Policy paper

Department of Health and Social Care small and medium-sized enterprise action plan 2025 to 2028

Updated 24 March 2026

Applies to England

How we are backing your business

Through Backing your business: our plan for small and medium-sized businesses, we are delivering the most comprehensive package of support for small and medium-sized enterprises (SMEs) in a generation.

Growth is this government’s number one mission and SMEs are the engine room. Our plan is to make the UK the best place to start and grow a business, with a culture that supports entrepreneurship in every community and high street.

We’re delivering:

• the most significant legislation to tackle late payments in over 25 years, giving the UK the strongest legal framework on late payments in the G7
• a new Business Growth Service to simplify finding advice and support, including a new streamlined digital offer – business.gov.uk, ending the chop and change of previous government business support programmes
• a package of support tailored to high streets to make it easier for SMEs to set up shop, ranging from a new licensing framework to targeted funding for places
• a massive £4 billion finance boost to increase access to finance for entrepreneurs – to inspire the next generation of small business owners, make the UK the best place to start and grow a business, and build a culture that celebrates and champions entrepreneurs

We are also committed to making SMEs a national priority, ensuring they have a fair opportunity to win public contracts and setting ambitious SME targets for each department. Each departmental SME action plan sets the steps government departments are taking to maximise SME and start-up spend across their department and wider agencies. These plans also include departmental targets for direct spend with SMEs and the actions being taken to remove and reduce barriers to SMEs bidding for government contracts.

The Procurement Act 2023 creates a more simple and transparent procurement regime, making it easier for SMEs to do business with the government. This action plan sets out why SMEs should work with us, where to find opportunities, and the actions we are taking to reduce barriers for SMEs in bidding for work.

The plan is monitored through an annual publication (as a minimum) of our direct spend with SMEs as a percentage of our total procurement spend.

SMEs are suppliers that have fewer than 250 staff, and have a turnover of an amount less than or equal to £44 million or a balance sheet total of an amount less than or equal to £38 million. For more information, see clause 122 of the Procurement Act 2023.

Foreword

Foreword: Karin Smyth MP, Minister of State for Health

This year saw the launch of the Procurement Act 2023, and the National Procurement Policy Statement. These present a unique opportunity for government to put SMEs front and centre of procurement decisions across the public sector, ensuring barriers to their participation in public procurement are actively challenged and removed.

SMEs play a crucial part in delivery across the health ecosystem and, as evidenced through this action plan, there is strong collaboration with SMEs right across DHSC and the health family.

I am proud of the work of my department on this important agenda, and I welcome the increased focus on doing business with SMEs that the act brings. DHSC and the health family are in a period of transformation, which will bring challenges but also opportunities. Within this, I realise there is more that we can do to support SMEs to do business with the health family.

I have set an ambitious SME spend target, and I look forward to working with my officials to deliver on the commitments set out in this action plan to achieve this.

DHSC is fully committed to ensuring SMEs are at the heart of our plans to kickstart economic growth and deliver an NHS that is fit for the future.

Foreword: Stuart Nelson, DHSC Chief Commercial Officer

UK SMEs are recognised as some of the most innovative and agile suppliers in the health and care sector. They are a vital part of our economy and are integral to the government’s economic and health missions.

Engaging with SMEs is a strategic aim for DHSC. The case studies detailed in this report highlight how teams across the department are working together to ensure that SMEs are involved across the business of the department and the wider health family. This is important for:

• improving the diversity of our policy making
• supply chain resilience
• crucially, building an NHS that is fit for the future

I am proud of the work DHSC has done to date supporting the SME agenda. Our Office for Life Sciences (OLS) and medical technology (medtech) teams have SME collaboration woven through their work, and our commercial team is committed to engaging with and learning from SMEs - for example, through the SME engagement event that DHSC hosted last year, which brought SMEs from across industries together to understand how we can make future opportunities more accessible to SMEs.

Details on how we plan to continue and improve on this work are outlined in this action plan. 

