A Step Change Still Required in Government Technology Procurement

A Step Change Still Required in Government Technology Procurement

As recently reported, GDS (Government Digital Service) is taking part in an OECD initiative to reform Government technology procurement, making it more “open, flexible, transparent and agile”.

Working with peers in other countries, a playbook is being developed aimed at “reshaping government technology procurement to create a vibrant, diverse economy of digital and technology suppliers”, including SMEs.

Walking the Walk
The need for a step change in public procurement to support SMEs is highlighted in the latest update on Digital Marketplace spending from the Cabinet Office, the first since January of this year.

Since 2012, cumulative public sector spending through the Cabinet Office’s Digital Marketplace has reached £2.6bn. Forty-six per cent of this (£1.2bn) has been with SMEs.

While progress has been made in diversifying the supply base, the proportion of sales going to SMEs fell significantly during 2017, with the current 46 per cent representing a significant reduction on the 56 per cent of G-Cloud spending, and 54 per cent of Digital Services sales, going to SMEs at the end of 2016.

Large suppliers continue to account for the majority of spend through G-Cloud. Since inception 53 per cent of the £2.4bn spent through G-Cloud has gone to large suppliers, a significant increase on the 44 per cent spent with large suppliers recorded in the January 2017 data.

Based on the most recent data, there are obvious concerns being expressed that larger suppliers will continue to account for the lion’s share of spend through G-Cloud, despite it being marketed as an SME-friendly framework. According to the National Audit Office, 94 per cent of government spend on digital and technology still goes to large IT suppliers.

Despite the progress being made in this area, it would appear that a lot more still needs to be done before we are ‘walking-the-walk’, not just ‘talking-the-talk, in helping SMEs to win public sector business.

As argued in a previous blog post, building a strong base of SME IT suppliers, often working in partnership with systems integrators, is critical to delivering the public sector digital transformation agenda.

Technology SMEs are also a major driver of economic growth and employment critical to the future competitiveness of the UK economy, especially in a post-Brexit era.

Becoming a world class digital nation requires world class digital companies. The public sector could do more to directly support and engage with the greater agility, delivery certainty and better value provided by SME’s.

As always, feedback and comment very welcome.

Further reading:

GDS: ‘We need a step change in public procurement’

Digital Marketplace Sales

Government Digital Marketplace spend with SMEs exceeds £1bn but declines in 2017