Small and medium sized (SME) businesses, typically those with fewer than 250 staff, are an important cohort within the UK economic landscape, accounting for 99% of all businesses. They drive innovation, create jobs and are often the beating heart of local communities, yet regularly face challenges when it comes accessing finance, navigating regulation, and competing in ever changing markets.
Many architecture practices fall into the category of SME businesses, and it’s SMEs that the government is seeking to help grow with the launch of its Backing Your Business guide.
We’ve picked out five of the most relevant proposals for architects put forward by the guide - mostly located in the 'Fixing the fundamentals' section - but we also encourage members to read the guide for themselves to see which proposals might affect them the most. For this professional feature, we asked Paul Wilson, Policy Director at the Federation of Small Businesses, to add a little bit more context and explain the potential benefits of each highlighted proposal.
1. Tackling late payment practice
- Policing large businesses: the Small Business Commissioner will be given powers to issue fines against the biggest firms, which persistently pay their suppliers late. The commissioner will also be able to carry out spot checks and enforce a 30 day invoice verification period to speed up resolutions to disputes. Current proposals will require audit committees to scrutinise payment practices at board level, placing greater pressure on large firms to show that they are treating small suppliers fairly.
- Mandatory interest on late payments: forthcoming legislation will make the payment of interest on late payments mandatory. This means removing the burden on small businesses to ask for interest payments and removing the ability of clients to negotiate compensation rates lower than the statutory rate.
- Construction contracts: the government has pledged to reduce poor practices around the use of retention clauses in construction contracts, by either prohibiting the use of retentions or by introducing requirements to protect retention funds. There will be a more general deadline for disputing invoices, so that businesses that wish to raise a dispute must do so within 30 days of receiving an invoice.
- Public sector supply chains: the Procurement Act 2023 ensures that 30 day payment terms are included in every contract and subcontract within public supply chains. Suppliers can claim interest for late payment at the Bank of England Base Rate plus 8% if paid late, regardless of whether the contractor included 30 day terms in the contract. From October 2025, the government will implement a programme of spot checks to ensure that good payment terms are passed down public sector supply chains.
Paul Wilson: “Late payments by bigger businesses to their smaller suppliers can derail growth, hamper cashflow and put small businesses in real danger of closing. Our research found that 65% of all small businesses have had to deal with late payments in the second quarter of this year, rising to more than three quarters (76%) for small construction businesses. For architectural small firms that may struggle with cash flow and long-term financial planning, particularly when projects are delayed or cancelled, late payments can be debilitating. Legislating to tackle it is exactly what’s needed to combat this scourge once and for all.”
“The hard work now starts to make sure these proposals are legislated and delivered as soon as possible in this parliament and that businesses across the UK are prepared for the changes ahead.”
2. More resources for planning and streamlining plans
The government references the Planning and Infrastructure Bill in its small business plan and hopes that the reforms will boost the economy by up to £7.5 billion over the next decade.
The government says that small businesses in the construction sector will be helped by streamlined planning rules for smaller sites and fast-tracking high-quality developments on brownfield land.
Some of the plan’s more technical proposals are already in the pipeline. In May, the government published a working paper on reforming site thresholds, aimed at streamlining planning requirements for small and medium sites. Last year saw the publication of a brownfield passport policy paper, outlining proposals to make the default answer “yes” to applications for previously developed sites if they meet design and quality standards. And the government is currently considering its consultation response to plans that prioritise and fast-track building on previously-developed land, particularly in accessible locations such as around train stations.
Funding is also being provided to meet a commitment to recruit 300 new planning officers.
In addition to these measures, the hospitality and entertainment sectors are promised a new National Licensing Policy Framework that will cut red tape and fast-track permissions for night-time economy venues and al fresco dining.
Paul Wilson: “It’s good to see the government recognising the vital role of small housebuilders, which have the potential to deliver up to a third of the 1.5 million new homes target. For these reforms to succeed, they must be accompanied by a wider package of support that tackles the specific barriers facing small developers, enabling them to compete and build at scale.”
“The commitment to fast-track high-quality developments on brownfield and smaller sites is a particularly positive step and something we have long campaigned for. Providing funding for 300 new planning officers is a welcome move to help speed up the planning process, which can be arduous and slow.”
