Supply Side
Analysis of Public Sector Procurement Reveals Growth in Tenders and Contract Awards

Tussell Ltd is a relatively new firm which mines data from official, but disparate, sources of UK public sector spending, and consolidates and analyses it to provide visibility into public sector supply chain spending.

Looking at a 2016 marketplace value of about £200 billion, it categories it by sectors and regions, by value and by volume, to give businesses and anyone interested in or wishing to do business with the public sector, a view of trends and opportunities in government buying. (Its data is continuously refreshed, so it can boast live data – while its historical data currently goes back only to 2015 for comparative purposes, that apparently is being extended.)

It has just released a special report highlighting award and tender details for 2016, which reveals some interesting and useful stats, which, according to The Times on Monday indicates a “Surge in public spending after Brexit vote,” saying “The vote to leave the European Union appears to have unshackled public spending, with data from government procurement revealing a sharp rise in the value of work put out to tender … In the last three months of last year nearly £100 billion worth of public sector tenders were advertised — in excess of 50 per cent more than went out to tender in the final quarter of 2015.” The full article requires registration.

Here are some key findings from the report – which you can view and download here:

  • Faster than expected growth in volume of tenders in H2 2016 — more than 17,000 officially published tenders worth a total of £301 billion.
  • Tender value has grown 35% year on year, driven mostly by construction activity (largest sector by volume and value with nearly 9000 supplier-level awards worth a total of £38 billion in 2016) and health services – rising by 96% and 81% respectively H2 2015 vs H2 2016.
  • And H2 2016 total value of tenders in Consulting Services and Legal Services more than trebled year on year. (Value and volume of tenders in Recruitment went down.)
  • While total value of contract awards increased slowly by only 5% year on year, the report caveats that awards are a “lagging indicator that should pick up as tenders convert into contracts.”
  • Local government purchasing declined by 17% year on year, while central government increased by 10%.  The NHS awarded a record-sized contract (£5 billion).
  • Disappointment as in H2 2016 total public sector award value in the “Northern Powerhouse” declined by 17% year on year, while London grew by 5%.
  • In H2 2016 total award value to SMEs was £18 billion, a rise of 29% year on year.
  • In 2016 the MoD was the biggest central government buyer by value of awards with £13 billion and by volume with over 700 awards.

Tussell has identified more than £5 billion worth of public sector contracts that are due to expire in 2017. By value the largest are in construction and health/social services, followed by IT. Might there be opportunities for change, or might many just be renewed?

The report 2016 Trends in UK Public Procurement goes into much greater depth, and is populated by detailed graphs.


First Voice

  1. Digby Barker says:

    It would be interesting to know how many/what percentage of the Contract Awards were publicised via Contract Award Notices; the Government’s Transparency Agenda requires this as do the Regulations where they apply.