House of Commons Library

Public procurement

Published Friday, July 3, 2015

One third of public sector spending is on procurement of goods and services. This briefing looks at the rules for public procurement, at government priorities and at how well public contracts are being managed and delivered.

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Procurement spending

In 2013/14, the UK public sector spent a total of £242 billion on procurement of goods and services; this accounted for 33% of public sector spending. 

Procurement priorities

At the heart of the priorities of the coalition government was a target for central government to procure 25% of goods and services by value from small and medium-sized enterprises, and it achieved this in 2013/14.  The 2015 Conservative manifesto included a pledge to increase the percentage spent with small and medium-sized enterprises to a third.

The coalition Government looked at ways to change and simplify the procurement process, including to encourage smaller companies to bid for public contracts.  Towards the end of the coalition government period, the emphasis of this work was extended from central government to the wider public sector. 

Pressure to make savings has also been a key part of procurement policy in recent years.  In 2013/14, the government reported savings of £5.4bn in procurement and commercial savings compared with 2009/10. 

Commons Briefing papers SN06029

Authors: Lorna Booth; Joe Farnell

Topics: Public administration, Public expenditure, Small businesses

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