UK Government spend with SMEs – getting inside the data

We commented ealier this week on the data produced by Cabinet Office to show the growth in spend with smaller suppliers (SMEs). The headline shows an impressive increase from 6.5% to 13.7%.

As a numbers man by training and inclination, I immediately wanted to get inside this. How has it happened? Where has it happened? I also get a little suspicious when data is not laid out in a clear manner – if there is an obvious table that could be produced, but it isn’t, the cynic in me immediately thinks – why?

So in this case, wouldn’t we have expected this format? We‘ve already commented in our previous post on the strange omission of 2010/11 data, so it would be:


2011/12 (1st 3 quarters)









But we don’t get this. So one immediately wonders – why? Instead, we have to plough through an 18 page pdf / PowerPoint type document here to try and extract the figures.

Now, we haven’t fully done the analysis, but what is fairly quickly clear is that the growth in SME spend has come in the main from two Departments.  Ministry of Defence have gone from just  4% of 3rd party spend going to SMEs in 09/10 to 14% in 2011/12. If we extrapolate that over a full year, I make it a increase of some £2.1 Billion in the MOD spend going to SMEs.

Ministry of Justice have gone from 9% of 3rd party spend with SMEs in 09/10 to 33% in 2011/12. If we extrapolate that over a full year, I make it a increase of some £1.2 Billion in the spend going to SMEs.

So, between them, these two Departments have accounted for an additional £3.3 Billion of spend with SMEs - more actually than the total £3 Billion increase in spend highlighted in last weeks announcements.  “Government spend to SMEs was tracked at £3bn in 2010 and is on track to double to £6bn by the end of 2011/12”.

Every other Department (in aggregate) therefore shows a pretty flat or slightly declining picture.

So how have MOD and MoJ shown such a huge increase? That’s the question. Because perhaps the other Departments should be learning from them. So we’ve asked for an explanation in our FOI questions. We have some suspicions around the MoJ figures – we mentioned here there were some mutterings about when the inclusion of Legal Aid providers in the data first started. But MOD is a mystery – such a huge increase is surprising and very interesting.  We’ll let you know in a month or so whether FOI comes up with anything.

There’s another minor point with the MoJ figures. Here’s the quote from the report:

Professional Services - Spend through the Capita contract (interims and specialist contractors) since January 2011 through SMEs accounts for approx £15m”

Well, that sounds like spend with Capita, not spend with SMEs – if it is counted at all, it should be part of the “spend through the supply chain” numbers, not the headline figure.

So, to balance today’s somewhat inquisitional tone, in our final post on this topic we’ll feature some of the good new ideas and initiatives announced by Francis Maude to assist SMEs.

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