Barclays: UK Tech Firms to Scale Despite Procurement Delays

In a report released by Barclays, the banking and financial services company highlights the high confidence business leaders have in the UK innovation economy. 

71% of leaders are upbeat about their business prospects over the next year, with 56% planning their next major phase of growth in the UK. 

This mindset translates into significant investment plans. 97% are expecting to increase their spend on compute, cloud or data infrastructure over the next year, with 69% anticipating investments to increase by at least 20%. 

Looking further ahead, 49% expect the UK to strengthen its position as a global innovation hub in the next decade. 

The bottlenecks 

Despite these positive outlooks on future growth, 50% are reporting that customers are pausing or delaying spend, leading to less predictable routes to revenue. 54% say procurement timelines have worsened in the last two years, 52% pointed to longer pilots and proof-of-concept requirements. 

Additionally, a lack of transparency in public sector procurement, 28%, has also been noted as a key challenge, with limited visibility over contract times and pipelines. This makes it harder for financial services providers to lend against future revenue. 

“It’s encouraging that UK innovation businesses remain ambitious to scale within their home market. The UK has strong foundations to support that growth, from world-class research and talent to deep sector and investor ecosystems, with a clear opportunity to help more firms grow and retain value in the UK,” says Helena Sans, Head of Innovation Banking at Barclays UK Corporate Bank.

“But as firms move from early growth to scale, access to finance is increasingly linked to visibility of future revenues. Where procurement timelines are unclear and pipeline visibility is limited, it becomes harder to lend against that future income, making greater transparency, particularly in public sector pipelines, critical to unlocking growth.”

Demand shifts in the innovation economy

As these pressures build, Barclays is seeing a shift in the innovation economy. Anonymised data shows how performance is diverging across the sector:

• Cash inflows into innovation business accounts have declined by 4.9% year-on-year.
• Inbound international payments to innovation Business Banking SMEs rose by 2% in contrast to a 1.8%decline across all Business Banking SMEs, suggesting an uplift in inward investment and international sales for innovation SMEs.
• Loan volumes increased by 0.9%, with almost 29% saying bank lending will be one of the most important methods for financing growth over the next 12 months, behind private equity (36%) and government grants (33%).

Barclays also reports strong resilience within its Business Banking for SME technology firms. Computer hardware businesses (including data centres) saw a 7.1% increase in cash inflows and 14.9% increase in international payments. For others, the picture is more mixed.

Mark Northen, Head of Innovation Banking at Barclays Business Banking, says: “Many firms are taking a cautious approach to borrowing as they navigate slower routes to revenue and visibility barriers.

"At the same time, sectors such as defence infrastructure and computer hardware are showing strong growth potential. Ensuring businesses can access the right funding and expertise will be key to sustaining this momentum.

“Our focus at Barclays is to bring founders, investors, corporates and policymakers together to focus on what comes next and on how the UK can translate innovation into real-world impact. We’re working closely with innovative businesses right across the UK to provide access to expertise and networks to build the ideal ecosystem to accelerate their growth from early-stage innovation through to global scale.”