Department overview

DHSC supports its ministers in leading the nation’s health and care system, with its overall vision being:

to help everyone to live healthy, independent lives for longer.

DHSC priorities supporting this vision are to make the health and social care system: 

• faster - more timely and convenient access for people who need health and care services
• simpler - more streamlined and easier to navigate modern healthcare services for the public and staff
• fairer - a system that works for all, reducing variation across the country, and making sure that vulnerable and future generations are protected

The department has a significant role to play in the government’s Plan for Change by delivering an NHS that is fit for the future, and harnessing the UK’s innovation, skills and capability in life sciences to kickstart economic growth. To help achieve this, DHSC is supported by specialist agencies and public bodies, which make up the health family, and is organised into the following core work areas: 

• strategy and healthcare policy
• commercial and growth
• adult social care
• technology, data and digital
• finance
• performance and delivery
• people
• system development
• chief nursing officer
• medical
• national priority programmes

DHSC commercial works closely with its executive agencies and non-departmental public bodies (NDPBs) (the health family) to ensure consistency and alignment in the development of commercial policy, enabling these organisations to meet commercial objectives, such as SME spend. The spend target and actions set out in this report encompass all organisations across the health family, including NHS England.

As part of group operations, the DHSC commercial directorate supports the sourcing of all departmental spend with third parties. The directorate’s purpose is to ensure that health and care policy is implemented at best value for money for the taxpayer. We offer specialist commercial skills and expertise that helps to unlock value and generate efficiencies across the health and care system, enabling continual investment in frontline services. This leads to faster, simpler and fairer care. 

SMEs play a crucial role by helping DHSC to deliver on departmental and government priorities on healthcare and economic growth under the government’s Plan for Change. The introduction of the Procurement Act 2023 provides added opportunity to harness the innovations, skills and expertise of UK SMEs in delivering these priorities.

Transformation across the NHS

In March 2025, the Secretary of State for Health and Social Care announced significant reform of NHS England to bring the organisation back into DHSC while, at the same time, allowing for more localised decision making.

This transformation will take place over a period of 2 years with a planned completion date of spring 2027 - this forms much of the period covered by this action plan.

At the time of publication, it is unclear how this transformation will impact the health family’s procurement pipeline and spending profile.

However - as reflected in this action plan and the publication of Doing business with the health sector: a guide for buyers and SMEs alongside NHS England - DHSC remains committed to supporting SMEs to access and benefit from procurement opportunities across the health family.

This is reflected in the proposed SME target for the financial year ending March 2028.

Why SMEs should work with DHSC

Supplier diversity is essential to a healthy economy, creating opportunities for entrepreneurship and supporting economic growth and business creation. SMEs are a vital part of that diversity. It is estimated that small businesses make up 99.9% of the UK’s private sector businesses, account for three-fifths of employment (16 million jobs) and bring in around half of the total annual turnover in the UK private sector (£2.1 trillion)^{[footnote 1]}.

The government wants SMEs to benefit from central government procurement spend, both directly and indirectly through the wider supply chain. DHSC recognises the value that SMEs can bring to our commercial portfolio - SMEs are agile and innovative, and can help lead in the development of new products, services and technologies. 

For DHSC and the health family, this is particularly applicable in the areas of rapid innovation (such as artificial intelligence (AI) and other new healthcare technologies) where there is huge potential for specialist small providers to develop new products and solutions that may help speed up access to health solutions or improve health outcomes through better diagnostics. 

Working with SMEs is critical to government objectives on UK economic growth and SMEs offer a range of potential broader benefits for UK citizens through: 

• leaner, flatter management structures, providing a more personalised customer service experience
• smaller organisations, which often have the speed and agility to respond more flexibly to the customer
• specialist expertise with niche industry knowledge, offering the potential to be more adept in driving innovation
• the locality of SMEs to their customers, which can help in carbon reduction objectives
• the creation of sustainable jobs in local communities

At the same time, we understand the challenges and barriers that SMEs face in contracting with government departments, and DHSC is committed to addressing these across the health family. One example of this is in DHSC’s approach to the application of sustainability policies for SMEs, which is applied on a proportionate and relevant principle with SMEs in mind.

