The Competition and Markets Authority (CMA), the UK Competition Regulator, published "Public procurement in the national interest" on 8 September, fronted by chair Doug Gurr and chief executive Sarah Cardell1. The paper examines how the state buys from the small and medium-sized enterprise (SME) sector, against the roughly £400 billion the public sector spends on procurement each year.
Its central sentence separates two things British policy has treated as one. "A system optimised to increase the number of SMEs participating is not necessarily the same as a system optimised to support future high-growth, innovative firms," the regulator writes. Counting suppliers rewards breadth. Buying unproven technology rewards a handful of companies that can scale, and the two targets pull procurement officers in opposite directions.
The fifth recommendation asks government to turn procurement from buying known technologies at the lowest risk into a tool for discovering and scaling frontier technologies, meaning technology not yet proven commercially at scale. British policy has instead aimed its procurement levers at participation counts, which leaves the largest single pot of money available to a British scale-up pointed somewhere else.
State money reaches these companies through several channels, and buying power dwarfs the rest. The British Business Bank guaranteed £6.5 billion of smaller-business lending across four years, a programme large enough to matter and still an order of magnitude below what the state spends buying things. Procurement reform costs no new money, which is what makes the CMA's question awkward to answer and cheap to act on.
