UK Government Pioneers Strategic Method to Digital Sourcing
The UK’s procurement landscape is navigating several disruptions due to sustainability pressures, advancements in AI-driven procurement technology and regulatory reforms.
Organisations must embrace ethical sourcing, digital transformation and resilience to maintain their competitive edge in the dynamic landscape.
Responding to calls from the National Audit Office (NAO) for a more strategic approach, the UK Government is set to develop a digital sourcing strategy for departments.
The strategy will be developed over the course of summer 2025 and is set to ensure government digital procurement becomes more transparent, efficient and cost-effective while improving competition and innovation in the technology industry.
Chief Technology Officer for the UK Government, David Knott, states: “Sourcing in digital at the moment is probably more complicated than it used to be. It used to be an old buy-versus-build choice, and now it is much more buy, build, partner, procure, innovate and so on.”
What impact will this digital sourcing strategy have?
Government officials were also questioned by the Public Accounts Committee (PAC) on their lack of data on how much they spend on technology contracts.
Andrew Forzani, the UK Government’s Chief Commercial Officer, states that the top 39 suppliers have good procurement data but mid-tier and small and medium-sized enterprises (SMEs) do not (as their contracts are not managed centrally).
The new digital sourcing strategy will help craft a more transparent, efficient and innovative approach to digital procurement to help strengthen the UK’s digital economy while providing better value for taxpayers.
Departments will have clearer guidelines on whether to buy, build, procure or partner technology solutions. This will streamline digital procurement, reduce confusion and catalyse the implementation of new technologies in public services.
Greater data collection and automation will provide real-time insights into digital procurement spending, reducing opportunities for mismanagement or waste.
Digital investments will also be more closely aligned with Spending Review 2025 priorities, ensuring the government can prioritise projects effectively that improve public services and digital transformation.
Civil service Chief Operating Officer and Cabinet Office Permanent Secretary Cat Little, explains: “One thing that we are doing through the spending review this time round is a bottom-up zero-based review of government expenditure. Our colleagues in DSIT are working with the Treasury to look at all technology and digital expenditure to understand what it is being spent on.
She continues to add: “One thing that we are working with the Treasury on is what more we can do to automate and gather that information on a more frequent basis after the Spending Review, so that we can monitor it and then align it to the procurement data that we are now capturing. There is something there that we should take away and build out a more detailed data plan on.”
What is the Digital Commercial Centre of Excellence?
The Digital Commercial Centre of Excellence is a UK Government initiative outlined in ‘A blueprint for modern digital government.’
It strives to enable tech scaleups, start-ups and SMEs to access government contracts by reforming procurement processes.
The centre will help to secure long-term IT and digital solutions for the public sector by enhancing competition and innovation. It will ensure procurement policies align with modern technology trends, such as cloud computing and AI.
The initiative falls under the Department for Science, Innovation and Technology (DSIT), which is striving to digitally transform public services. The centre will allow local councils and government departments to effectively adopt new and cutting-edge technologies.
The Digital Commercial Centre of Excellence will help enhance the Digital Sourcing Strategy to ensure procurement processes are innovative, efficient and inclusive of diverse suppliers.
David continues: “One of our priorities for the Digital Commercial Centre of Excellence is to jointly produce a really clear digital sourcing strategy that will have multiple parts. The first part will be really clear steers to departments on when it makes sense to build things ourselves and when it makes sense to buy from the market.”
The Procurement Act
The UK Government has implemented several changes in 2025 to help improve the procurement landscape, with The Procurement Act 2023.
This act came into force on 24 February 2025 and is changing public procurement in the UK to improve access for all businesses and simplify processes.
By providing greater support for SMEs, more flexible bidding processes, greater oversight and enhanced transparency, the act aims to create a more efficient and accessible public procurement system.
The Digital Sourcing Strategy will help enhance the UK Procurement Act’s aims of improving efficiency, transparency and accessibility for businesses, particularly small and medium-sized enterprises (SMEs).
Both initiatives will help to create a more transparent, efficient and SME-friendly public procurement environment.
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