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Public sector spends £16.6bn directly with tech suppliers every year

Government and public sector bodies spent big on technology last year, but the majority of the money went to large IT suppliers, with 84% of the total spend going to so-called ‘tech titans’, according to a report from Tussell

Lis Evenstad
By
Published: 26 Jun 2025 12:45

Government and public sector bodies spent £16.6bn on technology in the 2023/24 financial year, according to Tussell’s annual Tech titans report.

This forms part of a broader trend of increasing public sector IT expenditure, which has grown at a compound annual rate of 8% over the past four years.

Notably, 84% of the total spend went to large IT suppliers, often referred to as “tech titans”, highlighting a continued concentration of government contracts among a few major players in the technology sector.

While this figure is high, the amount spent with large UK-based suppliers, which make up over half of the 150 tech titans, has reduced in the past four years from 45% to 42%. This is despite a focus from government on buying British.

The list of the 150 tech giants include household names such as Capita, Atos and Capgemini, with the latter two topping the list with 80% central government revenue.

Other large suppliers raking in government money over the 2023/24 financial year include Leidos, Motorola, IBM, Fujitsu, Softcat, BT and Bytes.

Unsurprisingly, it is central government that is the biggest spender, with a direct procurement spend of £8bn, while the NHS spent £4.2bn on large tech suppliers and local government spent £1.9bn.

Read more about government and tech procurement

  • The National Digital Exchange will be a one-stop shop for public sector tech buying, allowing organisations to rate and review products and gain access to pre-approved tech deals.
  • The National Audit Office has highlighted a series of shortcomings in the government’s approach to digital procurement.
  • We look at the current tariff turmoil in public sector IT procurement, the particular challenges faced by public sector procurement, and how the cloud and pay-as-you-go can help.

Most of the money is spent with IT services, but IT resellers are fast growing in revenue, with a growth rate of 77% since 2019, encompassing £3.7bn of the total spend.

The NHS spends the most with resellers Bytes and Softcat, accounting for 38% and 51% of their public sector revenue, respectively.

In central government, the Ministry of Defence is the highest spender, with HM Revenue & Customs (HMRC) in second place.

Most of the public sector spending took place via framework agreements, with 56% of contracts being awarded via frameworks or dynamic purchasing systems between 2019 and 2024.

There are currently 395 live public sector technology frameworks as of June 2025, according to Tussell.

Expiring contracts

The report also found that during the course of this Parliament, £28.2bn in contracts is due to expire, giving suppliers the opportunity to challenge the status quo in the market.

The government is currently developing a sourcing strategy for departments to ensure it has a more strategic approach to digital procurement.

It is also building a digital platform for public sector technology buying. Dubbed the National Digital Exchange, the platform will give public sector organisations access to pre-approved technology deals at nationally negotiated prices.

It will also allow public sector technology buyers to rate and review products, which others can view ahead of buying their own, and will include an artificial intelligence-powered engine, matching buyers with suppliers based on what they need.

The platform aims to open up a public sector technology market where systems integrators have become the dominant service providers, acting as resellers for major platforms to ensure more suppliers have a fair chance.

The government wants to open the market to more UK tech firms, setting a target to boost small business involvement in government contracts by 40% in three years.

Read more on IT for government and public sector