Government to create digital sourcing strategy

Government will develop a sourcing strategy for departments over the summer, following calls from the National Audit Office (NAO) to have a more strategic approach to digital procurement.

While being questioned by the committee on their relationship with digital suppliers, following an NAO report on the topic, Whitehall officials told the Public Accounts Committee (PAC) it would create the strategy.

Government chief technology officer David Knott, who was less than a week into the new role, said the report was right to call out government on now having defined a “cohesive sourcing strategy”.

“Sourcing in digital at the moment is probably more complicated than it used to be. It used to be an old buy-versus-build choice, and now it is much more buy, build, partner, procure, innovate and so on,” he said.

Since the Labour government came into power, government has undergone a digital reshuffle, having decreed that the Department for Science, Innovation and Technology should assume responsibility for running the Government Digital Service (GDS) and the CDDO since coming to power in July 2024.

 In January 2025, it was announced that government would set up a Digital Commercial Centre of Excellence to overhaul management of the £23bn annual government spend on technology.

Its remit will extend into local authorities by enabling councils to negotiate contracts jointly to save money, for example, as well as opening up more opportunities for tech startups and scaleups to win contracts from government.

“One of our priorities for the Digital Commercial Centre of Excellence is to jointly produce a really clear digital sourcing strategy that will have multiple parts. The first part will be really clear steers to departments on when it makes sense to build things ourselves and when it makes sense to buy from the market,” Knott said.

The sourcing strategy, which will be developed over the course of summer 2025, will also be partly driven by the upcoming Spending Review and what is being prioritised in terms of delivery.

The PAC also questioned the government officials on the fact that government lacks basic data on how much is being spent on technology contracts, as committee member Chris Kane,called out the officials for not doing enough to ensure sufficient data is available.

Government chief commercial officer Andrew Forzani said that while procurement data on the top 39 suppliers is generally good, as the contracts are managed centrally, it is not as good when it comes to mid-tier and small and medium-sized enterprises (SMEs).

Civil service chief operating officer and Cabinet Office permanent secretary Cat Little added that she accepted the point made by Kane and promised to work out what else could be done.

“One thing that we are doing through the spending review this time round is a bottom-up zero-based review of government expenditure. Our colleagues in DSIT are working with the Treasury to look at all technology and digital expenditure to understand what it is being spent on.

She added that it is a “shame that we have to do this as a quite manually driven exercise as part of a Spending Review”.

“One thing that we are working with the Treasury on is what more we can do to automate and gather that information on a more frequent basis after the Spending Review, so that we can monitor it and then align it to the procurement data that we are now capturing. There is something there that we should take away and build out a more detailed data plan on.”

On 24 February, the government launched a central digital platform, as part of the recent Pricrement Act, where procurements will be uploaded, increasing transparency.