Source · Select Committees · Scottish Affairs Committee
Recommendation 68
68
Accepted
We heard that geographically targeted measures could be an effective way of involving SMEs in...
Conclusion
We heard that geographically targeted measures could be an effective way of involving SMEs in defence supply chains, such as fostering the growth of industry clusters. Hans Pung of RAND Europe, when asked what the UK Government could do to promote SME involvement, suggested that “the MOD working-with-industry group should really take a hard look at the benefit of industry clusters,” noting that strong maritime clusters in Scotland already exist. The MOD itself recognises the strengths of shipbuilding clusters around the Clyde in the National Shipbuilding Strategy Refresh, and the UK Government’s Maritime 2050 strategy gives a firm commitment to supporting regional maritime clusters, including in Scotland.111 Kevin Craven, Chief Executive Officer of ADS Group, noted that the MOD has already done some work to involve SMEs in defence supply chains through the regional cluster programme.112
Government Response Summary
The MOD outlines the SME Action Plan and initiatives to support SMEs, including the Defence Suppliers Portal, SME champions, and digital outreach. They also note the Department for Transport is the lead for the Regional Maritime Cluster Development Programme.
Government Response
Accepted
HM Government
Accepted
The MOD published the SME Action Plan in 2022 which outlines the commitments being made to increasing and supporting opportunities for Small and Medium Enterprises (SMEs). It recognises that SMEs are at the heart of the vibrant and flexible UK defence industry, supporting a wide variety of high-quality jobs across the UK. The SME Action Plan, sets out how the MOD will further improve the engagement the MOD have with SMEs, focusing on procurement models that are easier to navigate, a recognition of the role the MOD and its major suppliers play in supporting the whole of the defence supply chain, and understanding how best to support innovation and exports for UK suppliers. The MOD also supports the Defence Suppliers Portal which offers SMEs access to view contracting opportunities as both prime contractors and sub-contractors. With the Defence Suppliers Forum SME forum, a number of SMEs and trade bodies collaborate to best inform the MOD how to support SMEs within this area. Through this forum, SME champions have been established within the range of Strategic Suppliers to encourage contracting with SMEs. As part of the overall engagement strategy, the MOD have found digital outreach (including targeted webinars) an effective platform to reach smaller business. Recent outreach activity includes presentations delivered for the Scottish Supplier Development Programme (SDP) at their virtual “Meet the buyer” events. SDP are also part of our trade association network who receive our industry communications for wider dissemination to their membership. With these initiatives, alongside the target to achieve 25% of Defence spend with SMEs to be met this year, the MOD are making in-roads into making it easier for SMEs to do business with Defence. The Department for Transport is the lead Government Department for the Regional Maritime Cluster Development Programme, including the Scottish Maritime Cluster, and they are committed to working together to delivering their shared ambitions.