Source · Select Committees · Scottish Affairs Committee
Recommendation 24
24
Accepted
Paragraph: 71
The Ministry of Defence should report back to us at the end of the financial...
Recommendation
The Ministry of Defence should report back to us at the end of the financial year to confirm whether it met its target of spending 25 per cent of its procurement spend with SMEs. In addition, it should provide an update on what proportion of its spend with SMEs is spent with Scottish SMEs.
Government Response Summary
The MOD stated that they had a target of 25% SME procurement spend by the end of 2022, with Scottish SMEs playing a significant role, and that figures are being gathered and will be published. They also stated that regional statistics for FY21/22 have been published and confirm £67M went directly to Scottish SMEs, representing 7% of direct SME spend.
Paragraph Reference:
71
Government Response
Accepted
HM Government
Accepted
24: The MOD had a stretching but achievable target that 25% of its procurement spend going directly and indirectly to SMEs by the end of 2022, and the Department expects Scottish SMEs played a significant role in the aim to achieve this target. The figures for Financial Year 2021/22 are currently being gathered and will be published on Gov.uk in as part of the annual data on central government SME spend. Regional statistics for Financial Year 2021/22 have recently been published and confirm that £67M went directly to Scottish SMEs in that year, representing 7% of our total direct SME spend. This is in line with the Financial Year 2019/20 figure and broadly reflects the proportion of the Department’s spend with Scottish suppliers, which is around 9.5% of the MOD’s total spend with industry. It is also worth noting that direct spend only accounts for a small proportion of our overall spend with SMEs in the defence supply chain. Three quarters of the MOD’s spend with UK SMEs occurs within the supply chain of prime contractors. The true contribution of Scottish SMEs to UK defence will therefore be substantially greater than the direct spend figures alone suggest.