1. Foreword

I am delighted to launch the Small and medium enterprises (SMEs) action plan, as the culmination of our first year working with the SME Advisory Group.  The purpose of the SME Advisory Group, over the past 12 months, has been to advise myself, the NHS Commercial team, and the wider system, on issues affecting SMEs in doing business with the NHS and on improving the opportunities for SMEs to engage with and compete for NHS business. The SME community has a more significant role than ever in supporting our health service to deliver on its priorities for patients and staff.  Over the next 2 years, I look forward to delivering on the objectives outlined in this plan and making the NHS a place where SMEs can thrive, for the benefit of our patients.

Jacqui Rock, Chief Commercial Officer, NHS England
Chair of the SME Advisory Group

SMEs are crucial to the UK economy; they contribute to job creation, adapt quickly, innovate and are the backbone of local communities. The SME Advisory Group is an important step in bringing SME suppliers together with NHS England and other system partners to create a positive ecosystem, which encourages SMEs to not only survive but thrive for the benefit of patients. Since our group first came together, we have had regular and positive dialogue, underpinned by the collaborative development of this action plan. We believe this will be a springboard to a beneficial and sustained advance in supporting SME suppliers to continue to be a cornerstone of UK plc and the NHS.

Graeme Cameron, CEO, Pennine Health
Vice-chair of the SME Advisory Group

2. Our action plan

This plan sets out how we will help to deliver on our commitment to small and medium enterprises (SMEs) and enable the NHS to benefit from their significant value and contribution to patient care.  

This requires us to work together with other parts of the NHS, to harness the expertise of SMEs through the SME Advisory Group and use this to fundamentally change the way that the NHS does business with this vital sub-group of suppliers.

Small and Medium Enterprise Advisory Group

Working with the Department of Health and Social Care (DHSC) and NHS Supply Chain, NHS England has established the SME Advisory Group to advise NHS Commercial on issues affecting SMEs and their experiences with doing business with the NHS. Its focused is on improving the opportunities for SMEs to engage with and compete for NHS business. The group has an advisory role and does not have decision-making responsibilities. The group does not consider or discuss individual procurements or seek to influence current commercial opportunities.

The group consists of 12 SME businesses, spanning the sectors that the NHS buys from, and provides valuable insight into the SME health sector market. The businesses involved are:

Pennine Healthcare

• Euroimmun
• West Country Milk
• Big Health (Sleepio)
• CK Facilities Management
• Eleanor Hospital Logistics
• Inhealthcare
• P3 Medical
• Patients Know Best
• Lexica
• Concerto
• Cloud 21

Membership was by both open application and specific invitations and Graeme Cameron, CEO, Pennine Healthcare was appointed Vice Chair. NHS representation on the group is the NHS England Chief Commercial Officer (Chair), SME Engagement Lead, NHS Supply Chain and Integrated Care System commercial representatives.  Membership is reviewed annually. The group has identified a number of key actions within the plan that should be addressed first, these are marked accordingly.

Action plan objectives

As a result of working with the SME advisory group and other parts of the NHS, our action plan has been developed with the following commitments:

We will continue to give small and medium enterprises a clear voice and lead the activities of the SME Advisory Group

Our aim is that the SME Advisory Group will provide a focus for ongoing dialogue, and that collectively, we will deliver real change to support smaller suppliers. We asked the SME members to develop a list of their highest priority concerns that if addressed would make the greatest difference to the business. The groups’ key priority is to explore the routes and guidance available for SMEs struggling to continue to provide services to the NHS due to circumstances outside of their control – we labelled this “SME mayday”.

The group has also identified a number of key actions within the plan that should be addressed first, these are highlighted in bold.

We will continue to:

• Work with the group to identify and address their highest priority concerns.
• Investigate what support and guidance is available and how this is communicated with SMEs.
• Build case studies to capture “mayday” evidence, experienced by SMEs.
• Test and challenge the guidance to confirm it meets the lived experience and delivers effective solutions.

By 2026 or earlier we will:

• Develop advice and signposting library to share solutions to common problems within the SME community.

We will better engage, communicate with and learn from the small and medium enterprise community

Increasing engagement with SMEs will help the NHS understand the issues and decide on the actions required to improve SME access to opportunities, whilst also educating and informing suppliers on what we do, how we procure and our pipeline of work.

We will continue to:

• Have an accountable, senior SME board representative.
• Hold a minimum of 3 SME advisory group meetings per annum to allow SMEs to engage with the NHS on key issues and concerns.
• Benchmark with other public sector organisations to identify and adopt examples of good practice which have enabled SMEs to enter the supply chain with ease.
• Engage with SMEs, through the advisory group and other channels, to improve our understanding of the issues/barriers faced in working with us, and prioritising actions to mitigate and reduce them.
• Have a dedicated team to manage supplier relationships and queries.
• Review the makeup of the SME group to ensure appropriate representation is in place (including Crown representatives, Integrated Care System procurement leads and the Health Care Supply Association).