Commercial opportunities at DHSC 

Direct opportunities

One of the most important actions contracting authorities can take is to provide the market with information about current and future public contract opportunities by publishing a forward-looking procurement pipeline, which is outlined in the Procurement Act 2023 (‘the act’). This is of particular benefit to SMEs, as it provides them with time to plan for future work, ensuring a competitive and diverse market. 

Pipeline notices (UK1) for any intended DHSC requirements over £2 million and covered by the act are published on Find a Tender, the central digital platform. UK1 pipeline notices for DHSC and the health family are also published separately on Find a Tender to ensure clarity and transparency. 

DHSC uses Crown Commercial Service (CCS) frameworks, where applicable. As some of these will remain in scope of the Public Contracts Regulations 2015 (until their expiry), DHSC will continue to publish a separate commercial procurement pipeline for these opportunities.

Our pipeline notices provide an 18-month forward look and are reviewed and updated annually. 

Read about how to look at the notices, notifications and the use of data.

Search and apply for contract opportunities.

Joining frameworks, dynamic purchasing systems or dynamic markets 

CCS operates several commercial agreements (frameworks, dynamic purchasing systems, catalogues and low-value purchasing systems), which are designed to help organisations of all sizes sell to the government. They help SMEs sell to 20,000 UK public sector buyers spending over £31 billion a year.

Find out more about CCS agreements and how they work or search the CCS commercial pipeline for upcoming agreements.

Joining a supply chain 

An effective way for SMEs to do business with DHSC and the wider health family is by joining supply chains for individual government contracts. Some government contracts are awarded to larger suppliers (prime contractors) based on the agreement that elements of service delivery will be subcontracted to smaller businesses. This offers access to larger government contracts that SMEs might not secure on their own. This is a good opportunity to build strong relationships with larger companies and gain valuable experience by working with us. 

To find information on DHSC and health family contracts, SMEs can search the central digital platform, Contracts Finder, for contracts that have been awarded to larger suppliers, then engage with those suppliers to offer services and understand the process of accessing their supply chain.

SMEs can also search the UK1 pipeline on the platform for upcoming larger contract opportunities, and the market engagement events linked to these, to understand the requirements, skills and expertise required to fulfil these and track the progress of the contract.

Note also that many government opportunities are open to consortium bids, which provides opportunities for SMEs to access government contracts that may be out of their individual capacity. Industry bodies and trade associations are a reliable source of information as many also advertise opportunities in supply chains. 

For further information on how to do business with DHSC, visit Procurement at DHSC.

Departmental supplier events

DHSC commercial is committed to increasing engagement with suppliers for its procurements to enable us to assess market capacity and tailor our procurement strategies accordingly. 

The nature of these events (national or regional, in person, online or hybrid and so on) is driven by the needs of each procurement. In line with both government and DHSC’s commitments, SME considerations will be central to the planning of these. 

DHSC SME engagement event

To increase our understanding of the challenges facing the SME sector, DHSC held an SME-focused engagement event in March 2024. While we provided some input around DHSC commercial structure and plans, the focus of the event was to hear from the SME community on their experiences of doing business with DHSC commercial and ideas on areas that could be improved. 

Overall, those we spoke to described the experience of doing business with DHSC as positive, but felt there was more DHSC could do in relation to: 

• improving visibility of the procurement pipeline, specifically for opportunities that are suitable for SMEs
• providing feedback to bidders on unsuccessful tenders
• when designing evaluation criteria, ensuring the word counts are proportionate to the evaluation weighting

This feedback has been reflected in the actions set out in this plan.

Both SME participants and DHSC commercial concluded the event was very productive. As part of our action plan, we aim to hold further events to provide a space for SMEs specifically to:

• engage with DHSC
• feedback on overall experiences and processes
• ensure DHSC continues to effectively support SME participation

This will be in addition to any specific market engagement events for individual procurements.

