The unexpected announcement of a UK general election on 4 July 2024 by Prime Minister Rishi Sunak may invigorate the Govtech supply sector. Despite a sluggish start to 2024 in public sector ICT procurements, this development offers renewed prospects for technology providers, potentially revitalizing digital transformation projects and boosting opportunities in the latter half of the year, says GlobalData, a leading data and analytics company.
Whilst the timing has surprised many, it offers hope to the hundreds of technology companies that provide goods and services to facilitate new and better public services. 2024 has started very slowly for procurements of new technology solutions. GlobalData’s comprehensive analysis of the public sector ICT market shows that, compared to the same period in previous years, new IT services opportunities released by civil central government bodies are down by almost 90%.
Rob Anderson, Chief Analyst, Public Sector at GlobalData, comments: “The slow-down in new projects is a result of a number of factors. The pressure on departmental budgets due to the economic situation has inevitably meant that government agencies have had to review the ongoing transformation projects and prioritize those that offer the quickest return on investment, either through enhanced services or operational savings. However, uncertainty over when an election would be called, and the resulting possible change of government has also meant key projects relating to current policy have been delayed or put on hold for fear of later cancellation and the consequent waste of money and effort.”
The short-term outlook offers little comfort now that the pre-election period, previously known as purdah, has begun. Historically, civil servants have chosen not to engage with suppliers during this period to avoid making any decisions that could have an effect of the election. This may result in procurements that have already begun and contracts due to be awarded being delayed.
Anderson continues: “In previous general elections, GlobalData analysis shows that there is decreased procurement activity in the purdah period, and it is unlikely to be very different this year, so many suppliers awaiting a new opportunity to come to market or the outcome of a live procurement being announced will be frustrated.”
If, as the opinion polls suggest, a Labour Government is elected, then again there may be a hiatus in procurement activity as the new administration works to assess the fiscal situation and selects which programs to focus on.
Anderson concludes: “Peter Kyle, Labour’s Shadow Secretary of State for Science, Innovation, and Technology, spoke enthusiastically at a recent techUK conference, about the part that technology can play in reinvigorating Britain’s economy. Suppliers will be heartened by the apparent willingness of the Labour Party to embrace innovative tech-enabled solutions to boost productivity, thereby reviving the nation’s GDP.
“If the election had been delayed until the Autumn, many suppliers would have suffered poor returns from the public sector for the remainder of 2024. With a refreshed policy agenda for the second half of the year, there will now be hope that the stagnant digital transformation agenda will be rebooted and deliver rewards for the Government, citizens, and suppliers alike.”
