21SEP

CMA asks who £400bn procurement buys

2 min read

16:52UTC

The Competition and Markets Authority published "Public procurement in the national interest" on 8 September, questioning whether a system built to count small suppliers does anything for the firms that grow.

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Key takeaway

The CMA says counting small suppliers and backing firms that scale are different objectives.

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 Cardell ¹. 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.

Deep Analysis

In plain English

The Competition and Markets Authority, the UK's competition watchdog, published a report asking whether the way government spends roughly £400bn a year on contracts, everything from IT systems to construction, makes it too hard for new, fast-growing companies to win that business. The concern is that government tends to keep buying from the same large, familiar suppliers because they are easier to qualify and less risky to pick, even when a smaller company might offer a better or cheaper solution.

Deep Analysis

Root Causes

Public sector framework agreements and pre-qualification questionnaires are built around evidence of prior delivery at scale, financial resilience tests, and standing accreditations, criteria that established suppliers accumulate over repeated contract cycles and that a younger, innovative firm has not yet had the chance to build.

That structural feature, not any single procurement officer's preference, is what the CMA's roughly £400bn question is really aimed at: whether the qualifying criteria themselves are calibrated for continuity over innovation.

What could happen next?

Opportunity
If the CMA's findings lead to simplified qualification routes, high-growth UK firms would gain a larger addressable market in public sector contracts than they currently have.

Source Landscape

This story draws on neutral-leaning sources

Consensus view: Public sector framework agreements and pre-qualification requirements are built around evidence of prior delivery at scale and long compliance track records, criteria that established suppliers accumulate over repeated contract cycles and that structurally favours incumbents over the same growth-market angle the CMA's report now questions.

Counter-view: The barrier may be less about deliberate bias toward incumbents and more about the sheer cost and complexity of bidding itself, a cost a smaller, innovative firm often cannot absorb regardless of how the contract is eventually awarded.

Key tension: Whether reforming procurement to favour high-growth firms means changing who wins existing contract types, or redesigning the bidding process itself so smaller firms can afford to compete for them at all.

Sources:Competition and Markets Authority

Mentions:Competition and Markets Authority →Doug Gurr →Sarah Cardell →British Business Bank →

First Reported In

Update #15 · Nscale takes $103.4bn of contracts to NYSE

Competition and Markets Authority· 21 Sept 2026

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Dame Chi Onwurah and the Science, Innovation and Technology Committee

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The Entrepreneurs Network

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New Economics Foundation

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Competition and Markets Authority

The CMA's 8 September report on public procurement asked whether Britain's roughly GBP400bn state-spending system is built to grow high-potential firms rather than simply widen SME participation. Its Recommendation 5 calls for a dedicated frontier-technology procurement framework, an official acknowledgement that today's design may serve the wrong target.

Highland Europe

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