To maximise value for SMEs from these events, we will join up with organisations across the health family to present a view of the aims and objectives of the wider health system and a full pipeline of activity. This will help maximise the time, effort and value derived for SMEs investing in this engagement.

DHSC’s medtech strategy: engaging the SME community

The medtech sector has a crucial role in delivering an NHS fit for the future that is there when people need it - one of the 3 goals of the government’s health mission.

It is also a vitally important industry for the UK economy, representing over half of all life sciences employment, with businesses situated across the UK, and contributing billions of pounds to the economy. SMEs are an important part of the sector, the medtech supply chain and the government’s goal to improve supply chain resilience in UK health.

Business engagement is an important element of DHSC’s medtech strategy, and DHSC takes a multichannel approach to this. The SME community is not always well represented across the usual business channels, so a targeted approach to SME engagement is taken through the NHS England SME advisory group and SME forum. This brings multiple benefits including:

• making sure SMEs are considered in the evolution of the medtech strategy policy and implementation
• creating a joined-up approach that maximises the value and benefits to SMEs when they engage with us, and reduces duplication
• engaging directly with the SME community to ensure they have the guidance and information to support them to do business with DHSC and the health family

SMEs are an important component of the overall medtech market. The market as a whole supports over 150,000 UK jobs across 4,400 UK businesses, including SMEs. The medtech market generates an annual turnover of £34 billion and £10.1 billion in exports^{[footnote 2]}.

Value based procurement workshops

In May 2025, DHSC and NHS England developed and delivered a series of supplier engagement workshops to engage medtech suppliers across the NHS to inform the development of the value based procurement (VBP) policy and accompanying standard guidance.

VBP is an innovative procurement approach that supports patient-centric, high-quality and affordable healthcare. Rather than focusing exclusively on the cost of a product or solution, VBP focuses on how a product or solution can best:

• deliver improved outcomes
• reduce the total cost of care
• provide long-term benefits to all the stakeholders in the health system

Work is underway, in collaboration with NHS England and NHS Supply Chain, to develop national VBP standard guidance for greater consistency and efficiency in local procurement processes. The draft guidance includes a bank of questions, model answers and scoring criteria. This work aligns with development of a digital solution to help provide a side-by-side comparison of devices and a passporting system to accelerate local decision making and streamline evidence validation, avoiding the need for duplicate product assessments. 

This approach offers opportunities to SMEs - who cannot compete on cost alone and often have fewer resources to respond to the varying assessment requests across multiple NHS providers - to do business with the NHS. DHSC remains keen to hear from SMEs about opportunities and challenges relating to the digital submission of evidence.

The industry market engagement sessions, while open to all suppliers, were designed with SME engagement in mind. They ensured that SMEs, especially those not affiliated with trade bodies or member organisations, had the chance to answer questions and provide feedback about this new approach and DHSC’s implementation plans. The events were well attended by 240 SMEs.

Our actions and milestones 

DHSC has set the following commitments, which reflect the ambition of our target and our commitment to removing barriers for SMEs in the department. To develop these actions, we have used:

• learnings from SMEs themselves
• analysis of outcomes for procurements that included SMEs
• the opportunities afforded by the Procurement Act 2023

Appointment of a crown representative for SMEs champion will support DHSC and the health family in co-ordinating activity to drive maximum benefit from the implementation of these actions for SMEs. 

NHS England published its own SME action plan in February 2024. DHSC and NHS England are working together to ensure co-ordination across these plans. 

Improvement action 1

Improve how we engage, communicate with and learn from SME and voluntary, community and social enterprise (VCSE) suppliers.

