A Cabinet Office minister has indicated that, having been introduced late last year, the Crown Commercial Service’s latest public sector savings arrangement with the software giant has seen significant usage

The public sector spent a cumulative total of almost £2bn on Microsoft software licences during the first five months of a five-year discount agreement between government and the tech giant.

The Strategic Partnership Arrangement 2024 (SPA24) is a memorandum of understanding between the Crown Commercial Service and Microsoft that came into effect on 1 November last year and runs until 2029. The agreement – which followed on from several previous similar memoranda of understanding under the banner of ‘Digital Transformation Arrangement’ – offers discounts to all public bodies buying Microsoft goods and services via a “compliant procurement process”, CCS said at the time.

By the end of the 2025 fiscal year – only the final five months of which were covered by SPA24 – public sector entities had already collectively spent a 10-figure sum on the vendor’s products, according to Georgia Gould, a junior minister in the Cabinet Office.

“Through SPA24, approximately £1.9bn has been spent on Microsoft software licences via third-party resellers in the financial year 2024/25,” she said. “SPA24 enables all eligible UK public sector organisations to access discounted pricing on a range of Microsoft products.”

For the first time, the products covered by the MoU include Microsoft’s Copilot generative AI platform. Also covered by the arrangement are tools including Microsoft 365,  Business Applications, and Azure cloud-hosting services.

Related content

• AWS and Microsoft refute CMA competition concerns – but smaller players endorse watchdog’s findings
• EXCL: Cabinet Office revises plan to move off Google but insists ‘clear strategic direction’ for migration remains
• MoJ retains Microsoft licensing partner in new £300m-plus deal

In the weeks that followed the commencement of STA24, CCS began the process of running “a number of aggregated competitions via resellers” to, effectively, bulk buy Microsoft wares on behalf of public-sector entities.

For public buyers seeking to fulfil their organisation’s needs, the government procurement agency recommends usage of the Technology Products and Associated Services 2 framework – “but organisations can choose the route to market that best fits their needs”, it said last year.

Gould’s comments were made in answer to a written parliamentary question from fellow Labour MP Sarah Edwards, who asked “how much the Government paid Microsoft for digital services for the last 12 months?”.

While a snapshot is provided via the £1.9bn funnelled thus far via SPA24 – a figure that, prorated over a whole year, equates to annual spending of almost £4.6bn – Gould added that “full information on government spend with Microsoft is not held centrally by the Cabinet Office, as individual departments and public bodies are responsible for their own procurement and contractual arrangements”.