Which government departments are closest to their SME spend targets?

Since April 2025, every central government department has been required to publish an annual three-year SME spend target and report progress against it. The first round of progress reports landed this spring, and the picture they paint is instructive for any small business deciding where to focus its bidding efforts.

The headline figures

The Cabinet Office's overarching ambition is to channel at least 30% of central government spend directly to SMEs, worth over £7.4 billion annually by 2028. That remains the benchmark. But progress is uneven, and some departments are much further along than others.

DSIT (the Department for Science, Innovation and Technology) has set the most ambitious target of any department at 40% direct SME spend by the end of 2027/28. Early reporting suggests they are tracking ahead of pace, partly because their procurement is heavily weighted towards technology and professional services, categories where SMEs are well-represented.

The Ministry of Justice and the Home Office are among those with more ground to cover. Both have significant spend tied up in large long term contracts with major suppliers, which makes short term SME spend improvements structurally difficult to achieve without deliberate intervention at the contract design stage.

What the reports don't tell you

The published figures measure direct spend: contracts awarded directly to SMEs by the department itself. They don't capture SME spend in the supply chain of larger contracts, which the government separately tracks as indirect spend. Total SME spend, direct and indirect, is typically much higher than the direct figure, but it's also much harder to verify and much less useful as a procurement target.

It's also worth noting that the reporting methodology is still being standardised. Some departments have been more conservative in how they classify SME-qualifying suppliers. This makes direct comparison between departments less reliable than the headline numbers suggest.

What it means for where you bid

For SMEs choosing where to focus their business development, these reports are genuinely useful. A department that is behind its target has an incentive to increase its SME pipeline, which means procurement teams may be more receptive to approaches from smaller suppliers, and may structure upcoming competitions with SME access in mind.

Conversely, a department that is close to or ahead of its target is already doing something right. Understanding what they're doing — whether that's smaller contract lots, reduced insurance thresholds or reserved competitions, can tell you what good looks like and help you prepare a stronger application.

The reports are published on GOV.UK under each department's transparency pages. They're not always easy to find, but they're public, and most of your competitors haven't read them.