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Just 15.4% of UK government tech spending reaches British firms
An IPPR report found that only 15.4% of the UK government’s spending with its 150 largest technology suppliers ultimately reaches British firms. The findings highlight Whitehall’s reliance on overseas technology and raise concerns about competition, supplier choice and the UK’s access to advanced AI.
UK-headquartered suppliers appear to receive 42.5% of this spending, but researchers say much of it flows abroad through overseas ownership, staff or resale of foreign products. The US receives £9.2 billion of the £19.2 billion spent with the largest suppliers; 150 firms take 83% of the total, while 89.9% of recent IT contracts lack published bid-count records. The report recommends joint purchasing, easier supplier switching and co-operation with other countries.
In short
- Just 15.4% of major government tech spending reaches British firms.
- US companies receive £9.2 billion through the largest suppliers.
- IPPR calls for stronger bargaining power and easier supplier switching.
Steelman: both sides, in good faith
The strongest fair case each way — we don't pick a winner.
The case for
The findings support the case for strengthening domestic technology capacity: greater spending that stays with British firms could build skills, retain economic value and improve the government’s ability to shape systems such as AI. Heavy reliance on a small number of overseas suppliers may also limit competition and leave public services exposed to lock-in or disruption, so joint purchasing, easier switching and clearer tender records could improve resilience and value for money.
The case against
The figures alone do not show that buying more from British firms would deliver better or safer technology, or better value for taxpayers. International suppliers can offer advanced products, scale and competition that domestic firms may not yet match; restricting procurement by national origin could raise costs, narrow choice and weaken access to innovation. The priority, on this view, should be open competition, transparent contracting and the ability to switch suppliers, regardless of where firms are based.
Explained simply
The UK government buys technology from a range of large suppliers, including companies based in Britain and overseas. A firm’s headquarters do not show where all the money goes: it may have foreign owners, employ staff abroad or resell products made elsewhere.
The concentration of spending among a small group of suppliers matters because it can affect the government’s choice of technology and how easily it can change providers. The report also points to limited public information about how many firms bid for recent IT contracts, making competition harder to assess.
Read the full article at the source →
Originally published by The Register as “UK’s ‘buy British’ tech ambitions hit reality as less than £1 in £6 stays at home”.