Welsh Lib Dems Urge Government to Put Small and Local Firms First in Public Contracts

Welsh Liberal Democrat Leader Jane Dodds has today challenged the next Welsh Government to do more to support small businesses, after new figures revealed that less than half of public procurement spending goes to small and medium-sized enterprises (SMEs), despite SMEs making up over 99% of all businesses in Wales.

Figures uncovered by Jane Dodds through a Written Question to the Welsh Government show that while £777 million was spent through public (Welsh Government) procurement in 2023/24, only £260 million of that went to SMEs. By contrast, more than £319 million was spent with large firms, and almost £198 million went to public sector or unidentified suppliers.

The Welsh Liberal Democrats have pledged to put small and medium-sized Welsh businesses at the front of Government procurement contracts should they be in a position to influence the next Welsh Government. 

The data also reveals a worrying fall in the proportion of spending that stays in Wales, dropping from 51% in 2023/24 to just 45% in 2024/25, meaning more public money is flowing out of Wales to suppliers based elsewhere.

Across the past five years, the proportion of Welsh Government spending going to SMEs has remained stubbornly below 40%, even though small and medium-sized firms dominate the Welsh economy and are major employers in every part of the country.

Commenting, Welsh Liberal Democrat Leader Jane Dodds said:

“These figures show that small and medium-sized businesses are the backbone of our economy, yet they are being short-changed when it comes to government contracts.

“At a time when local businesses are struggling with rising costs, energy prices, and red tape, the Welsh Government should be doing far more to ensure that public money supports jobs and growth here in Wales.

“It’s deeply concerning to see the proportion of spending that stays in Wales fall so sharply this year. The Government talks about supporting Welsh businesses, but the figures tell a different story.

“Small firms tell me they feel locked out of procurement opportunities and weighed down by bureaucracy. There’s huge potential for the Welsh Government to use its spending power to drive local prosperity, but too much of it still goes to large companies outside Wales.

“If we want a thriving Welsh economy that rewards hard work, innovation, and community roots, we must put small businesses at the heart of government policy. The Welsh Liberal Democrats would make it easier for SMEs to compete, reform business rates, and create a fairer, simpler procurement system that works for local enterprises.”

ENDS

NOTES FOR EDITORS:

Tables below, full written answer can be accessed here

Key Figures (Welsh Government data, WQ97241):