Analysis: how has coronavirus impacted local government IT spending?

PublicTechnology analysis of government data shows that the volume and value of IT and digital services contracts in the local government sector has been hit this year

Credit: PA

It recently emerged that, to pre-empt the anticipated negative impact of the end of the Brexit transition period on 31 December, Worcestershire County Council is looking to stock up on £20,000 of essential IT items before the end of this year.

The quickfire procurement exercise suggests that next year could be a challenging one for any local authorities planning to make investments in IT or digital services.

And analysis of government data conducted by PublicTechnology shows that the impact of Covid-19 – both operationally and financially – has already noticeably stymied local government spending on tech.

In 2020’s third quarter spending across the sector on IT products, technology services, and software development was considerably lower than in the corresponding period last year – with the number and values of deals shrinking noticeably.

Data from the GOV. UK Contracts Finder service shows that, in the three-month period from the start of July, a total of 278 award notices for contracts addressing the provision of technology goods and services were published by local authorities. These deals were worth a cumulative total of £77.76m to the suppliers in question – which equates to an average of £282,781 per contract.

Figures for the corresponding period last year show that 307 IT contracts were awarded during Q3 2019. These were worth a collective tally of £97.32m – almost £20m higher than the 2020 figure. The average deal worth stood at £321,197.

This means that the volume of contracts awarded in 2020’s third quarter was down 9.45% when compared with the prior year. The cumulative value of contracts dropped by 20.1% year on year, while the average size of engagements fell 12%.

The third quarter of 2019 saw several authorities invest in ambitious and wide-ranging transformation programmes.

Local government IT and digital procurement in Q3 2020

278 contracts awarded
Down 9.45% YoY

£77.76m cumulative value
Down 20.1% YoY

£282,781 average deal worth
Down 12% YoY

Among these was Leeds City Council, which led the creation of a £10m framework – established in September 2019 – through which public-sector organisations across the Yorkshire and Humber regions could procure agile development and support services.

The procurement documents said: “The requirements under the framework consist of: business analysis/discovery to produce recommendations for change (organisational, people, process and/or technical); product design, development and testing; [and] delivery and ongoing support of the product, or handover with knowledge transfer and appropriate documentation.”

This year’s third quarter was not devoid of multimillion-pound deals, but the bigger investments tended to be necessary software renewals, rather than spending on new technology or transformation initiatives. 

Liverpool City Council also made some major investments during the third quarter of last year. The biggest – and most prescient – of which was the £3.4m the authority spent on a five-year “agile workplace transformation” deal. The deal, which commenced in July 2019, covered the implementation and ongoing management of a virtual desktop offering – that will surely have come in handy during this year’s wide-scale switch to homeworking.

This year’s third quarter was not devoid of multimillion-pound deals, but the bigger investments tended to be necessary software renewals, rather than spending on new technology or transformation initiatives. 

Both Cambridgeshire County Council and Wolverhampton City Council signed new three-year Microsoft Enterprise Agreement contracts during Q3, at a cost of £5.45m and £5.77m, respectively.

Derbyshire County Council, meanwhile, spent £4.9m on a five-year contract for SAP licences.

Alongside this big-ticket spending there were also a number of examples of councils using digital services in their coronavirus response. Among these was the London Borough of Hackney, which spent £89,250 on a project to create a “front door” on its website for all services and information related to the pandemic. This functionality was built by repurposing tools and platforms that had been created through a previous transformation project dedicated to its housing and benefits services.


In a recent webinar discussion exploring local government digital transformation and the funding challenges it faces in the months ahead, PublicTechnology was joined by Pam Smith, chief executive of Stockport Metropolitan Borough Council and David Hipwell, local authority sales lead at SAP Concur.

Registration is free for the public sectorclick here to view the discussion.

Sam Trendall

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