Seizing the 90%: How to Drive Success in the Evolving Public Sector Supply Chain
Tussell’s latest Strategic Suppliers Report delivers a powerful message: the UK public sector market is opening up. Tussell found that the UK Government’s core group of 39 Strategic Suppliers, the giants of technology, defence, and outsourcing - saw their collective share of the public sector market fall to a five-year low of 10% in FY24/25.
This trend doesn't signify a shrinking sector; instead, it provides a clear signal that government is actively embracing a broader, more competitive supply base. For every ambitious supplier in the UK, this shift confirms that the real opportunities lie in the remaining 90% of public sector spend.
At GovNet, we see this evolution as a critical call to action. Our events, like the DigiGov Expo, HETT and the Schools and Academies Show are specifically engineered to bridge the gap between the government's growing need for agile partners and the suppliers ready to deliver.
To successfully capitalise on this shift, here are two strategic imperatives for every supplier.
The Unlocked Market: Vying for Key Incumbent Contracts
The decline in the Strategic Suppliers' market share to just 10% signals a clear intent from the Cabinet Office to diversify its supply chain. This is the moment for new and mid-sized providers to step forward and secure business that was once locked behind the largest few.
This opportunity is immense: the public sector IT market has grown by around 41% from FY19/20 to FY23/24, and the value is forecast to reach up to £14.5bn by 2026.
This report shows revenue is down across all key Strategic Supplier sectors, which indicates that public sector leaders are actively seeking alternative, specialist delivery partners. To capture this business, suppliers need to gain direct access to the public sector's most critical decision-makers.
The DigiGov Expo, running annually in September, is specifically designed to bring together the senior technology leaders and buyers who control that 90% of non-Strategic Supplier spend. This platform offers invaluable, face-to-face engagement with key public sector accounts, the individuals who are now empowered to diversify their spending and move away from traditional reliance on the core 39. The event’s reach is validated by the data: Central Government Departments and Local Authorities, which collectively spent over £8.31 billion on IT and Digital Services over the last 12 months, were represented by 524 senior buyers at the last Expo.
The Tech Imperative: Where Government Investment is Accelerating
While overall cohort revenue shifts, the core strategic direction of government spending is clear: advanced technology. The report highlights the surge in AI-related contracts (with the Strategic Suppliers winning 26 such contracts in FY24/25, up from 12 in FY19/20) and the massive direct revenue increases for core technology providers like Microsoft (up 30% over the last two fiscal periods) and Oracle (up 47% in the same period).
The public sector is refocusing its investment toward solving major national challenges, from social care and citizen experience to defence and cyber security, all of which demand tech-driven solutions.
GovNet events are explicitly focused on these cutting-edge domains. By attending, both Strategic Suppliers and emerging tech companies can engage in the debates that shape policy and funding, ensuring their offerings are perfectly matched to the government's accelerating digital needs.
The Tussell report has given us the data; GovNet events provide the platform to connect your solutions to those growing budgetary needs.
To download your copy of Tussell's 2025 Strategic Suppliers Report, click here.