The SME Opportunity in Numbers: Where to Play and How to Score 

The UK Government has set an ambitious target: one in three pounds of public spending should go to SMEs. 

But the reality? 

Only around one in five does.  

That gap, between 33% ambition and ≈ 20% performance — represents £15–20 billion in extra opportunity annually if departments actually hit their goals. 

The money is real, the pipelines are public, and the Procurement Act 2023 is reshaping how contracts are awarded.  

Here’s where the opportunity actually sits, and how SMEs can position to win. 

1. Follow the spend  

Let’s start with the numbers. 

In 2024, UK public bodies spent around £45.4 billion directly with SMEs. This was a record high, but still only 20% of total procurement. 

That means government is still 13 percentage points short of its 33% target, leaving roughly £15–20 billion a year on the table for smaller suppliers to win. (British Chambers of Commerce / Tussell SME Procurement Tracker 2025) 

Where the money already flows 

• Local government is the biggest single SME buyer, spending £28.1 billion in 2024, or around 35% of its total procurement. Councils remain the front line for local suppliers. 
   

• Health & social care generated £14 billion in direct SME revenues in 2024 — roughly a third of all public spend in that sector. 
   

• Education, training & recruitment saw £5 billion in SME contracts, reflecting continued investment in skills, reskilling and support services. 

Sectors where SMEs already compete and win 

According to the latest Public Procurement Sector by Tender Volume analysis, these markets dominate 2025 opportunities:  

• Health & social care – high volume, local delivery, community focus. 
   

• Technology & digital – cloud, data, AI and cybersecurity projects remain top-tier SME categories. The Home Office alone published nearly 200 tech tenders last year. 
   

• Facilities management & construction sub-lots – building maintenance, cleaning, and small works continue to be split into SME-sized contracts. 
   

• Professional services – consulting, HR, communications and research are often awarded to agile specialist firms. 
   

• Energy & environment / net zero – retrofits, renewables and sustainability services are expanding fast as public buyers chase carbon-reduction targets. 
   

• Education & skills – tutoring, digital learning, careers advice, and workforce training contracts. 
   

• Food & catering supply chains – new “buying better food” policies are opening space for local producers and SME caterers. 
   

• Community & voluntary sector services – outreach, welfare, and social-impact delivery increasingly favour local SMEs and VCSE partnerships. 

The pattern is clear: local, specialist and sustainable suppliers should  have an edge. 

Public buyers are under pressure to buy smaller, buy local and buy smarter — and SMEs that can prove they deliver real impact will be first in line. 

2. Know your buyer 

Under PPN 01/25, central government departments and arm’s-length bodies must now set and publish direct SME spend targets and report annually.  

That means you can see which departments are under pressure to buy more from SMEs and tailor your pursuit accordingly. 

You can also find pipelines and contract notices via the Enhanced Find a Tender / Central Digital Platform being rolled out under the Act. 

3. Choose your route to market 

The Procurement Act 2023 (live from February 2025) promises to simplify the paths to awarding contracts.  

Changes that matter for SMEs: 

• New flexible procurement procedures that allow innovation and adaptation. 
   

• A single central digital platform that replaces the legacy Find a Tender service. 
   

• More streamlined frameworks and easier entry points. 

That means visibility, access and speed are now key advantages. 

4. Position to score 

Policy is opening doors, but scoring rules decide who steps through. 

Key scoring axes now include: 

• Social value and local impact (jobs, skills, community outcomes). 
   

• Environmental commitments — for major contracts, a Carbon Reduction Plan (CRP) is a mandatory criterion under PPN 06/21. 
  ﷟HYPERLINK “https://www.gov.uk/government/publications/procurement-act-2023-guidance-documents-manage-phase?utm_source=chatgpt.com” 

• Delivery assurance — proof you’ve done this before, and delivered reliably. 
   

The recently concluded “Growing British Industry, Jobs and Skills” consultation also proposes more guidance on measuring  how social value must land locally.  

If you can show measurable local impact + delivery record, you’ll outperform larger, ‘generic’ suppliers. 

5. How AutogenAI helps SMEs compete where it counts 

AutogenAI turns data and policy into actionable advantage: 

• Capture & Pursuit gives you a pipeline view of relevant upcoming opportunities, so you go after ones where you can win. 
   

• Library AI helps you reuse your best internal content — case studies, policies and past bids — while Research Assistant and Internet AI bring in live buyer, policy and market insights to make every response relevant and up to date. 
   

• Gamma Review evaluates each response against buyer criteria and AutogenAI’s 60 success benchmarks (based on £7 bn+ of wins). 
   

• Evidence tools (Add Case Study, Add Statistics, Explain How) help you show measurable results (jobs, savings, carbon). 
   

Together, these tools turn insight into action, letting SMEs compete at the highest level. 

6. The bottom line: Data gives you direction — process gets you wins 

The opportunity is real. The money is there. 

If UK government delivers the 33% target, that’s billions more for SMEs every year. 

The question isn’t if SMEs can win more work, it’s which SMEs will use the data, evidence and process to do it. 

With the right insight and the right tools, you can turn policy into pipeline. 

See how AutogenAI helps SMEs turn data into wins – book a demo today.