Win in the growing £47bn digital government market

Over the past three years, digital technology has taken centre stage in transforming the UK government. This scale and speed of change have reshaped how public services are delivered and how suppliers win work.

Between 2022 and 2025, Stotles’ analysis shows the UK public sector has invested over £47 billion in technology procurement across Central Government departments and Local Authorities.

There has been significant investment in four key areas since 2022:

• Cloud and software (£8.3 billion)
• Data, AI and automation (£19.4 billion)
• Digital services & IT modernisation (£17.4 billion)
• Cybersecurity and resilience (£1.6 billion)

These investments are setting the foundations for a modern, data-driven government, where digital solutions are now essential to delivering public services.

For suppliers, these shifts bring both complexity and fresh opportunities to lead innovation across the public sector. So whether you’re a salesperson, bids manager or strategist, this report will help you cut through the noise and give you the tools to make your next informed decision when it comes to public sector procurement.

At the end of this report, you will walk away with:

• An understanding of where tech procurement is heading in 2025 and beyond
• How Central Government and Local Authority procurement activity has changed since 2022
• The leading buyers across Central and Local Government and tech suppliers winning contracts 
• A breakdown of key tech categories and where the opportunities are

Our last collaboration with GovNet explored how the UK healthcare system invested in emerging technology and how policy and funding shaped procurement. You can read that report here.

‍

Digital government isn’t just about putting more services online. It’s about rethinking how the public sector operates, using technology to deliver better outcomes, streamline operations, and respond to a rapidly changing world.

The key growth years for tech: 2020 to 2025

Over the past five years, the UK’s digital government journey has undergone rapid acceleration. What began as a scramble to respond to an unprecedented crisis has evolved into a long-term, structural transformation.

2020–2021: The COVID-19 pandemic forced the public sector to rapidly digitise, turning digital solutions from nice-to-haves into critical infrastructure.

2021–2023: The focus shifted from emergency fixes to long-term digital transformation, with cybersecurity and core infrastructure taking centre stage.

2023: The Government Digital Service set a refreshed vision, driving unified, citizen-centric services through platforms like Gov.uk One Login.

2024: New government leadership accelerated investment in AI, cloud, and cross-government collaboration, doubling down on digital infrastructure.

2025: The Procurement Act 2023 reshaped public procurement with stricter transparency and flexible contracting, as major digital platforms reached key milestones.

The UK government is now moving beyond isolated pilots and short-term projects. Digital is no longer a bolt-on; it is becoming the backbone of public service delivery.

Tech procurement between 2022 and 2025 has not just built momentum. It’s laid permanent foundations that will shape procurement, technology adoption, and citizen services for the decade ahead.

Where public sector tech money flows

An analysis of 24,000 procurement notices from the past three financial years reveals consistent, large-scale investment in technology across the UK public sector. The total contract value exceeds £47 billion, a strong signal that digital transformation is no longer a side project but a priority.

Across Central and Local Government, public sector technology spending has steadily grown in recent years. While procurement volumes have fluctuated, total spending continues to climb, showing a clear sign of sustained, long-term demand

‍

The Central Government continues to control most tech procurement by value, but the volume of Local Government is increasing yearly. Local government contracts are typically smaller in size but more numerous.

This is creating more accessible routes into public sector procurement, particularly for small- to medium-sized enterprises (SMEs) seeking to enter the market.

‍

According to the Local Government Association (LGA), digital inclusion, smarter service delivery, and regional collaboration are key priorities for local authorities, with locally funded programmes and digital initiatives driving further opportunities.

SMEs have historically found more accessible entry points in Local Government than in Central Government departments. Local contracts tend to be smaller, less complex, and often supported by initiatives that encourage regional supplier engagement. This has helped SMEs build relationships and win work at the local level.

Across the dataset:

• SMEs won 16% of all awarded contracts between FY 2022 and FY 2025. However, they accounted for almost 20% of all local buyer awards.
• 11% of the total contract value was awarded to SMEs, with Central Government buyers tending to award contracts for more complex and higher-value contracts to larger enterprises. 

While SMEs secure work, most of these contracts are of lower value and often have shorter durations. The most significant opportunities, complex, multi-year contracts, remain concentrated among larger suppliers.

‍

Framework activity is steady

Over the past three years, spending through procurement frameworks has remained steady, with no signs of slowing. Framework call-offs have become routine across central and local government, driving a significant share of public sector tech investment.

In a recent survey we ran asking suppliers about their preferred route to market, 44% of sales leaders ranked frameworks and dynamic markets as their primary route to market.

For suppliers to both the Central Government and local authorities, frameworks are no longer a nice-to-have when building a robust strategy. Suppliers who aren’t listed on frameworks that their target buyers are procuring through risk being excluded from the majority of high-value opportunities. 

Reviewing three years of tech procurement, we found that 42% of Central and Local Government total contract value went through frameworks. Getting onto the right frameworks is now essential for long-term success in the public sector market.

‍

As with all routes to market, buyers have preferences. For frameworks, six stood out as the most important for tech suppliers selling to the Central Government and Local Authorities.

These six frameworks account for 22% of the total contract value and 30% of the volume. While G-Cloud leads the way by volume, Technology Services spent more on average, facilitating nearly £4 billion in tech procurement since 2022.

While these six frameworks saw a significant total spend come through it, only 5% of the total value came from Local Authorities.

‍

Getting onto the right frameworks is essential if you want to unlock repeatable, scalable work in the public sector. Without framework access, you risk missing out on a steady stream of high-value opportunities that rarely become available on the open market. 

