Transparency data

Central Government Direct and Indirect Spend with Small and Medium-sized Enterprises 2016/17

Updated 8 February 2021

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This publication is available at https://www.gov.uk/government/publications/central-government-spend-with-smes-2016-to-2017/central-government-direct-and-indirect-spend-with-small-and-medium-sized-enterprises-201617

1. Central Government Direct and Indirect Spend with Small and Medium sized

Enterprises 2016/17

The government wants small and medium sized enterprises (SMEs1) to benefit from 33% of central government procurement spend, either directly or indirectly through the supply chain, by 2022.

Reports on this target are shown as the sum of two figures: direct spend and indirect spend, as the figures are calculated using different methodologies. Their addition gives the figure which the overall target is measured against.

2. Breakdown of departmental SME spend data (£m) 2016/17

Take a look at the table for the departmental breakdown of small and medium sized businesses for financial year 2016/17 against financial year 2015/16 figures.(ods, 7.41KB)

3. Notes

  1. The indirect spend figures are reported annually by suppliers as part of the centrally coordinated supplier survey. These figures are indicative and have not been supplied by Departments.
  2. From Financial Year 2016/17 BIS and DECC formally report as BEIS.
  3. FCO spend figures are calculated using UK spend data.
  4. MOD total procurement and direct spend figures are for the core department only, therefore excluding its Executive Agencies and NDPB.
  5. Other Data reported by suppliers for central government with no departmental breakdown.

4. Methodology

These figures on SME spend are management information that has been published in the interests of transparency. The data sources for direct and indirect spend are described in more detail below.

Given the differences in methodology between direct and indirect spend and changes in methodology between years, care should be taken when making comparisons over time. We would draw users attention to the scope and coverage of the departmental estimates included in the footnotes in the table.

5. Methodology: Direct Spend

To calculate direct spend, we use Dun and Bradstreet, a leading provider of business information, to class all government suppliers as either SMEs or non-SMEs in line with the EU definition. We then use department’ accounting systems to calculate how much money has been directly spent with those SMEs.

Departments are asked to include the core department and its Executive Agencies and Non-Departmental Public Bodies (NDPBs). Returns are reviewed and signed off by Commercial Directors.

6. Methodology: Indirect Spend

Indirect spend with SMEs through the supply chain was collected through a Crown Commercial Service administered survey of the top 500 suppliers (by spend), on a department by department basis. The suppliers reported percentage of revenues, subcontracted to SMES, was applied to departmental spend data to get their associated indirect SME spend.

Category averages calculated from responding suppliers were then applied to non-responding suppliers to obtain a more complete picture. Departments approved this data. As the survey only applies to the second tier of subcontracted spend, it is likely to represent an underreporting of the SME figures. The figures related to indirect spend should therefore be viewed as indicative.

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