’s still not enough. The SME view of the market and the barriers identified in this year’s SME Survey very much echo those identified last year.
This might feel like déjà vu for those of you who have been operating in this space for a while, but we’re hopeful that the recommendations below will aid in improving the situation. We need visible ministerial SME champions who can really drive the SME agenda in departments, increased SME engagement and a simpler procurement process.
• More early pre-procurement market engagement
• Wider use of the Digital Marketplace – this should be the main route to market
• Simplifying procurement processes, fewer frameworks
• Supercharge ministerial SME champions
Of equal importance is the need for continued collective engagement from SMEs who can provide exciting tech that can improve the services that are so clearly important to all of our lives. If you are a member of such an organisation, we ask that you get in touch, so we can drive this agenda together.