Spotlight on Central Government

Local Government is growing, but the highest-value opportunities remain firmly in the hands of Central departments. In FY 2024, the central government controlled 90% of the total contract value.

Large contracts are concentrated in central departments, like the Ministry of Defence, the Home Office, and HMRC. These buyers are increasingly using large frameworks and whole-of-government agreements to consolidate their spending and drive efficiencies.

‍

Central Government may hold the most considerable contract values, but it’s also where supplier competition is fiercest and highly concentrated. A small group of established suppliers consistently win the lion’s share of tech procurement.

Leading suppliers like Capgemini, Accenture, and Bytes Software have built deep relationships with Central Government departments and often secure large, multi-year contracts. New entrants and smaller suppliers may face challenges breaking in, but niche capabilities, innovation, and strategic partnerships can open doors.

‍

Deep public sector experience, trusted security credentials, and capacity to mobilise and deliver at scale set these suppliers apart from the pack. For emerging suppliers, it’s hard to break in directly. 

Spotlight on Local Government

Moving away from the Central Government, local authorities are stepping up. They’re becoming major players in tech procurement, with some councils now driving significant digital investment and creating fresh opportunities for suppliers.

In particular, Derbyshire County Council, Bournemouth, Christchurch, and Poole Council, and Transport for London (TfL) are making significant strides in digital transformation, IT infrastructure, and service delivery.

‍

Unlike the Central Government, Local Government tech procurement is spread across a broader range of suppliers. It’s a more open and varied market, offering genuine opportunities for both specialists and generalists.

These buyers tend to favour a mix of niche specialists and volume-based generalist suppliers like Trapeze ITS, Insights Direct, and INIT Innovations. This fragmentation makes it easier for new and smaller suppliers to find their place if they can identify the right buyers and secure the corresponding contracts.

‍

Niche expertise, such as in transportation, education, and innovative infrastructure, can unlock large, high-value contracts at the local level for tech suppliers. Similarly, value-added resellers like Softcat, Phoenix, and Insight Direct consistently win smaller, repeat contracts, demonstrating that scalable delivery and broad framework coverage remain essential locally.

There are two winning routes in local government. The first is to go deep and build specialist expertise that solves specific council challenges. Secondly, expand your capabilities to deliver consistently across multiple councils. Both offer scalable, proven pathways into this competitive but accessible market.

We analysed 24,000 procurement notices using a mix of Common Procurement Vocabulary (CPV) codes and keyword tracking to uncover where public sector tech investment is going. The data revealed four standout categories shaping the market:

• Cloud & software: High contract volumes, fuelled by cloud migration and infrastructure upgrades.
• Data, AI & automation: The fastest-growing area, with the largest total contract value, especially in defence, security, and healthcare.
• Digital services & IT modernisation: Consistent investment in modernising legacy systems and building digital-first public services.
• Cybersecurity & resilience: A clear priority for central and local buyers, with growing spend on digital defences and critical infrastructure.

The chart below provides an illustration of how these break down across volume of notices and total contract value.

‍

While Cloud and software saw the highest volume of contracts, both data, AI and automation as well as digital services and IT modernisation saw significantly higher total contract values. Unsurprisingly, these larger contract sizes skew heavily towards the Central Government.

‍

The following section provides an overview of top buyers and suppliers across each of these categories and some examples of contracts that have been awarded over the past 3 years. 

For more insights, sign up for a free Stotles account and explore how to create your strategy and build pipeline across the public sector.

Significant contracts:

1. Data Visualisation Software Services
2. DWP Digital Channels Contact Centre (DC3)
3. DWP Hyperscale Public Cloud Procurement 2023 (OGVA2)

Significant contracts:

1. Cyber - Perimeter Security Service
2. Unified Network Access Service (UNAS)
3. ATMS Infrastructure Hosting

‍

Significant contracts:

1. Award of Digital Platforms Run (Platforms and Products)
2. Digital Platforms New Build Contract 4
3. Application Maintenance and Support (AMS) Services

‍

Significant contracts:

1. FoNT M2M Mobile Comms
2. Collaboration Licensing and Support
3. NHSmail Platform Support

Between 2022 and 2025, the UK government laid the foundations for a more modern, resilient, and data-driven public sector. Rapid cloud adoption, the national push for AI and automation, and the introduction of the Procurement Act 2023 have made digital transformation a strategic imperative, not a choice.

Your next moves

Create your public sector strategy:

• Prioritise the right buyers: Focus on departments and councils showing the strongest investment signals.
• Stay ahead of procurement reforms: Understand how the Procurement Act 2023 will shape your bids and delivery.
• Get framework-ready: Target upcoming renewals and make sure you meet key criteria for market access.

Start building pipeline:

• Track contract expiries: Stay on top of when deals are likely to return to market. Tools like Stotles can help.
• Follow the growth: AI, cybersecurity, cloud-native systems, and digital citizen services are where the money is flowing.
• Partner up: Build alliances with other suppliers and framework leaders to unlock bigger, more strategic deals.

Sign up for a free Stotles account to Create Strategy. Building Pipeline, Track Tenders, and Win Bids.

Success in public sector tech isn’t just about great solutions—it’s about meeting the right people. DigiGov Expo provides a platform for suppliers and decision-makers to connect, share priorities, and foster the partnerships that drive digital transformation.

Stay ahead with Stotles and GovNet

Stay ahead of public sector digital transformation with Stotles and GovNet. 

Be where public sector relationships grow - join DigiGov Expo 2025, explore live opportunities on the Stotles platform, and connect with our teams to turn these insights into action.