Insight paper – Public Sector Buying Patterns


The purpose of this paper is to identify Public Sector spending patterns and identify factors that will help bidders to better understand the market and increase the chances of winning more contracts. Market reports and Contracts Advance data have been used to identify peaks in buying activity. These peaks can pressurise bidders, but they present a great opportunity for businesses to grow.

Council Spending Patterns
The spending patterns of local councils in England vary depending on location, population size, and demographics. Some of the most common areas (73%) for Local Authority 3 rd Party spend include:

Social care: Councils spend a significant portion of their budget on services for older people, children and families, and individuals with disabilities. £18.2bn – Adult social care.

Infrastructure and transport: Councils also allocate funds for road maintenance, street lighting, public transport, and other infrastructure projects. £6.9bn Highways & Transport.

Environmental services: This includes waste management, street cleaning, and park maintenance. £4.1bn – Waste & Environment.

Housing and regeneration: Councils often invest in new housing developments, as well as refurbishing existing properties. £13.1bn – Property and Construction.

Professional Services & ICT: Local Authorities need to buy in skills and knowledge to enable them to operate safely and effectively which includes: Consultancy, Legal, Finance and Insurance. £4.9bn – Professional Service & ICT/Business Process Outsourcing.

Local Authorities release a large volume of tenders every year, which are often carefully timetabled through detailed commissioning/buying plans. However, Local Authorities (or at least individual departments) can find themselves with an under-spend as the financial year-end approaches. They often release tenders or mini competitions (via frameworks) to ensure this budget is used, increasing their chances of receiving similar levels of funding for the following year.

Insights from Contracts Advance

There are over 50,000 contracts ending in the last two months (February and March) of 2023. The aggregated value of those contracts is estimated at c.£825bn. Whilst this number might appear high, this includes contracts that were awarded any time over the last 10 years and are now expiring.

Based on an analysis of the data held within the Contacts Advance Software there was a smaller than expected increase in the volume of tenders being released between January-March each year. On further examination, it appears there is a significant volume of goods and services being procured through existing frameworks which often relate to one-off (non-recurrent) purchases. The high point for tender volumes has been July for the last two years with nothing to suggest a change in this pattern for 2023.

Observations from within the Contracts Advance Advisory Service who have worked with public sector buyers and suppliers over the last two decades include:

  • Smaller opportunities can be at very low levels (e.g. £5k-£50k) and are often managed using RfPs, RfQ or direct award through a framework. These can sometimes be difficult to find and a good relationship with the buyer is essential to being included
  • Larger opportunities have been managed as closed tenders (a select number of suppliers), whilst in other instances Local Authorities may involve the wider open market
  • In many cases, particularly those opportunities that are released in March, the turnaround time can be very short (e.g. 1 week)
  • There are c.700 council contracts (with published award notices) that are due to expire in the next 5 years in the West Midlands, most of which are likely to be retendered
  • Of these 700 contracts, c.20% have a contract start date of April meaning that resources need to be available to mobilise, as this is the peak time for new contracts starting
  • In addition to the contracts that are likely to be retendered, there will be a number of spot purchases made so that money can be spent in-year non-recurrently, freeing up budget for the following year to be used for other purposes
  • C.50% of Local Authority spending is in the South of England with 20 & 30% in the Midlands and North respectively

Factors for bidders to consider that will help with planning and growth

  1. How is your relationship with the commissioner/buyer? Are they likely to give you advance warning of opportunities? Is pre-bid activity a part of your bid process?
  2. If your relationship is good, are you likely to be invited to a closed opportunity?
  3. How do you use market analysis data and the Freedom of Information process to build and qualify a pipeline that delivers your growth targets for 2023 and beyond?
  4. What capacity do you have to respond? Plan ahead and check when annual leave is booked and what do if there are unplanned absences
  5. What capacity do you have to (mobilise and) deliver the service/product if successful? Ensure you have operational capacity and ability to deliver the service described in your bid
  6. For those opportunities going to the open market, make sure you have your search alerts set up correctly to ensure they are visible to you
  7. Which frameworks do you need to be a member of to benefit from the Q4 non-recurrent spend across the public sector?

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