Benefit to SMEs

Benefits to SMEs include:

• direct engagement with decision-makers in DHSC commercial
• channel to highlight areas for improvement to DHSC commercial
• an opportunity to keep pace with UK government reform and efficiencies programme Update DHSC on innovations, market trends and considerations
• maximum value for SME time spent engaging with DHSC and health family

Milestones

Milestone	Deadline
Hold an annual SME and VCSE engagement event	Quarter 4, 2025 to 2026
Seek opportunities to join up on SME and VCSE engagement with wider health family, to offer increased insight and understanding and ensure SMEs and VCSEs can maximise value from the time spent engaging with DHSC	Ongoing
Implement an annual survey on SME and VCSE experience of doing business with DHSC and the NHS	Quarter 1, 2026 to 2027
Use SME and VCSE engagement events to provide greater transparency on DHSC and health family commercial category and sourcing strategies	Ongoing

Improvement action 2

Set up commercial network group to improve co-ordination on SME action plan delivery across DHSC and the broader health family.

Benefit to SMEs

Co-ordination of efforts across the health family to drive greater consistency of processes and experience from SME perspective.

Milestones

Hold regular cycle of meetings (quarterly or half yearly) for health family co-ordination group (from July 2025).

Improvement action 3

Improve visibility of DHSC procurement opportunities and encourage SME participation in our commercial activity.

Benefit to SMEs

Increase SME awareness of forthcoming procurement opportunities within DHSC commercial to help SMEs to plan and prepare for tendering opportunities.

Milestones

Milestone	Deadline
Publish UK1 pipeline notice and update annually	From May 2025
Publish pipeline setting out procurement opportunities below £2 million to support visibility of smaller procurements more suited to SMEs	Ongoing
Use Procurement Act 2023 preliminary market engagement notices to ensure SMEs are informed of upcoming opportunities	Ongoing

Improvement action 4

Appoint SME category champions within each commercial category to advocate for the SME agenda and drive change across DHSC commercial.

Benefit to SMEs

SMEs benefit from frontline commercial practitioners actively promoting their agenda across commercial and the wider department, using their experience to drive improvements.

Milestones

Milestone	Deadline
Category team champions identified	By June 2025
Regular cycle of meetings for category champions group	Established by June 2025
Senior-level SME champion for DHSC commercial to co-ordinate improvement ideas and feed into wider health family co-ordination group	From September 2025
Undertake an internal awareness campaign to ensure that SMEs are considered at every stage of the procurement process	Ongoing from September 2025

Improvement action 5

Continuous improvement on procurement processes to:

• reduce undue complexity or other barriers to SME and VCSE participation
• improve our understanding of the issues and barriers faced in working with us
• prioritise actions to mitigate and reduce them

Benefit to SMEs

Reduction of barriers to participation from SME perspective.

Milestones

Milestone	Deadline
Collate post-procurement feedback from SMEs to identify and address common themes	Quarter 1, 2026 to 2027
Assess departmental framework spend data and measure SME share to identify improvement opportunities	As part of category champions quarterly reviews from June 2025
Ensure teams are appropriately considering and using opportunities under PPN005: reserving below threshold procurements	Ongoing
Include SME considerations as part of standard procurement documentation templates	Ongoing
Include SME considerations for inclusion in category strategies as they are developed or refreshed	From January 2026

Improvement action 6

Continuous assessment of DHSC indirect SME spend to drive improvements.

Benefit to SMEs

Improve occurrence of SMEs and VCSEs obtaining DHSC business through our prime supplier.

Milestones

Milestone	Deadline
Increase focus of indirect spend in tender documentation where applicable	Ongoing
Engage with our prime contractors through supplier relationship management activity to understand any barriers to SME engagement and drive accurate reporting of indirect spend	Ongoing
Nominate a health family crown representative as SME champion for health to promote SME access to opportunities through the wider health supply chain	June 2025
In line with section 50 of the Procurement Act 2023, provide an ‘assessment summary’ that provides information to enable a relevant supplier to understand why its tender was either successful or unsuccessful	Ongoing from March 2025

Case studies 

Supporting SMEs through OLS’s Healthcare Goals programme 

Supporting SMEs through OLS’s Healthcare Goals programme is essential for driving innovation and economic growth.

The programme, led by ministerially appointed international experts, collaborates with partners across the public, private and philanthropic sectors to deliver bespoke initiatives that support the development and adoption of new medicines and medical technologies.

