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Are owner managed businesses missing out on public sector contracts?

Sue Lucas

The UK public sector spends around £200bn per year, on the procurement of both goods and services from third parties, but it is believed that not enough of this is with the owner managed businesses (OMB's).

 It has however been a different story for the digital sector...... 

It has been revealed that almost half of the government spending on digital public sector services is now with small technology businesses.  OMB technology companies offering services to the public sector has now reached over £1bn in value, although there is still a decline in OMB procurement opportunities for other sectors.

The digital marketplace has helped to deliver £725m in savings for taxpayers in the last year, this is due to the digital marketplace being able to offer innovation and valuable services. 

Caroline Noakes, minister for government resilience and efficiency mentioned in a statement that she understood the 'important role' small firms play in spending taxpayers money wisely and that 'smart procurement can make a real difference to peoples lives'. 

However, while the share directed to digital businesses has increased to £1.39 in every £3, a recent report from the Federation of Small Businesses (FSB), exposed the failure of the government to fulfil its target to wider procurement for small firms. 

The current target was set back in August 2015 and the aim was to spend one pound in every three, with small businesses by 2020. While tech firms are now taking up almost half of digital spending, the findings by the FSB showed that just 23% of all small business owners had worked for the public sector and this is down 4% since 2014. The FSB has urged the government to rethink its strategy and to address the imbalance that saw two thirds of public spending worth £200bn go to large companies in the last year.