Could any of it be yours?

If you’ve always assumed government contracts were for big firms with big teams, you’re not alone. But there's reason to believe that assumption isn't accurate.

The government has announced that every department now has an individual target for how much it must spend directly with small businesses. The goal: more than £7.4bn a year going to SMEs by 2028. Departments have to publish yearly progress updates and if they fall short they have to explain what they’re doing about it.

Why now?

In 2024, just 20% of direct public sector procurement went to SMEs. The new targets are designed to change that. Some departments have set far more ambitious goals: the Department for Science, Innovation and Technology has committed to 40% of its budget going to small businesses. Nearly half of all departments are aiming for above 20%.

Who could benefit?

The priority sectors are cyber, manufacturing, finance and science, but government contracts cover a huge range of needs. This includes IT, logistics, training, consultancy and more. If your business has relevant expertise and a solid track record, it’s worth looking at what’s out there. The Find a Tender service is a good starting point.

See it as a starting point

Winning a contract is one thing. Delivering it is another. Public sector contracts often come with long payment terms. You may even need to hire staff or buy equipment before you see a penny. That’s where cash flow planning matters. A business loan or revolving credit facility can help you bridge the gap, so you can say yes to the opportunity and then actually deliver on it.

Worth a look

Government procurement isn’t right for every business. But if you’ve never looked into it, now might be the time. The rules are changing in your favour.