How to improve small business and voluntary sector engagement

The public sector really can engage with SMEs – and we can show you how

There are an awful lot of small- and medium-sized enterprises (SMEs) out there, who are all able to bid for contracts. But it is very easy to assume that including social value in a tender process will make it too hard for them – or for a voluntary, community and social enterprise (VCSE) – to get involved. This is wrong! And we have created two step-by-step guides to tell you just how beneficial it could be to engage SMEs or VCSEs.

The reach of SMEs is huge. They account for a whopping 99.2% of all private sector businesses, says the UK Federation of Small Businesses, as well as three fifths of the employment and about half the turnover in the UK private sector. If you want a monetary value, their turnover is estimated to be £2.3 trillion each year.

Generally, the way that the public and private sectors create a more responsible supply chain has been gradually transformed since the Public Services (Social Value) Act 2012 came into being. However, there has been a natural concern that including social value in public sector contracts might create a burden that makes it harder for SMEs and VCSEs to win public sector work.

In fact, there is now clear evidence that including social value in contracts increase the chance of an SME or VCSE winning work. Simply put, they usually employ local and employ local people – which ticks quite a few boxes. They’re also likely to be working with local schools or supporting people back into work.

Here’s a fact: local governments award more than 50% of all contracts by value to SMEs. This significantly outperforms central government, which is almost 50% behind its own target to spend £1 in every £3 with small businesses or VCSEs.

We’re not saying it’s easy of course. Creating a tender that actively encourages and engages SMEs and VCSEs can take a bit of thought.

We’ve created two step-by-step guides to make all this easier. One gives practical advice for buyers who want to make it easier for these organisations to win work, while the other focuses on what SMEs and VCSEs can do themselves to increase their chances of winning work through social value.

Created by the National Social Value Task Force, these are the ultimate guides you need for public sector organisations to engage SMEs and VCSEs.