Procurement spend with SMEs hits six-year high: Suffolk Chamber urges greater transparency and faster rollout

Direct public sector procurement spend with SMEs hit a six year high of 21% last year, according to the latest report by the British Chambers of Commerce (BCC) and public procurement intelligence provider Tussell. 

The BCC and Tussell’s SME Procurement Tracker – now in its fourth year – is the market’s definitive benchmark of direct government spending small and medium sized businesses across England. 

The report, which gives the first indication of the impact of the Procurement Act, reveals absolute public spending directly with SMEs was £45.2b in 2025. That compares to £43.9b in 2024, and £32.3b back in 2020. As proportion of spend, SMEs now account for 21% of overall direct spend, up from 19% in 2024. It has also bucked the running average of 18% since 2020. 

Local government in England continues to be the SME spending success story. In 2025, local authorities had the highest share of spend (34%) and the highest absolute spend with SMEs (£29.1b). In comparison, the NHS share of SME spend was 16% last year, broadly flatline since 2020. Meanwhile, central government’s share in 2025 was 10% (£6.4b) below where it was in 2020 at 13%. 

The data also shows that central government has a long way to hit new SME spending targets. The BCC and Tussell findings show that on average, departments are 8.4 percentage points below target. The Department for Education is performing the best, spending 10% above target, while the Department for Science, Innovation and Technology spend with SMEs in 2025 was 28% below target. (-28%).

Public sector procurement spend with small and medium sized firms varies across different sectors. 33% of spend in education, training and recruitment sector was with SMEs – while the spend in defence and aerospace was just 3%. 

Ashley Shorey-Mills, Suffolk Chamber’s supply chain director, said:

“Whilst these figures continue to give optimism for local SMEs, they also highlight the clear opportunity that still exists. Enabling and supporting SMEs to enter the public sector is vital to successfully turning the dial on these figures, and through the Suffolk Chamber’s dedicated work on supply chains, especially on major infrastructure projects, we have shown what is possible at a local and regional level. We would continue to urge all parts of the public sector in Suffolk to actively engage and work with their Chamber of Commerce.”

Paul Simon, head of public affairs, added:

“For a while now, Suffolk Chamber has been lobbying local councils and other public sector bodies to be as transparent as possible about the value of contracts being awarded to Suffolk firms and in particular local SMEs. We hope that the current council leaderships and those of the forthcoming unitary authorities will commit to not only reporting on these figures annually but will set out commitments as to how they aim to improve them in the future. Greater transparency and faster rollout is what Suffolk businesses are after.”