By 2026 or earlier we will:

• Develop case studies which give the SME perspective of doing business with the NHS and publicise those that help promote success (advisory group priority action).
• Assess our framework spend data (and, longer term, non-framework spend) and measure SME share of this route to market to help inform future actions.
• Engage with our strategic suppliers to gather indirect supply chain spend.
• Investigate unsuccessful SME procurement submissions to identify any common themes and address accordingly.
• Strengthen our dialogue with SMEs across different tiers of our supply chain to identify barriers to working with NHS strategic suppliers.
• Appoint SME category champions to act as an advocate for the SME agenda, drive change and embed across the NHS in England (advisory group priority action).
• Establish a quarterly SME community of practice which aims to share best practice, coordinate commercial SME activity, share knowledge and intelligence of the SME community and push positive change.

We will improve visibility of the NHS opportunities and encourage small and medium enterprise’s participation in our commercial activity

Improving the visibility of NHS opportunities and increasing market engagement activity so that all bidders, including SMEs, have all the appropriate and relevant information which supports engagement and improved bids.

We will continue to:

• Conduct 6 monthly reviews of NHS England’s procurement pipeline and make amends where necessary, ensuring that SMEs can easily identify appropriate procurement opportunities.
• Provide further support to category teams, supporting them to run extensive pre-market engagement (eg face-to-face events, webinars, 1-1’s) with SMEs, allowing them the opportunity to actively contribute to policy shaping.
• Hold early market engagement events online, by default, to remove barriers to participation.

By 2026 or earlier we will:

• Carry out an annual survey measuring SME experience of doing business with the NHS (advisory group priority action).
• Hold market engagement events at a category level to help the NHS to better understand market drivers and capability, and to encourage SMEs to work with us – either directly or through our supply chain.
• Seek to enhance SMEs understanding of NHS tendering processes, and how to bid effectively.
• Post the introduction of the new public procurement regulations, undertake an internal awareness campaign, to ensure that SMEs are considered at every stage of the procurement process (advisory group priority action).
• Provide greater transparency on category and sourcing strategies.

We will leverage the innovation power of small and medium enterprises for the benefit of the NHS

SMEs contribute hugely to the creation of novel and disruptive innovations that can dramatically enhance both the patient outcomes and our operational efficiency. It’s essential that the NHS is engaged in the early stages of development and supports SMEs to get innovations to the frontline at speed and at scale.

We will continue to:

• Use the innovation service to sign post SMEs to procurement opportunities.
• Support the Health Innovation Network (HIN) (formerly known as AHSNs) to provide an SME support service in their regions.
• Use and increase usage of dynamic purchasing systems (DPS).
• Continue to act in collaboration with the Medicines and Healthcare products Regulatory Agency and the National Institute for Health and Care Excellence (NICE) to support market access and provide simpler ways to generate robust, real-world evidence.
• Continue to support SMEs through the clinical entrepreneur programme.

By 2026 or earlier we will:

• Improve guidance, education and clarity on the correct process for innovation in order to encourage and increase use of innovation resources and support mechanisms (advisory group priority action).
• Link into the collaboration charter (currently in development with the NHS Supply Chain Care Pathway team) to provide a strategic overview over who is doing what regarding innovation (early in discussion and formation between NHS Supply Chain, NICE, HIN, Department of Health and Social Care (DHSC).
• Review our approach and improve guidance on how to integrate onto NHS England’s digital assets in a timely manner.
• Scale access to innovation across the NHS through an NHS Supply Chain medical technology innovation dynamic purchasing system. Medical technology and associated innovative products will form phase 1 of the DPS workstream.
• Create sub-groups, that report back to the SME Advisory Group, on specialist areas where SMEs can work with NHS England directorates to showcase and promote innovation.
• Implement a value-based procurement methodology to ensure that “value” is considered alongside procurement activity, underpinned by a streamlined process to support SMEs in responding to tender opportunities.

We will maximise the small and medium enterprise opportunity arising from social value.

Suppliers bidding to work with the health sector are required to deliver on carbon reduction plans and social value requirements, as outlined in the NHS supplier roadmap. To support SMEs with these milestones, we will continue to:

• Engage trade bodies representing SME suppliers through regular sustainable supplier forums, to foster a productive dialogue between the NHS and SMEs.
• Work collaboratively across our categories and wider stakeholders, including DHSC and NHS Supply Chain to consider SME accessibility when identifying and defining requirements.
• Conduct regular webinars to support suppliers to meaningfully engage with net zero and social value requirements.
• Provide additional useful resources to support the implementation of social value and net zero requirements for SMEs.
• Hold regular supplier webinars to provide SMEs with relevant resources to support their evergreen assessments.

By 2026 or earlier we will:

• Increase SME understanding of carbon reduction requirements, modern slavery guidance and the social value model through specific SME workshops (advisory group priority action).
• Post procurement regulations, review and update the social value learning toolkit for those whose role in commercial involves dealing with contracts and suppliers.
• Explore the potential of supporting training providers to develop bespoke NHS sustainability and social value training.
• Develop the opportunity for targeted SME support on social value tendering.