Supporting and funding SMEs through these initiatives is crucial for:

• fostering innovation
• ensuring the UK remains globally competitive
• improving healthcare outcomes by integrating advanced solutions into the NHS

Some examples of how the Healthcare Goals programme is working with SMEs follow. 

Addiction Healthcare Goals

The programme has awarded £12.5 million to support 17 research projects through the Reducing Drug Deaths Innovation Challenge and the National Institute for Health and Care Research (NIHR) i4i Addiction: Innovation for Treatment and Recovery Awards.

Fifteen companies - including 12 SMEs, start-ups or university spin-outs - either lead or are partners in these projects.

SMEs that secured funding through these competitions are benefitting not only from the immediate financial injection, but also from:

• engagement and support from academic partners and project managers
• signposting of additional UK government support for innovators

Cancer Healthcare Goals

The programme provided £11 million to support the development and commercialisation of 6 early cancer diagnosis innovations at technology readiness levels 3 to 6 through the OLS NIHR i4i Early Cancer Diagnosis Clinical Validation and Evaluation programme.

These projects, co-led by an academic institution and an SME partner, offer SMEs clinical validation of technologies and approaches in a clinical setting and prepare for CE/UKCA marking and regulatory requirements for further development. 

Dementia Goals

Innovate UK launched a Small Business Research Initiative Innovation Competition and provided £6 million across 10 projects to accelerate innovations in dementia biomarker detection.

Additionally, Innovate UK awarded 4 UK companies a share of £4 million funding to test and validate their biomarkers in a large, diverse group of people as part of the Bio-Hermes-002 study.

Innovate UK also invested £2 million to develop a quick and easy digital test for patients’ cognitive functions.

This funding has been crucial for SMEs, allowing them to resource these projects as well as signalling strong government support for dementia-related SME innovations. 

Mental Health Goals

Part of the Mental Health Goals programme, the Mental Health Translational Research Collaboration (MH-TRC) Mission has provided funding to the MindTech HealthTech Research Centre.

The MindTech team works directly with companies - largely SMEs - to support the real-world use of their products. 

Improving the mental health of children and young people by funding early intervention hubs 

The aim of this procurement was to award a minimum of 10 contracts for the delivery of children and young people’s mental health hubs for a 12-month term, with the option to extend for a further 12 months subject to funding availability. These hubs were designed to offer early intervention services specifically tailored for individuals between the ages of 11 and 25.

The initial project budget of £3.1 million was secured through HM Treasury’s Shared Outcomes Fund. This funding was complemented with additional resources to conduct a comprehensive evaluation of the services’ impact by financial year ending March 2025.

Before the tender process closed, additional funding was secured, allowing a total of 24 contracts to be awarded. Following the success of the initial contract term, a decision was made to enact the extension. A total of £13.3 million has been invested in these services. 

To maximise the participation of suppliers (including SMEs) and attract a variety of submissions across the whole of England, we took the following approach:

Preliminary market engagement

DHSC conducted a preliminary market engagement to test the proposed specifications, evaluation approach and budget.

This step allowed us to gather insights from potential suppliers and refine the requirements based on their input, ensuring a more effective procurement process. 

Open tender procurement 

To maximise supplier participation, we determined that an open tender procurement method would be followed.

Geographical division

The procurement was divided into 2 geographical areas: north and south of England. A minimum of 5 contracts were allocated to each region with any additional contracts allocated in equal terms.

This division aimed to ensure equal regional delivery of services.

Flexibility in tender submission

Suppliers had the option to submit tenders for one or both geographical areas, allowing them to focus on regions where they had expertise or interest.

No minimum financial requirements

We did not impose any minimum financial requirements in the contract, enabling a wider range of suppliers to participate, including SMEs and VCSEs.

Maximum contract value

Each contract had a maximum value of £310,000 excluding VAT. However, suppliers had the opportunity to apply for lower funding if it was viable within the context of their proposed delivery model.

Outcome

There were 75 firm bids submitted to DHSC commercial and 85% of these were SMEs or VCSEs. Of the final 24 contracts that were awarded, 8 (33%) were to SMEs or VCSEs.

