Government spending with digital SMEs exceeds £1 billion

The latest official data has revealed that Government spending with small and medium-sized enterprises (SMEs) that offer innovative digital services such as cloud technology has now exceeded £1 billion.

Since its initial setup in 2012, the Cabinet Office’s Digital Marketplace has spent approximately £1.2 billion with SMEs out of a total overall spend of £2.6 billion, statistics reveal.

Warren Smith, Director of the Digital Marketplace, noted that the data reflected that approximately £1.39 of every £3 the Government spends on digital technology is going to the nation’s SMEs.

He 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.”

Despite Mr Smith’s comments, analysis of the latest data alongside historic spending records suggests that the proportion of sales going to SMEs is actually falling, a report in Computer Weekly suggests.

The latest statistics show that cumulative spend since 2012 has hit £2.6 billion, with £1.2 billion going to SMEs, representative of 46 per cent of the total spend.

However, previous data published this time last year revealed that SMEs accounted for 56 per cent of all spending on cloud software and 54 per cent of all sales in the digital services sector.