Guest blog: The key stats behind the local government tech market
Local government has consistently proven one of country’s largest tech customers: since 2016, local bodies in England spent an average of £1.85 billion every year with technology suppliers.
Taking a quantitative look at this market informs suppliers where opportunities for growth may lie, and provides public authorities an assessment of the procurement ecosystem’s state.
Harnessing data from our market intelligence platform, we’ve picked out a number of key observations into the English local government tech marketplace, spanning Q1 2016 to Q4 2021.
Local government spends £1.85bn each year on tech
Since 2016, local bodies have consistently spent over £1.7 billion per year on tech. This spend topped £2.0 billion in 2020, before falling marginally to £1.9 billion in 2021. These figures are testament to the continued strength of the tech market at the local level.
Over 1/3rd of tech spend came from bodies in London & the South East
From Q1 2020 to Q4 2021, local authorities in London and the South East spent approximately £1.4 billion with tech suppliers, representing 35% of the £3.9 billion spent across the whole of England. Meanwhile, authorities in the North East saw the lowest spend on tech, at £195 million.
This is an indicator of the disparity in tech opportunities across England’s regions.
North East and West Midlands-based suppliers do most business locally
Below is a breakdown of where tech suppliers in different English regions received public income from. Suppliers in the West Midlands, for example, received 53% of their public income from authorities also based in the West Midlands; East of England-based suppliers, by contrast, earned just 13% of their income from authorities in the East of England also.
This analysis is useful for understanding which local authorities could make a more concerted effort to procure technology from locally-based suppliers.
Technology Products & Services is the most valuable framework
Since 2016, local government bodies have called-off at least £192 million worth of tech-related contract awards via the TePAS framework agreement. This award value spanned 260 individual contracts, but just 30 suppliers.
In the same period, the G-Cloud series yielded £82 million worth of call-off contracts across 362 call-offs, and a much larger pool of 190 different suppliers.
You can see the full ranking below.
You can learn more on identifying the right frameworks for your organisation by consulting our how-to guide.
The average value of local government tech contract awards dropped considerably in 2021
As the graph below shows, the average value of tech contracts awarded by local bodies fell by more than half between 2020 and 2021, from £426,000 to £222,000.
This may be due to the concurrent spike in the total volume of such contract awards, reaching 2,270 in 2021 – a 58% increase on 2020’s total.
This analysis clearly shows a surge in demand amongst local bodies for technology-related goods and services, and a growing number of opportunities for tech suppliers (at an increasingly accessible price point for smaller players).
By using hard data, we can begin to piece together the complex topography of how technology is procured at the local level. With this picture, we can more readily see where opportunities are being created, via which avenues, and by whom.
The above data was in-part used in a presentation with techUK on Tech Procurement in Local Government in December 2021; to access the presentation, click here.
James Piggott, Marketing Executive at Tussell
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