The learning from this exercise was that there was not a single overriding factor in achieving 33% of contracts being awarded to SMEs or VCSEs, but more a combination of factors. These included:

• effective market engagement with potential suppliers and being responsive to their feedback
• taking a flexible approach to lots based on geographical division, which plays more to a local supplier agenda
• not imposing set or unrealistic financial size requirements

You can learn more about why early support hubs are important on Mind’s Fund the Hubs and the Children and Young People’s Mental Health Coalition’s Early intervention through early support hubs web pages. For an example of a hub, see High Wycombe’s Youth Enquiry Service (Y.E.S Wycombe).

UK Rare Disease Framework - encouraging innovation through the SME network

Rare diseases are those that affect less than 1 in 2,000 in the general population. There are over 7,000 different conditions and around 80% have a known genetic cause. Although they are individually rare, they are collectively common with around 1 in 17 people affected, which amounts to over 3.5 million people living in the UK.

Only about 5% of rare diseases have an effective therapy and developing treatments can be challenging and costly. The UK has strengths in rare disease research and an active life sciences sector working to develop therapies. One of the 4 priorities of the UK Rare Diseases Framework is to improve access to specialist care, treatment and drugs, and a cross-cutting theme is pioneering research.

Through the England Rare Diseases Action Plans, we have worked closely with the BioIndustry Association (BIA) to understand and address challenges for its member organisations. Over 60% of BIA’s 600 members are SMEs, with UK biotechs such as Mereo BioPharma, Purespring Therapeutics and Silence Therapeutics active in developing therapies for rare conditions.

Successes from UK-based SMEs include Orchard Therapeutics, a University College London spin-out now owned by Japanese pharmaceutical company Kyowa Kirin, which developed a life-saving gene therapy treatment for the rare, fatal disorder metachromatic leukodystrophy. This treatment is now available on the NHS.

Examples of how we have worked with BIA to understand SME perspectives include the following: 

Mapping the rare disease research landscape

BIA contributed to our UK Rare Diseases Research Landscape Project Report, published in 2024. This mapped UK rare disease research by industry, NIHR, the Medical Research Council and charities to identify gaps, priorities and levers for change.

Improving access to rare disease therapies

DHSC worked with BIA to understand how well the following 3 access pathways are working for their members who are developing rare disease therapies:

• Early Access to Medicines Scheme (EAMS)
• Innovative Licensing and Access Pathway (ILAP)
• Innovative Medicines Fund (IMF)

The Medicines and Healthcare products Regulatory Agency, NIHR and NHS England reviewed the results of a survey, and then came together to consider how the pathways could be improved to work more effectively for rare disease therapies and produce a joint response.

Overcoming data challenges 

BIA are members of our Advanced Therapies Co-ordination Data Working Group, helping to feed in member perspectives and shape solutions to the data challenges that are specific to cell and gene therapies.

Our spend with SMEs

DHSC’s SME direct spend target, to be achieved by March 2028, is 15%.

DHSC is committed to ensuring SMEs can benefit from the procurement opportunities available through DHSC’s delivery of the Prime Minister’s Plan for Change. This is reflected in both the direct and indirect spend targets we have set. DHSC takes a data-led approach to analysing and setting targets for third-party spend with SMEs.

DHSC and the wider health family is going through a period of change that is expected to last up to 2 years (the bulk of this target period), which brings a high level of uncertainty over our future spend profile. This is reflected in the targets we have set, which we consider to be stretching in the current environment.

We will continue to review and challenge the barriers to SMEs doing business with DHSC.

Direct spend

Table 2: DHSC and health family direct spend with SMEs^{[footnote 3]}

Financial year	Direct spend with SMEs target (%)	Total procurement spend (£)	Direct spend with SMEs (£)	Direct spend with SMEs (%)
2020 to 2021	12.9%	£13,375,144,550	£3,113,611,048	23.3%
2021 to 2022	13%	£11,548,362,051	£1,636,299,941	14.2%
2022 to 2023	13%	£6,655,184,603	£501,541,872	7.54%
2023 to 2024	13%	£5,097,680,027	£660,001,972	12.9%
2024 to 2025	13%	£6,051,478,092	£778,074,406	12.86%

The data in table 2 above shows a decrease in the percentage of total procurement spend with the SME sector.

