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Billions to go directly to small businesses across the country as government sets new targets for spending

ended 24. March 2026

Small businesses across the country are set to receive over £7.4 billion a year from Government spending by 2028, boosting local communities and creating jobs, the government has announced today. Any thoughts on the announcement below, ASAP please.

New targets published today will see Government departments delivering on a key commitment in the Plan for Small Business by spending more money with small and medium sized businesses, so they can grow themselves and grow the economy. 

Departments have, for the first time, individually set direct SME spending targets and will publish yearly progress updates ensuring they are held to account, those who fall behind will need to set out robust actions on how they will improve. 

This is in addition to small business spending from the Ministry of Defence which will increase by a further £2.5 billion, to £7.5 billion by May 2028.

While the targets are for direct spending, billions more also goes through supply chains, meaning the overall amount for small businesses is likely to be even higher.

This government is empowering business to drive growth and wealth across Britain because a thriving private sector creates opportunities for people to get good jobs across the country. This is why we will be more proactive than our predecessors in backing British businesses small and large to build and scale up. 

Last year, the Government launched its flagship Small Business Plan, which included the most significant legislation to tackle the scourge of late payments in over 25 years and a massive £4 billion finance boost to break down barriers to accessing funding. 

4 responses from the Newspage community

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Nouran Moustafa
Practice Principal & IFA at Roxton Wealth
This is positive news in principle, because too often small businesses hear big pro-growth language but do not feel it in real life. If departments are now setting individual SME spending targets and being forced to show progress publicly, that at least creates some accountability, and that matters. Small businesses do not need more slogans, they need actual contracts, actual cashflow and actual opportunities to scale.

That said, the real test is not the headline number, it is whether the money genuinely reaches smaller firms without them being buried under procurement complexity, slow decision-making or late payment culture. Government can announce billions, but if the process still favours larger players with bigger teams, more resource and more time to navigate it, then the promise will not fully land. So for me, this is encouraging, but delivery is everything. Small businesses do not grow from announcements alone, they grow when access becomes real, practical and commercially good
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Rohit Parmar-Mistry
Founder at Pattrn Data
Targets for SME spend sound bold, but procurement is where good intentions go to die. If departments just chase a headline percentage, you risk two bad outcomes: more box-ticking contracts that don’t deliver, and more admin dumped on the smallest firms.

The test is simple: do SMEs get paid on time, do they win work without needing a bid-writing department, and can they scale delivery without being crushed by compliance theatre? Publishing annual progress helps, but targets without enforcement are just PR. I’d want open, comparable data by department, prompt-payment performance, and a route to challenge slow, risk-averse purchasing decisions.

And don’t hide behind “supply chain spend”. If primes take the margin and SMEs take the risk, nothing changes. The real question for 2028 is: what did we cut, standardise, and automate so good suppliers spend time delivering, not form-filling? Fix incentives and process, and SMEs will do the rest.
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Astrid Davies
Founder CEO at ADCL
This is welcome news for the beleagured SME community in the UK. However, there's some devil in the detail. Will there be financial and practical support to ensure SMEs have the Cyber Essentials accreditation necessary for much public sector procurement? How sharp and powerful are the SME Commissioner's teeth when it comes to the welcome news re late payment fines for larger firms leaving SMEs to dangle on as creditors for unacceptable periods? How straightforward and open will the procurement processes be, when Departments and their procurement teams don't talk and, therefore, what is being procured often isn't *quite* what was actually required, so SMEs have to amend their proposals at their own cost, for fear of losing a significant contract? All three are live issues for my microbusiness right now. They shouldn't be. I really hope these timely new measures can shift the dial on behaviour toward SMEs.
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Lee Fellows
Managing Director at The Charity Shop Gift Card
As a small business operator, I welcome anything that helps SMEs access more government contracts but temper this enthusiasm with my experience of the Social Value Act which hasn't seen any improvement for our ability to win public sector contracts.

Whilst this legislation undoubtedly is well intended, additional requirements can reduce flexibility in procurement and leave buyers taking the simplest option which ticks all of the boxes but stifles innovative solutions.

I welcome the initiative but hope that the implementation does truly mean that SMEs of all sizes will benefit.