Editorial

Covid-19’s effects start to be felt in public sector procurement

Tussell’s group’s latest analysis shows that last month, the public sector published 30% fewer opportunities than in February – and was, in fact, the lowest month since Contracts Finder fully came into force in 2016

Posted 6 April 2020 by Gary Flood


In February, the UK public sector published 30% fewer procurement opportunities than in February – making it the lowest month since Contracts Finder fully came into force in 2016.

Though probably not that surprising, the data – from public sector number crunch leaders Tussell – does starkly underline just how quickly the current Coronovirus Pandemic is having on the sector.

(c) Shutterstock

The Group states that its analysis is based on sifting spending data taken from the transparency reports published by over 150 Central and Local Government buyers. This is invoice level data, it claims, allowing detailed analysis of what the public sector is buying, from whom, and for how much.

And the numbers are stark: only 1,832 new ITTs (Invitations To Tender) were published in March, down 30% on February 2020 and 20% on March 2019.

Indeed, opportunities fell from between 27-32% across all buyer groups. Central Government saw the biggest drop in opportunities published last month, from 434 in February to fewer than 300 in March. Opportunities in Education & Training and Business & Financial services were down 40-50%, it adds, but does note that “the most modest dip in demand was in IT & Telecoms, down only 15%”.

Tussell attributes this decline in standard procurements has likely been balanced out by “an uptick in demand for the technologies that allow for flexible working”.

However, the analysis does offer a hopeful perspective:

“While this is a challenging time for everyone, public sector suppliers will likely fare better than most.

“The public sector will be more reliant on its suppliers at this time of need, while meeting that demand will be a critical source of income for thousands of companies at a time of severe disruption.”

The study also shows that in 2019, evidenced spending on private organisations by Central and Local Government was up 2% on the 2018 tally, to nearly £69bn.

Despite this slight increase in overall public sector spending, the 35 biggest suppliers’ share of revenue from the public sector decreased by £700m to £14.7bn – a 4.5% decrease on 2018, when they earned £15.4bn.

Please go here to get the full study (registration required).