Nearly 80 per cent of public sector contracts in Scotland go to SMEs

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Nearly eighty per cent of public sector contracts in Scotland are now awarded to small and medium businesses (SMEs), according to an annual report by Public Contracts Scotland.

Of the 22,000 contracts advertised through Public Contracts Scotland in 2017/18, 17,500, or 78 per cent, were awarded to SMEs, of which 13,500 were Scottish businesses.

Seventy-three per cent of the contracts went to Scottish business, and 60 per cent to Scottish SMEs.

The Procurement Reform Scotland Act, which came into force two years ago, committed public sector bodies to ensuring their procurement practices are open to SMEs.

Since 2014 there has also been a 46 per cent increase in the number of contracts advertised online, leading to greater visibility of contracts available for tender.

Commenting on the report at the annual reception of the Federation of Small Businesses in Edinburgh, First Minister Nicola Sturgeon said the Scottish Government was valuing small businesses in practice.

She said: “The implementation of the Procurement Reform Scotland Act two years ago required public sector organisations to take action to make sure their procurement practices were open to SMEs.

“And the steps we have implemented are having a positive impact, as demonstrated by the welcome increase in public sector contracts being awarded to small businesses.

“In total, 50 per cent of public sector spend on procurement in the last financial year went to SMEs. That’s well over £5 billion.

“The value and quality of the services provided by small businesses isn’t simply something this government is praising in our rhetoric; it’s something we are recognising in our purchasing practices.”