Small Businesses: Procurement
The question
To ask the Minister for the Cabinet Office, what steps he is taking to support small and medium sized businesses through reforms to public procurement.
Answered by Chris Ward
The Government is determined to ensure that public procurement drives economic growth and removes barriers for small and medium-sized enterprises (SMEs). We have introduced new powers to allow authorities to reserve lower-value contracts specifically for SMEs or local suppliers, banned burdensome pre-qualification questionnaires for lower-value contracts, and mandated 30-day payment terms throughout public sector supply chains.
Central government departments must also set three-year SME spending targets; these were published in March 2026 alongside action plans to achieve these goals.
Additionally, the Government announced further non-legislative reforms in March including using AI to streamline and simplify procurement and introducing AI tools to a central platform. These tools will help to reduce administrative costs by allowing SMEs to reuse core credentials for multiple tenders.
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