Small and Medium-sized Enterprises (SMEs) have the potential to revolutionise local authority services by introducing new ways of working, new technologies and solutions, and a flexible approach to services and solutions. During a challenging time for local services, and an ongoing pressure to achieve better for less, now is an opportune time for this potential to become a reality. The objective of this study is to gain a deeper understanding of how local authorities and SMEs are currently working together; what are the benefits of these collaborative relationships; what are some of the challenges and barriers to engagement; and to provide guidance on what can be done to improve the representation of SMEs in
local authority supply chains.
Over the past few years there has been an explosion in UK GovTech, an emerging business sector aimed at making the public sector more innovative, dynamic, and people-orientated. Tech Nation found that in 2018 “Tech for Social Good” companies were worth £2.3 billion, with a total turnover of £732 million – generating more than the UK’s manufacture of consumer electronics (£634 million) As the public sector, at all levels, has become increasingly digital, there has been significant growth and investment from specialists and large Venture Capital firms. For example, Bethnal Green Ventures and Public, respectively led by Daniel Korski, ex-deputy head of the No.10 policy unit and venture investor, Alexander de Carvalho.
This ongoing growth and its resultant influence on UK public service delivery is best exemplified by the GovTech Catalyst, funded using Innovate UK’s Small Business Research Initiative (SBRI). Started by UK Government in 2018, and now in its third iteration, the Catalyst programme’s £20 million fund pays suppliers to solve public sector problems through innovative digital technology. The GovTech Catalyst has already seen tangible value, even in its early stages. For example, Leeds City Council and smart home specialist HomeLINK have partnered on a large-scale trial of IoT devices for safety, maintenance and wellbeing in social housing.
However, there are also real challenges for SMEs who want to make an impact on the frontlines of Government delivery, local authorities. During the course of this study, over 100 organisations, including SMEs, local authorities, and ecosystem stakeholders across the country were surveyed to understand how local authorities and SMEs work together on service delivery and what opportunities exist for enhancement. Literature review was also carried out on existing approaches and programmes and interviews carried out with a wide range of stakeholders, in order to gain a deeper and more nuanced insight into their challenges, opportunities and experiences.