Purpose of the Session
The Department for Work and Pensions formally launched its new SME Action Plan, outlining how the department will transform its engagement with small and medium‑sized enterprises. The session brought together ministerial leadership, the Government’s Small Business Crown Representative, DWP commercial leaders, the Strategic Relationship Team, and a live SME case study to demonstrate what is already changing and what comes next.
Baroness Sherlock OBE – DWP Minister for Lords Cabinet Office
The Minister reaffirmed DWP’s commitment to using its scale and spending power to support SMEs, drawing on her own background leading voluntary organisations. She highlighted that DWP already spends over £400m annually with small businesses, but intends to go significantly further.
Key messages included:
- SMEs are central to economic growth, community impact and innovation.
- The Action Plan aims to remove barriers, improve fairness and create meaningful opportunities.
- DWP now pays 95% of invoices within five days, demonstrating its commitment to supporting SME cashflow.
Shirley Cooper – Government’s Small Business Crown Representative
Shirley Cooper provided a national perspective on the reforms reshaping public procurement and why DWP’s plan matters.
She emphasised:
- The Procurement Act 2023 and new regulations are designed to fix long‑standing SME barriers such as complexity, lack of transparency, and short bidding times.
- Procurement professionals across government must now “have regard” to SME needs and actively remove or mitigate barriers.
- The new Central Digital Platform is intended to become a true one‑stop shop for opportunities, with 86,000 suppliers registered and 275,000 notices published a 400% increase in eight weeks.
- SMEs should use premarket engagement, collaborate through consortia, and register early to access opportunities.
“This is a game changer… government is opening the door wider than ever before.”
She welcomed DWP’s Action Plan as a strong example of departmental ambition and encouraged SMEs to engage early and often.
DWP Commercial Overview – Shaun Evans
Shaun outlined the scale of DWP’s operations and why SME engagement is strategically essential:
- DWP manages £424bn annually, equivalent to the world’s 26th largest economy.
- It processes 1 billion bank transfers a year — 4 million daily.
- Historically, contracts were large and consolidated; the new approach focuses on breaking down barriers and opening opportunities.
Key commitments include:
- Increasing Direct SME Spend
- DWP will increase direct SME spend from 3.3% to 8% by 2028 — a quarter‑billion‑pound commitment.
- New procurement rules allow consideration of social value, where SMEs often excel.
- Reducing Barriers
- Longer bid response times.
- Greater pipeline transparency.
- Simplified tender requirements where possible.
- Proportional risk and financial assessments.
- Strengthening Engagement
- Sector‑specific events.
- Early market engagement.
- Collaboration with the Government Commercial Authority on frameworks.
- A dedicated SME mailbox for support.
Shaun stressed that this is the first iteration of a plan that will evolve through testing, learning and SME feedback.
Strategic Relationship Team
The team explained how they support employers especially SMEs through recruitment, workforce development and access to DWP programmes.
Support includes:
- Free recruitment support and access to talent pools.
- Sector‑Based Work Academy Programmes (SWAPs), work trials and work experience.
- Disability Confident accreditation and specialist employment support.
- Localised relationship management through jobcentres and employer partnership teams.
- National coordination for SMEs with wider footprints.
Their aim is to make engagement with DWP simple, consistent and beneficial, ensuring SMEs can access the right support at the right level.
Supplier Case Study – Route 101
Route 101, a Bristol‑based SME, shared their experience of winning a £265m, seven‑year contract with DWP to modernise contact centre infrastructure.
Key lessons:
- The negotiated procedure gave SMEs more time to build strong bids and engage meaningfully.
- Early clarity on requirements and acceptance criteria was essential.
- Governance and resourcing expectations are higher than in commercial contracts — SMEs must plan for this.
- A transparent, collaborative relationship was central to success.
The case study demonstrated that SMEs can win major government contracts when processes are designed with accessibility in mind.
Closing Message
The launch marks a significant shift in how DWP intends to work with SMEs. Leaders were clear: this is the start of a long‑term cultural change, and SME feedback will shape future iterations of the plan. The department wants SMEs to challenge them, highlight barriers and help co‑design improvements
More details can be found here: https://www.gov.uk/government/publications/dwp-small-and-medium-sized-enterprise-sme-action-plan-2025-to-2028/department-for-work-and-pensions-small-and-medium-sized-enterprise-sme-action-plan-2025-to-2028