New report highlights opportunities for small businesses in public procurement

A major new report by Professor Jane Lynch, Director of the Centre for Public Value Procurement at Cardiff Business School, sheds fresh light on how effectively public procurement supports micro and small businesses in the UK.

Partnering with market intelligence experts Tussell, Professor Lynch analysed data between 2019 and 2024 to understand spending trends ahead of the introduction of the Procurement Act 2023, which came into effect on 24 February 2025.

The findings include:

• public sector spending with small businesses rose by 84% between FY19/20 and FY23/24
• but growth opportunities for micro businesses was far more modest at just 35% – with declines in several UK regions
• in Transport, spend with micro suppliers fell by 83%.

Despite micro and small firms making up 99% of all UK businesses, they account for only a fraction of overall public spending. The report suggests that this is a missed opportunity, especially when public procurement should be a strategic lever for local economic growth.

She added: "The Procurement Act 2023 places a mandate on contracting authorities to publish an 18 month pipeline of contract opportunities valued over £2million that are likely to come up. This removes one of the major barriers for micro and small businesses allowing time to prepare the organisation and their respective supply chains for the procurement tender process.”

The report includes practical recommendations for procurement teams, policymakers, and small business owners – and aims to spark greater awareness of how public spending can drive inclusive economic development.

Find out more

Read the summary of main findings from Tussell.

Read the full report: Procurement as a strategic lever of small business growth: A review of public procurement spend with micro and small businesses in the UK (2019-2024) -ORCA