The UK Government’s Strategic Suppliers: What tech firms need to know
From paper clips to military hardware, contracting authorities spend hundreds of billions of pounds every year with private sector suppliers to deliver vital public services and implement policy.
A small handful of companies sit at the heart of this market - the UK Government’s ‘Strategic Suppliers’.
Tussell’s 8th annual Strategic Suppliers Report lifts the lid on £24.8 billion in public procurement spend with the government’s most important suppliers.
For technology companies looking to grow their public sector book of business, the report provides vital market context - from shifting spending patterns to emerging opportunities.
This blog unpacks five key insights from the report every tech firm should know.
A quick recap: who are the 39 Strategic Suppliers?
The UK Government’s Strategic Suppliers are a select group of companies designated by the Cabinet Office due to the critical goods and services they provide. Each has a dedicated Crown Representative, giving them a direct channel into government.
They include a diverse range of companies, including 13 that we’ve tagged under the ‘Technology’ sector: Accenture, Atos, AWS, Capita, Capgemini, Computacenter, CGI, DXC, IBM, Sopra Steria, Microsoft, Fujitsu and Oracle.
Strategic Suppliers typically generate over £100 million in annual public sector revenue, and their membership is regularly reviewed by the Cabinet Office.
Drawing on open data aggregate, cleansed and enhanced by Tussell, our annual report analyses exactly how much the UK public sector is spending with this small cohort of critical suppliers.
Here are the key findings from our latest report that all tech suppliers to government should know:
1. Strategic Suppliers are losing ground
The 39 Strategic Suppliers saw their collective share of direct UK public procurement spending fall to a five-year low of 10% in FY 2024/25, despite the overall market growing 2% year-on-year.
Technology Strategic Suppliers were no exception: their combined revenue fell by 2% over the past year, signalling the government’s push to diversify suppliers and break up large contracts. For telecoms Strategic Suppliers, revenue slumped by 12%, with the most successful telecoms suppliers expanding into the adjacent IT market to recapture growth.
2. The tech sector dominates central government - but not local authorities
Technology firms account for 43% of Central Government Strategic Supplier spend, yet only 9% of Local Government’s. Other regional bodies invest far more - the NHS directs 31% of its Strategic Supplier spend to tech, and Blue Light organisations allocate 40%.
Previous Tussell research has shown Local Government to be the slowest-growing technology vertical in the public sector. With councils under severe financial strain, the question remains: does Local Government's lack of technology spending risk long-term efficiency and security in favour of short-term cost-saving?
3. Frameworks are the gatekeepers in public sector tech
In FY24/25, over half (56%) of all Strategic Supplier contracts were awarded via framework agreements or Dynamic Purchasing Systems (DPS) - nearly three times the SME average.
For technology providers, mastering frameworks is no longer optional. Success depends on selecting the right ones, partnering strategically, and understanding which frameworks your target accounts are actually using. Firms that lack a data-based framework strategy risk being shut out before competitions even begin.
4. AI procurement is accelerating - but Strategic Suppliers aren’t leading it
AI-related contracts among Strategic Suppliers have risen steadily to 26 awards in FY24/25, led by Capgemini, IBM, KBR, Deloitte and EY. Yet, they represent less than 1% of all public-sector AI deals.
Tussell's Strategic Suppliers Report paints a picture of a fragmented AI ecosystem - one where specialist firms still have space to lead. For innovative tech suppliers, especially SMEs with niche capabilities in machine learning, data science, or automation, the government’s AI adoption drive represents a major growth opportunity.
5. £12.8 billion in Strategic Supplier contracts will expire in 2026
Tussell identifies £41.7 billion in live Strategic Supplier contracts due to expire this Parliament, including £12.8 billion in 2026 alone. These expiries create a major opening for challengers to anticipate renewals, form alliances and engage early.
The report also surfaces new signals of future buying intent across tech and telecoms - mined from government pipelines, board minutes and policy papers - helping suppliers to get ahead of the curve.
The bottom line
The 2025 report paints a market in transition: some legacy incumbents are losing share, frameworks are consolidating access, and AI-driven transformation is reshaping demand.
For technology firms, the lesson is clear: a data-driven approach to public sector sales wins. Focus on the right frameworks, track contract expiries, and act early in emerging or growing markets like AI and NHS transformation.
To access all of our findings, download Tussell's 8th UK Strategic Suppliers Report for free here.