2. Actions for small and medium enterprises

Small and medium enterprises (SMEs) are valued partners in the NHS. To maximise the ability of the NHS to work in partnership with the NHS, we encourage SMEs to:

• Seek and deploy collaborative approaches with other SMEs and larger businesses on common goals and challenges.
• Understand own capabilities and build robust, impactful case studies as evidence.
• Understand the NHS needs and challenges outlined in strategies and plans such as NHS Long Term Plan and the Strategic framework for NHS Commercial
• Utilise right to receive constructive feedback.
• Tell us what is working with our supplier engagement and how we can improve.
• Become familiar with procurement routes available within all supply chain tiers.
• Build relationships/networks to complement intelligence gathering and consider joining a relevant trade association. Support/attend relevant industry events.
• Register with NHS events portal for access to free-to-attend engagement events

3. Small and medium enterprises key facts

NHS England uses the UK government definition of small and medium enterprises (SMEs).

Supplier diversity is key to a healthy marketplace, creating opportunities for entrepreneurship, supporting economic growth and business creation. Small businesses make up 99.9% of UK private sector businesses.

SMEs employ 16.4 million employees compared to the 10.6 million employees within large organisations. 70% of UK small businesses intend to expand internationally for growth in 2023, however, sixty percent of UK small firms fail during the first three years of operation.

Working with SMEs is attractive and critical to UK growth and health as they are:

• Innovative – 45% of UK SMEs are innovation active and can respond quickly to changing market conditions. 
• Employment – In health, 29% of SMEs expect to employ more staff than pre-pandemic, driving career growth and opportunities.
• Customer Service – 43% of UK consumers state local firms offer better customer service than global companies and a further 37% were neutral.
• Local growth – SMEs are especially important to the local economies with employment contributing to some 70% of jobs outside of core regions.

Small businesses face several unique challenges including cash flow, skill and talent retention, their limited purchasing power and limited resources. SMEs are also more quickly and severely impacted by introduction of new policies and regulations.

The NHS understands the challenges and barriers faced by suppliers, especially smaller businesses, when contracting with the public sector. We are pleased to publish this SME action plan, that commits the NHS to finding new ways to reduce the barriers for SMEs when it comes to being part of our supply chain.

Contracting Authority obligations

The HM Government: The sourcing playbook places the following obligations onto contracting authorities. This document sets out NHS England’s commitments to the small and medium enterprise (SME) community and explains how we will reach them.

• Contracting authorities should publish commercial/procurement pipelines so that SMEs understand the demand across government and can prepare for opportunities in the future by investing in training and wider priorities specified in contracts.
• Social value should be seen as a key priority when selecting suppliers. This will ensure that small businesses are valued and will also help to diversify public sector supply chains.
• Early market engagement is important as it allows suppliers and contracting authorities to discuss opportunities, risks, and delivery challenges. Early market engagement gives suppliers time to prepare prior to the bidding exercise. Technical specifications should not be set in a way that favours another bidder to ensure a fair process for all suppliers, including SMEs.
• Contracting authorities should consider the use of specific frameworks to make it easier for SMEs to access public sector customers.
• As the cost of bidding is a barrier to entry for SMEs, procurement processes should not be made unnecessarily long or complicated. As SMEs do not always have the capacity or commercial capability to engage to the same extent and scale that larger suppliers can, contracting authorities must make adjustments for SMEs where they are required.
• As SMEs make a considerable contribution to the digital, data and technology industry, the Government sees levelling the playing field for SMEs as a key priority. The Government should use different cloud-based ways of working, as cloud-based working is frequently used by SMEs, thus providing SMEs with more opportunities to work with the Government.
• When preparing to go to market, using innovation focused contracting routes can help to attract SMEs.
• When assessing the economic and financial standing of bidders and suppliers, all bidders should be treated equally, regardless of their size. All bidders should be able to propose relevant mitigations where risks are identified arising from the organisation’s size/structure. 

4. Further Information

• Small and medium enterprise (SME) questionnaire (europa.eu)

This tool can be used to determine whether your organisation qualifies as an SME.

• Small and medium business hub – gov.uk

Centralised guidance for SMEs and departments on the Government’s commitment to support start-ups and small businesses via government procurement and commit to paying them on time.

• How to bid for government contracts as an SME effectively – gov.uk

Steps SMEs can take when bidding for government contracts.

• How to bid for government contracts as a consortium – gov.uk

How organisations can bid for contracts as a consortium, including the relevant requirements set out in the invitation to tender.

• How to raise concerns about public procurement practice

This provides a route for suppliers to raise concerns about public procurement practices.

Contact us

For queries or feedback relating to this Small and medium enterprise action plan, please email england.supplier@nhs.net

For queries relating to the work of the Cabinet Office Small Business team, please email smallbusinessteam@cabinetoffice.gov.uk

Publication reference: PRN01106