In the last five years, government spending with SMEs on cloud and digital services has exceeded £1bn, equating to almost half of its overall total.

Figures released by the government reveal that, since 2012, £1.2bn has been spent with SMEs via the Digital Marketplace. This is out of a total spend of £2.6bn. This means that about £1.39 of every £3 it spends on cloud and digital is going to SMEs, the government said.

Digital marketplace director Warren Smith said: “We are continually focused on breaking down the barriers to entry for SMEs to do business with government, for example, by simplifying the application process. We are also breaking down the traditionally large contracts into smaller ones, which favour a more diverse range of suppliers and help government to buy services more efficiently.”

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According to the government, the Digital Marketplace helped deliver £725m in savings last year. One example of such savings, it said, was Derby City Council’s move to switch its IT provision from a big multinational company to midlands-based SME risual. The money the council saved is estimated as being equivalent to the amount needed to repair 150 potholes.

Caroline Nokes, minister for government resilience and efficiency, said: “Small businesses have an important role to play in helping government to spend taxpayers’ money wisely. That is why we continue to find ways of improving how the public sector, schools and hospitals, for example, puts money back into services for those they look after.”

She added: “The money saved in Derby is a good example of how smart procurement can make a real difference to people’s lives.”