Competing Agendas in Public Procurement: An Empirical Analysis of Opportunities and Limits in the UK for SMEs

Abstract

Government procurement policy in the UK is an uneasy mixture of different policy legacies, where the dominant objectives of cost-efficiency and value for money compete with alternatives which emphasise public procurement as central to innovation policy and/or a critical demand-side instrument in local and regional economic development. Quantitative analysis of which types of small and medium-sized enterprises (SMEs) benefit, and how, from different levels of government as a customer is, however, rare in the UK (and indeed more widely across the EU). Utilising data from the Federation of Small Businesses 2008 biannual survey, we address this important task. Results reveal different patterns of procurement depending on the territorial scale of government, in terms of both the innovativeness of SMEs supported through public procurement as well as demand-side contributions to local and regional economic development, allowing us to judge future possible policy directions with regard to the use of public procurement.