NAO advises government to focus on UK SME spending

A newly published National Audit Office (NAO) report has analysed the UK government’s recent attempts to increase spending on domestic SMEs, while also evaluating how Westminster’s longer-term pledge can be realised. So far the government appears to be ahead of schedule, but can there be further progress for UK SMEs seeking public sector contracts?

Government reports SME progress

In December 2015, we reported that the government’s 27.1% spending on SMEs surpassed the 25% target for the year. At that pace, the government seems on course to reach its 33% goal by 2020.

However, the NAO has said “it cannot be certain” the Cabinet Office’s estimated £12.1 billion SME procurement “increased over the last Parliament.” Fundamentally, the NAO cited a change in the Crown Commercial Service’s data gathering approach as causing the uncertainty.

After stating “it is not possible to know how much of the reported increase is due to…an actual increase in SME activity”, the NAO evaluated the government's progress and outlined changes that need to be made before 2020.

NAO advice

The NAO identified a positive change over the past five years in there being fewer barriers to public sector bidding. Nevertheless, it recommends that the government should “[take] a more focused approach to improving access for SMEs.”

The NAO suggested, however, that accessibility alone would not be enough as SMEs are often unable to win work because they are not technically eligible to deliver it. This finding prompted Amyas Morse, Comptroller and Auditor General of the NAO, to call for a “focus on those areas where SMEs can deliver real benefits.” The report states that two such areas are flexibility and innovation.

Although the NAO has questioned the published figures, the report is good news for SMEs: it provides the government with timely recommendations on how to reach its 2020 target. Entrepreneurs looking to further future-proof their finances can do this by working with ethical Enforcement Agents like Dukes Bailiffs. Contact us today to find out how we can assist in the recovery of late payments and help maintain healthy cash flows.