29 September 2026
A growing debate around how public money is spent is putting UK public procurement and access to government contracts for British businesses firmly in the spotlight.
New analysis by the GMB union and procurement analyst Tussell, reported by The Times, found that public sector bodies spent almost £17 billion in 2024–25 with private equity-backed companies whose ultimate owners were based overseas. The analysis identified £31 billion in public spending with private equity-backed suppliers, of which £16.99 billion was classified as overseas-owned and £13.68 billion as domestic.
The figures measure the location of a company’s ultimate owner rather than where the contracted work itself was carried out, an important distinction when considering the potential impact on UK jobs and supply chains.
The findings have renewed calls for public procurement to do more to support domestic businesses, particularly SMEs, manufacturing and local supply chains.
A changing approach to UK public procurement
The debate comes as the government prepares to introduce a new Social Value Model for central government procurement.
Under PPN 026, the government states that its objective is for public procurement to support British businesses, economic growth and local communities. The model focuses particularly on good jobs and skills, including the creation or retention of high-quality jobs, addressing local skills shortages and providing opportunities such as apprenticeships and work placements.
The new model will apply to relevant central government procurements commencing from 1 January 2027. It applies to central government departments, their executive agencies and non-departmental public bodies, with covered procurements generally applying to contracts worth £1 million or more.
The government has also confirmed that the reforms are intended to support British businesses while remaining consistent with the UK’s international agreements and obligations.
The Cabinet Office has described public procurement as a significant economic lever, with government stating that its procurement activity is worth around £90 billion a year.
What could this mean for UK SMEs?
For smaller manufacturers and suppliers, access to public procurement contracts can provide an opportunity to build capacity, invest in skills and create more secure employment.
However, SMEs can face significant barriers when attempting to compete for large public sector contracts. These can include the scale of contracts, complex tendering processes, administrative requirements and the ability to demonstrate the necessary capacity and compliance.
The government’s new Social Value Model explicitly recognises the role SMEs can play. Procurement organisations are expected to research market conditions, including whether SMEs and voluntary, community and social enterprises are present in the relevant market, before selecting appropriate award criteria.
For UK manufacturing, this could create an opportunity to connect public-sector demand with existing domestic production capacity.
Jenny Holloway: “The ATMF has created the consortium and we’re ready to go”
Jenny Holloway, Chair of the Association of Textile Manufacturers (ATMF), has been campaigning for greater access to public procurement contracts for UK SMEs.
Holloway said:
“For the last 18 months we have been campaigning for SMEs to be awarded Public Procurement contracts and this is why we have partnered with Community TU, who have the backing of 71 MPs. We are also working closely with the Garment and Textiles Workers Trust too, and the report on ‘Unifying the Voice for Public Procurement’ is due out in October.”
She added:
“The ATMF has created the consortium and we’re ready to go! We have three asks in with David Lammy and we’re going to secure those much-needed orders for factories.”
The campaign reflects a wider industry interest in ensuring that public procurement creates opportunities for smaller domestic manufacturers and that UK production capability is considered when public contracts are designed and awarded.
From procurement to productive capacity
The potential impact goes beyond individual contracts.
For UK factories, consistent access to orders can provide greater certainty, allowing businesses to plan production, retain skilled workers and invest in equipment and training.
A stronger domestic order book can also support wider supply chains, from fabric and component suppliers through to logistics, finishing and other specialist services.
This is particularly relevant for sectors such as textiles and apparel, where maintaining domestic manufacturing capacity can be linked to wider questions around resilience, skills and the ability to respond to changing demand.
The government’s new procurement model places a greater emphasis on jobs and skills, with award criteria covering areas such as creating or retaining high-quality jobs, supporting fair working conditions and addressing skills shortages.
The opportunity for British manufacturing
The current debate raises an important question for public sector procurement: how can government spending deliver value for taxpayers while also supporting the UK’s industrial base?
The answer will depend not only on who ultimately owns a supplier, but also on where economic value is created, where workers are employed, where supply chains are located and what long-term capacity a contract helps to build.
The new Social Value Model is intended to bring some of these considerations further into the procurement process. Government guidance states that social value should be considered throughout the commercial lifecycle, with commitments from successful suppliers capable of being monitored through contractual mechanisms and key performance indicators.
For SMEs, the practical question will be whether these changes translate into genuine opportunities to compete for and deliver public contracts.
A potential turning point for UK SMEs
The introduction of the new Social Value Model does not guarantee that public contracts will be awarded to UK SMEs, nor does it prevent international suppliers from competing where procurement rules require them to be eligible.
However, the policy marks a clearer focus on jobs, skills and local economic benefits within central government procurement.
For organisations such as the ATMF, the focus now is on turning that policy direction into practical opportunities for manufacturers.
As Jenny Holloway puts it, the consortium established by the ATMF is “ready to go”, with the objective of helping UK factories access the orders they need to sustain and grow their businesses.
With the new procurement framework due to apply from January 2027, the coming months could therefore be significant for British SMEs seeking a greater role in the public supply chain.
The wider question is whether the billions of pounds spent through UK public procurement can be used not only to purchase goods and services, but also to strengthen domestic manufacturing, develop skills and create resilient supply chains for the future.