Read RIBA’s response to the Planning and Infrastructure Bill
3. More support for exports efforts for SMEs
The focus of the government’s export support for SMEs will be a new Business Growth Service, which will bring together export support measures and advice within a single service to make it easier for small businesses to navigate. Architects can also watch for a forthcoming programme of export roadshows.
The government has also set a target of helping an additional 1,000 SMEs to access export finance by 2029. The lending capacity of UK Export Finance (UKEF) is being increased to £80billion, which will include funding for a new Export Insurance Product (EXIP).
At the local level, practices can expect to see active engagement later this year with Mayoral Strategic Authorities (in Greater Manchester, West Yorkshire, and West Midlands) on a joined-up approach to export support services and Trade Missions.
And last month (July 2025), the UK rejoins the Enterprise Europe Network (EEN) as an international partner through Innovate UK, as part of its resetting of the relationship with the EU. The EEN is the world’s largest support network for SMEs looking for export opportunities, supporting them through trade missions, identifying international business partners and running dedicated training.
Paul Wilson: “Exporting is a key growth route for small firms, but for most exporters, it’s still a small part of their turnover, with 78% saying it accounts for less than half of their sales.”
“To allow more to reap the benefits of exporting, it is positive that export support will be integrated into the Business Growth Service. Trade must be a priority for all government departments and support must reflect the realities small firms face."
4. Enhancing net zero opportunities
Architects can expect to see a multi-strand programme of initiatives aimed at decarbonising small and medium-sized businesses, some of which will translate into workflow. Much of the agenda is being driven by the Willow Review, an independent government-backed review looking at how sustainability can deliver financial benefits for small businesses. The plan says many of its recommendations align with its own ambitions – a detailed response to the review will be published in the autumn.
It will also support SMEs to access skilled staff to make the most of new opportunities in the retrofit and energy efficiency sectors. It will train up to 18,000 skilled workers to install heat pumps, fit solar panels, install insulation, and work on heat networks through the extension of the Heat Training Grant and launch of the Warm Homes Skills Programme.
This transition to net zero also creates significant opportunities, including the potential to win contracts and enter supply chains where procuring organisations are requesting emissions data, and to meet the growing demand from smaller businesses for guidance on adapting to climate change.
Paul Wilson: “The extension of the Heat Training Grant and the launch of the Warm Homes Skills Programme will bring benefits to the construction sector, and to the overall small business community. Supporting 18,000 people gain skills so they can install heat pumps, solar panels, and insulation, and be trained to work on heat networks, will greatly increase capacity in areas which will be even more crucial in the future.
5. Opening up procurement to SMEs
The government has declared SMEs a national procurement priority through the Procurement Act and a new National Procurement Policy Statement issued earlier this year. The Act introduced a duty on public sector clients to consider the needs of SMEs when designing their procurement processes. This includes addressing potential barriers such as contract structure, onerous financial obligations and the lack of feedback reported by small businesses wanting to participate in public contracts.
The plan points to new procurement guides already published by the Cabinet Office explaining the new procurement regime. An SME Procurement Education programme is promised to equip SMEs with the knowledge and tools needed to navigate the new procurement landscape.
The Government is in the middle of a consultation - Public Procurement: Growing British industry, jobs and skills - on further procurement process reform that would bring an SME-focused mindset to the wider public sector, which RIBA will be providing its own response to.
Larger contracting authorities, such as NHS Trusts and local authorities, are required to publish three-year targets for their SME and social enterprise spend, and to report annually on their progress.
Paul Wilson: “We have long called for small businesses to be prioritised within public procurement. Opening up opportunities to small firms helps them grow and remain resilient, and means more competition, better value for money, and supports local economies across the UK.
“While this renewed focus is welcome, for it to translate into real change, it must be backed by ambitious and detailed action. Government targets must be accompanied by a clear, three-year plan for how each department will open up more opportunities for SMEs to thrive in their supply chains.
“The SME Procurement Education programme is a positive step, but it must address the core reasons why so many small firms are excluded from the process altogether or are put off after their first experience.”
Thanks to Paul Wilson, Federation of Small Businesses.
Text by Neal Morris and Paul Hirons. This is a Professional Feature edited by RIBA Practice team. Send us your feedback and ideas.
RIBA Core Curriculum topic: Business, clients, and services.
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