The Department for Science, Innovation and Technology (DSIT) has set out a new action plan to support small and medium-sized enterprises (SMEs) from 2025 to 2028—part of the government’s wider mission to deliver economic growth and back Britain’s entrepreneurs.
At the heart of the plan is a simple idea: SMEs are the engine of the UK economy, and growth depends on giving them the tools to succeed.
A new deal for small businesses
The government says it is delivering the most comprehensive package of SME support in a generation, with measures designed to make the UK the best place to start and grow a business.
Key commitments include:
- Tough new action on late payments – the biggest legislative change in over 25 years, creating what ministers say will be the strongest framework in the G7
- A new Business Growth Service – simplifying access to advice and support, replacing the fragmented system SMEs have faced in recent years
- Targeted support for high streets – including easier licensing and place-based funding to help local businesses thrive
- A £4 billion finance boost – aimed at improving access to capital and inspiring the next generation of entrepreneurs
Opening up government contracts
The plan also puts SMEs at the centre of public procurement.
Under the Procurement Act 2023, the government is promising a simpler, more transparent system that makes it easier for smaller firms to win public contracts.
Each department—including DSIT—will now set clear SME spending targets and publish progress. DSIT has committed to:
- Spending 40% of its procurement budget with SMEs by 2028
- Improving prompt payment rates to 95% within 10 days
- Publishing a three-year pipeline of opportunities to give businesses more certainty
Breaking down barriers
The plan recognises long-standing frustrations from SMEs about access to government work—and sets out steps to address them:
- Simplifying procurement processes and reducing bureaucracy
- Increasing visibility of opportunities, including subcontracting roles
- Expanding engagement with SMEs, especially in fast-growing sectors like AI and life sciences
- Improving transparency around grant funding
There is also a focus on innovation, with DSIT working across government to connect start-ups and scale-ups with public sector demand through new initiatives like an “Innovation Marketplace”.
Why it matters
Ministers argue that boosting SME participation is essential not just for growth, but for resilience and innovation. Smaller firms play a key role in:
- Driving adoption of emerging technologies
- Strengthening supply chains
- Creating high-quality jobs across the UK
A plan in transition
The department acknowledges that the full picture is still evolving. Ongoing restructuring—including the integration of the UK Space Agency and Building Digital UK—means a complete action plan will be published in autumn 2026.
But the direction is clear: SMEs are now a national priority, with government looking to back them not just with rhetoric, but with concrete reforms and investment.