Government procurement: The scale and nature of contracting in the UK

Government procurement: the scale and nature of contracting in the UK reveals that four departments – the Ministry of Justice (MoJ), the Department for Transport (DfT), the Department for International Trade (DIT) and the Department for Environment, Food and Rural Affairs (Defra) spent more than half of their entire budgets with external suppliers last year.

Across government, the money is spent on a wide range of things from goods such as stationery and medicine to the construction of schools and roads, and from back office functions such as IT and human resources to frontline services such as probation and social care.

The report finds that the largest suppliers are winning more and more government business. Last year, roughly a fifth of all central government procurement spending was spent with ‘strategic suppliers’ – companies that receive over £100m in revenue a year from government – up from around an eighth in 2013. This is risky for government, given that its top three suppliers have all experienced financial difficulties in recent years.  

Despite the scale of spending on procurement and outsourcing – and increasing financial problems in parts of the sector – the data available on procurement and outsourcing is poor. Every day, public bodies procure hundreds of millions of pounds’ worth of goods, works and services. With a clearer picture of how much is spent, on what and with which suppliers, government could make better-informed spending decisions and make significant savings.