UK public sector spend on cloud and digital services in past five years hit £2.6bn, says government

The Digital Marketplace is platform through which public bodies in the UK can procure cloud and digital services. It supports purchases through a number of framework contract arrangements, including the G-Cloud framework, of which there have been several iterations, and the Digital Outcomes and Specialists framework.

The Cabinet Office, together with the Crown Commercial Service and Government Digital Service, said £1.2bn of the money spent via the Digital Marketplace since 2012 had been with SME technology suppliers.

"Almost half of digital spend, or £1.39 in every £3, is going to small and medium sized enterprises - giving a major boost to the technology SME sector," the government said in a statement.

Bridget Fleetwood, technology sourcing expert at Pinsent Masons, the law firm behind Out-Law.com, said: "This trend is very much consistent with the disaggregation of IT contracts that we’re seeing across the board – smaller contracts, more commoditised, mean the market is now much more accessible to SMEs and cloud providers than it used to be."

Last March, the head of the civil service, John Manzoni, told a parliamentary committee that the government was remodelling big IT contracts as and when they expire as part of a broader drive to help SMEs win a larger share of work from government departments.

At the time, Manzoni said that a special team had been set up inside the government to look at how to disaggregate major government contracts and that they had, at that stage, concluded that "every one of the monolithic contracts have different things aggregated in them". He said it was difficult to predict how those contracts could be broken up and how many of the revised lots would be picked up by SMEs.

Warren Smith, director of the Digital Marketplace, said: "We are continually focused on breaking down the barriers to entry for SMEs to do business with government, for example, by simplifying the application process. We are also breaking down the traditionally large contracts into smaller ones, which favour a more diverse range of suppliers and help government to buy services more efficiently."

The Cabinet Office said the Digital Marketplace helped save £725m of public funds in 2016/17.