How CCS is supporting SME involvement in public sector AI procurement

Earlier this year, the Government announced its decision to take forward all recommendations set out in the independent report ‘AI Opportunities Action Plan’, commissioned by Peter Kyle MP, Secretary of State at the Department for Science, Innovation and Technology (DSIT).

The purpose of the plan is to ‘ramp up’ Artificial Intelligence (AI) adoption across the UK in order to boost economic growth, provide jobs for the future and improve people’s everyday lives. The recommendations, it is hoped, will encourage the responsible adoption of AI across all sectors of the UK economy, with the public sector leading the way. 

Benefits of AI for the public sector

The use of AI within the public sector offers significant benefits through cutting administrative costs, speeding up processes and achieving more efficient services for citizens. The government has already identified the potential for large-scale productivity gains from the adoption of AI across the sector. It has already launched a new package of AI tools – nicknamed ‘Humphrey’ – available to civil servants in an effort to modernise tech and achieve better public services.

AI is already transforming public services by automating repetitive tasks and increasing efficiency across sectors. For example, in education AI helps teachers reduce time spent on lesson planning and marking. Healthcare professionals benefit from AI-assisted report drafting and medical diagnostics, with the Department for Health and Social Care specifically deploying AI for faster lung cancer detection through chest X-rays and CT scans. Police forces are responsibly implementing automated threat and anomaly detection systems. These AI applications are significantly reducing workload for public sector employees while improving service provision across education, healthcare, and law enforcement.

Despite the clear benefits however, there are many challenges to implementing AI solutions effectively across the public sector. These include concerns about data privacy and security, limited technical expertise, budget limitations, and a general hesitation to embrace new technologies that could potentially raise ethical issues, especially when dealing with sensitive citizen data. 

Why SMEs are critical in AI adoption within the public sector 

SMEs make up an essential component of the private sector business landscape. According to the 2022 Business Population Estimates there were almost 5.5 million businesses in the UK at the start of 2022. SMEs accounted for 99.9% of the total number. Importantly SMEs employed 61% of the private sector workforce which was 16.4 million employees. They also earned 51% of the turnover in the UK private sector. Put simply, SMEs are the backbone of any healthy economy: they drive growth, provide employment opportunities and open new markets.

SMEs are critical in AI adoption within the public sector.  Whether acting as a bridge between large-scale AI development and the specific needs of local communities or offering niche and specialist services to Government departments, their role is crucial. They can often provide tailored solutions and have specialist skills or products that are more cost-effective, agile and responsive to diverse government departmental and public sector challenges. 

SMEs can offer several advantages when providing AI solutions for the public sector, depending on the specific SME and their understanding of AI ethics and implementation practices. For example, they can often provide a more personalised level of customer support, crucial for public sector organisations with limited technical expertise and for building trust and understanding. SMEs are often considered to be better at innovation than larger corporations due to their agility, faster decision-making processes, and a greater willingness to take risks, allowing them to quickly adapt to changing public sector requirements, which is ideal for tighter timescales.

Other advantages can include:

• having specialised expertise and knowledge that enables development of targeted applications in areas like healthcare and education
• ability to provide more cost-effective solutions and take on smaller projects, because of their leaner structures and lower overhead costs
• willingness to more actively engage with and contribute to the local community around them, matching local needs and achieving social value benefits
• their business model typically involves managing smaller data sets, potentially reducing privacy concerns compared to larger companies

Barriers to public sector procurement for SMEs 

Despite the many benefits SMEs offer to public sector contractors, historically SMEs have faced a range of barriers in accessing public sector procurement opportunities. 

These barriers include but are not limited to: 

• contracting authorities being unaware of SMEs and the types of goods and services they can potentially provide
• SMEs viewing the procurement process, often rightly, as overly bureaucratic
• SMEs not having the capacity or resource to bid for opportunities and compete with large businesses, for example no dedicated bid teams
• the procurement process often assigning a higher weighting to cost, therefore lessening the ability of SMEs to demonstrate their wider value

As part of the recent change to procurement regulation following the Procurement Act 2023, contracting authorities now have a duty to consider the barriers facing SMEs and how to mitigate and remove these, wherever possible, with the aim of opening up procurement to SMEs and social enterprises.

How CCS is supporting SME involvement in public sector AI procurement

SMEs have always been a key component of the commercial agreements we create. This has been driven in part by the Government’s aspirations to increase spending with SMEs. CCS also recognises that SMEs bring greater diversity to supply chains and, more broadly, the economy, when successful in winning business.

One of the ways we aim to support SMEs is through our Dynamic Purchasing Systems (DPSs), which offer the ability for suppliers to self-certify making joining quick and simple at any point through the life of the DPS and reducing procurement times. For example, a simple procurement can be initiated in just 10 days, significantly shorter than more traditional procurements which can often take months. In addition, there is no limit to the number of suppliers that can join the DPS as long as they meet the selection criteria and accept the terms and conditions of the DPS, offering buyers unrestricted access to smaller suppliers. All DPS tenders are competitive and each appropriate supplier has a chance of winning.

AI solutions for the UK public sector

Specifically, our AI DPS offers all public sector organisations, including local authorities, the health sector, Bluelight, Culture Sport & Travel and charities a range of commercial solutions provided by suppliers of all sizes to support with realising the opportunities and reducing the risks presented by data analytics & AI. 

All suppliers on the agreement need to identify ethical considerations in relation to data limitations, fairness and bias. They need to demonstrate how the skills, qualifications and diversity of teams developing and deploying AI have been considered, and ensure the outputs of the AI technology are transparent and explainable to a non-expert audience. They also need to be able to describe how data will be protected and set out the level of human decision-making at critical points.

The DPS includes a set of capability filters which have recently been updated to connect buyers and suppliers together easily and to make it easier for customers to find the right solution to ensure better efficiencies in their organisations. Having additional filters allows SMEs to specify their capabilities more closely and buyers to filter the supplier list view with additional ease, to make it easier for them to find the right supplier. This saves time and creates value throughout the Public Sector. CCS experts are readily available to ensure the experience of using the AI DPS is as easy and smooth as possible.

SME spend through the AI DPS equates to over 50% of total spend through the DPS and is growing year on year.

Book your place on our AI and SME Opportunities in the Public Sector – (Virtual) Event

CCS is committed to supporting SMEs in accessing public sector AI procurement opportunities. To help businesses navigate the landscape, we are hosting a series of 3 webinars designed to provide insights, guidance and practical steps for SMEs looking to engage with public sector AI projects.

The sessions will cover key topics such as the role of SMEs in public sector procurement, an introduction to the AI Dynamic Purchasing System (DPS), the Government’s AI Strategy, and success stories from SMEs already working in the sector. These webinars will provide valuable information on how to register on the AI DPS and bid to be awarded a place on a future framework. There will also be the opportunity for attendees to ask questions and share insights into the challenges they face.

These webinars will take place on the following dates:

• March 19th – 11:00 – 12:30
• April 22nd – 14:00 – 15:30
• May 21st – 13:00 – 14:30

All sessions will be held virtually, SMEs can register their interest and sign up on GoToWebinar

Find out more 

The new AI Playbook for Government, supported and co-authored by CCS, offers guidance on using AI safely, effectively and securely for civil servants and people working in government organisations.

For more information download our guide to Artificial Intelligence (AI) for buyers.