Government spends over £1bn with digital SMBs

It has saved £725 million of taxpayer cash by using smaller businesses to provide its IT services


Small businesses are the clear winners when it comes to benefitting from government IT spending, a new report has revealed.

According to the Government Digital Service (GDS), the public sector has spent 1.2b with SMEs on cloud and digital services in the last five years, accounting for 1.39 in every 3 spent.

This amount spent on services provided by small and medium business is having huge benefits for the public, the report revealed, with 725 million of taxpayer cash saved by procuring the technologies that enable citizens to benefit every day.

For example, Derby City Council switched from a large multinational company to a Stafford based SME that could offer the same services for a much lower cost. It is now passing these savings onto other departments to help them operate more efficiently.

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"We are continually focused on breaking down the barriers to entry for SMEs to do business with government, for example, by simplifying the application process," Warren Smith, director of the Digital Marketplace said.

"We are also breaking down the traditionally large contracts into smaller ones, which favour a more diverse range of suppliers and help Government to buy services more efficiently."

The Crown Commercial Service (CCS) has played a major part in helping public services switch from large enterprises to smaller businesses for their IT needs. For example, it set up the Digital Marketplace with the GDS to make it easier for governmental organisations to procure services.

"We're making it as easy as possible for small business to supply to government," Niall Quinn, Director, Technology Strategic Category for CCS added. "They in turn will help us to deliver efficient public services that meet the needs of citizens."

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