A primary reason for this is because the early stages of the COVID-19 pandemic saw a rapid increase in procurement opportunities for SMEs. SMEs were involved in several contracts either directly contracting or providing support in personal protective equipment (PPE) and Test and Trace contracts, which was reflected in the increase in SME spend captured in data for financial year ending March 2021.

Indirect spend 

Recognising the importance of the supply chain in achieving our ambitions on SME spend, DHSC began collecting data on indirect SME spend across the health family in 2020. 

Data shows that DHSC is strong in this area, with indirect SME spend increasing year on year. This is an important mechanism for achieving DHSC’s ambitions of:

• supporting SMEs to do business with the department and wider health family
• improving the diversity and resilience of the supply chain

Considering this, DHSC has also set a voluntary SME indirect spend target of 8%. 

Table 3: DHSC and health family indirect spend with SMEs

Financial year	Indirect spend with SMEs target (%)	Total procurement spend (£)	Indirect spend with SMEs (£)	Indirect spend with SMEs (% )
2020 to 2021	9.9%	£13,375,144,550	£249,793,829	1.90%
2021 to 2022	10%	£11,548,362,051	£342,382,063	3.00%
2022 to 2023	10%	£6,655,184,603	£271,428,503	4.08%
2023 to 2024	10%	£5,097,680,027	£342,039,945	6.7%
2024 to 2025	10%	£6,051,478,092	£370,000,000	6.11%

View historical central government spend with SMEs.

Executive agencies and non-departmental public bodies (NDPBs)

This section will be updated annually for the above-mentioned health family bodies, following publication of this action plan. These figures will be included in DHSC’s overall figures above at table 2. However, for transparency purposes, it will be split out into: 

• total of DHSC’s executive agencies and NDPBs’ direct spend with SMEs
• individual executive agency and NDPB’s direct spend with SMEs

Our payment performance 

The public sector is required to pay their suppliers in 30 days and report on their performance on an annual basis. Thirty-day terms also apply in public sector supply chains. Late payment is an issue for businesses, particularly smaller businesses, as it can adversely affect their cash flow and jeopardise their ability to trade. The government recognises that the public sector should set a strong example of prompt payment.

DHSC is leading by example by paying our suppliers promptly and will, as per the requirement under the act, ensure this flows through to our supply chain. Our department’s latest payment performance is set out below. 

Latest report covering quarter 1 (April to June) 2025: 

• 93% of invoices were paid within 5 days
• 99% of invoices were paid within 30 days

View our payment statistics.

View further information on government’s payment policy and legislation.

SME hub 

The small and medium business hub is a dedicated space for SMEs looking to work with the government. Here you will find links to other departmental action plans and centralised guidance on bidding for government work. 

Contact us 

Department of Health and Social Care

Email: commercialops@dhsc.gov.uk 

Find out more about DHSC.

1. Department for Business, Energy and Industrial Strategy. Business population estimates 2022. 2022. ↩

2. See section 5 of ‘Life sciences competitiveness indicators 2024: summary’ on Life sciences sector data, 2024 and Medical technology strategy: one year on. ↩

3. Spend figures provided are for the wider health family - meaning that, in addition to DHSC, all the relevant health family bodies are included (NHS England spend figures are included from financial year ending March 2025, but not in previous years). As set out in new guidelines for SME spend reporting, NHS England will be included in DHSC’s SME spend figures from financial year ending March 2026. In addition to this, SME spend for 4 of DHSC’s health family bodies (NHS England, the NHS Business Services Authority, the UK Health Security Agency and NHS Blood and Transplant) will also be reported individually in annual updates to this action plan from financial year ending March 2027. ↩