The government's pledge to increase SME spending will not be honoured unless "new and concerted action" is taken, according to Public Accounts Committee chairwoman Meg Hillier.
The committee said that the government had reported progress against its target for SME spending from 2010 to 2015, but that it isn't clear that SMEs are better able to compete with larger providers or are actually getting any more government business than before.
For example, the government's top five IT providers received over half of the government's total spending on contracted-out IT.
The committee is not persuaded that initiatives to remove barriers to SMEs have resulted in substantially greater competition for government business, and has called for the government to reinvigorate its efforts.
Many of the initiatives began early in the previous Parliament, and a number have come to an end, particularly those focused on voluntary, community and social enterprise organisations.
Hillier pointed to some success with the G-Cloud programme in which an estimated 51 per cent (or £510m) of government spending has gone directly to SMEs.
The committee said that the government has yet to identify areas of spending where SMEs could bring the most benefit, and that it remained too difficult for SMEs to identify available bidding opportunities.
Hillier called on the Cabinet Office and Crown Commercial Service (CCS) to help departments identify areas where SMEs can add value and how it will structure contracts and procurement to enable them to compete.
In August, the government increased the target for SME spending from 25 per cent to 33 per cent by 2020. But the committee said that it is not clear how the government decided on 33 per cent or the extent to which the target is achievable.
Hillier urged the CCS to report back by March 2017 on what it has done to re-establish momentum towards hitting this target.
The committee also criticised the way the government had changed its approach to measuring SME spending in four of the past five years, making it hard to know whether government spending with SMEs has actually increased as the government has suggested it has.
Hillier recommended the adoption of a new and consistent approach to measuring year-on-year performance for SME spending.
The committee questioned whether "the voice of SMEs is being heard in government", and is not convinced that increasing spending with SMEs is being given sufficient priority.
It called on the government to set out how it will it make it easier for SMEs to be aware of all contracting, subcontracting, awarded contracts and other opportunities in the pipeline.
Hillier said that the committee is "sceptical" about the progress the government had made, and emphasised that launching initiatives is not the same as delivering results.
She added that small businesses are too often locked out by complex and lengthy procedures, and called for an attitude change in Whitehall so that SMEs get the chance to contribute more.
A National Audit Office report earlier this year found that the majority of government spending with SMEs is through larger contractors.
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