Procurement Is Changing Again: What SMEs Need to Know 

The UK Government now says it wants one in every three pounds of public spending flowing to small and medium businesses. Today? It’s closer to one in five. That gap is massive, and the next wave of procurement reforms could be the moment for SMEs to step up. 

In June 2025, the UK launched the “Public Procurement: Growing British Industry, Jobs and Skills” consultation, building on the Procurement Act 2023, and asking precisely how procurement should push domestic growth. Meanwhile, new rules are already live: under PPN 001, every central government department must set and publish targets for how much it spends with SMEs. 

Why Now? 

Because this is a structural shift. Procurement has long favoured big players: lengthy processes, dense compliance burdens, and layers of bureaucracy. But the direction is changing. Departments must now be held accountable for SME spend. Buyers will increasingly have to choose suppliers who can move fast, prove social value, and deliver with clarity. That puts well-prepared SMEs in the sweet spot. 

The Ambition vs The Reality 

The government’s ambition is clear: 33% of public sector spend with SMEs. But the reality doesn’t yet match. 

According to the Cabinet Office, central government spent £21 billion with SMEs in 2021/22, representing around 26.5% of spend when direct and indirect routes are combined. Independent analysis by Tussell, which tracks procurement data, shows that in 2023 the direct share of spend to SMEs was closer to 20%. 

That gap, between 20% and the 33% target,equates to billions of pounds in untapped opportunity for small businesses. If procurement reforms are successful, more than £15–20bn annually could and should shift towards SMEs. 

For SMEs, this is more than just policy talk. It’s a signal that the market is opening, but only for those who are ready to meet the growing demands around compliance, delivery, and evidence. 

What’s Changing 

The Procurement Act 2023 was already billed as the biggest shake-up in a generation. But the government’s latest consultation signals it wants to go further: procurement should actively grow British industry, jobs and skills. 
Here’s what SMEs need to know: 

• SME spend targets are now mandatory. From 2025, every department must publish its targets and results under PPN 01/25. That creates new pressure on buyers to choose smaller suppliers. 
   

• Late payments are under the spotlight. The UK Government says prompt payment down the supply chain is non-negotiable. Buyers will favour SMEs that can commit to paying subcontractors in 30 days or less. 
   

• Jobs and skills conditions are on the rise. Ministers have floated attaching requirements around apprenticeships, local hiring or training to certain contracts. SMEs will need evidence to prove their contribution. 
   

• More transparency. Expect more open publication of pipelines, awards and performance data. That helps SMEs spot opportunities—but it also increases scrutiny. 

For smaller businesses, these changes mean more opportunity but also more admin, evidence and compliance checks. That’s where the right support matters. 

So What Does This Mean for SMEs? 

More doors open, but competition sharper. 
With departments now under pressure to spend more with smaller firms, there will be more opportunities for SMEs to get a seat at the table. But that also means more competitors fighting for the same contracts. Simply “being an SME” won’t be enough. 

You’ll need evidence of impact. 
Buyers aren’t usually looking for simply a low price. They’ll want proof that you can deliver on the wider outcomes the government cares about — local jobs, apprenticeships, skills training, social value, environmental impact. SMEs that can show this clearly and credibly will have the edge. 

Compliance pressure will grow. 
Public procurement is unforgiving. One missing form, one unchecked box, and your bid can be ruled out before anyone even reads it. With new targets, conditions and transparency requirements, the admin load is only going up. 

Where AutogenAI Helps SMEs 

Government reforms mean more opportunities for SMEs, but only if they can bid at the standard government expects. For smaller suppliers with limited time, money and people, that’s a tough ask. AutogenAI is designed to bridge that gap: embedding the expertise of bid professionals with over £7bn of wins, and benchmarking every draft against 60 proven benchmarks that measure the building blocks of a winning bid. 

Here’s how AutogenAI addresses the real challenges SMEs face: 

• High-quality drafts that level the playing field – Large companies have teams of bid writers; most SMEs don’t. AutogenAI produces structured, evaluator-ready drafts shaped by 60 proprietary  benchmarks, giving small firms the quality of output normally reserved for the biggest suppliers. 
   

• Library AI: make the most of what you already have – SMEs often waste time reinventing answers. Library AI turns your past bids, case studies, CVs and policies into a searchable, adaptive library, so you can reuse and tailor content instantly instead of starting from scratch. 
   

• Internet AI: save research time, add credibility – SMEs can’t afford days trawling through policy docs. Internet AI surfaces up-to-date statistics, regulations and government priorities, helping you strengthen your bids with verifiable, external evidence in minutes. 
   

• Creative AI: stand out without extra headcount – Differentiation is tough when you’re small. Creative AI helps you frame solutions in fresh, innovative ways that highlight your unique strengths — without straying from compliance. 
   

• Ask AI: a bid consultant on call – SMEs rarely have an experienced bid mentor to hand. Ask AI acts like one: explain a requirement, suggest improvements, or check alignment with buyer needs — all in real time. 
   

• Evidence tools: proof made simple – SMEs often struggle to present impact. With AutogenAI’s evidence functions, you can easily drop in relevant stats, testimonials and examples, ensuring your claims are always backed with proof. 
   

• Gamma Review: no more costly compliance mistakes – Small teams can’t afford to miss details. Gamma Review checks your response against: 
   

• Bid-specific criteria (question and specification). 
   

• Pre-defined expert criteria: Approach and Methodology, Evidence, Robustness, Innovation, Spelling and Grammar. 
  This ensures your answers are compliant, robust and evaluator-ready before submission. 
   

• Collaboration at SME scale – With lean teams, SMEs need efficiency. AutogenAI enables one or two people to draft, review and finalise bids with the effectiveness of a full bid office. 

The Opportunity is Real  

Billions of pounds of government work are opening up to SMEs. But the bar hasn’t dropped. If anything, it’s higher. 

AutogenAI gives SMEs the capability, credibility and compliance edge they need to compete with the biggest suppliers. It’s like putting a world-class bid team in your pocket at SME scale and speed. 

To learn more about AutogenAI, contact us today.