For a government that keeps telling us money is tight, public procurement is one of the few levers available at real scale. Each year, close to £400 billion in public money is spent on goods, works and services, and, in a revenue-constrained environment, making that work should be an obvious priority.
The recent Government consultation response on growing British industry, jobs and skills is the clearest sign yet that ministers still see procurement as a strategic lever. It talks about using procurement to support British businesses, create jobs and skills, improve access for SMEs, strengthen supply chains and embed social value more firmly in the system. All of that is welcome, and all of it is broadly consistent with what Labour said in opposition.
But it also reveals the deeper problem. Government still seems to want procurement to do everything at once. It wants sovereign capability, social value, SME accessibility, stronger regional supply chains, cleaner contract delivery and, in some areas, greater state capacity. Those are all reasonable aims, but they are not always aligned, and ministers have still not been clear enough about which matter most.
Building on thinking from opposition
This is not new thinking dreamt up in response to disappointing growth figures or the latest round of global instability. It was a clear part of Labour’s policy development in opposition.
The National Policy Forum talked about ‘procurement for the public good’, making social value mandatory and rewarding firms that create local jobs, skills and wealth. The Plan to Make Work Pay promised a public interest test before outsourcing and the introduction of a Social Value Council, while the Plan for Small Business argued that the government should use its purchasing power far more deliberately to back smaller firms. And finally, the manifesto promised to align procurement with a new industrial strategy.
So the real question is not whether this government believes in a more strategic approach to procurement; it clearly does. The question is why, nearly two years in, an agenda that it developed in opposition still feels stuck in second gear.
The right instincts, but not enough urgency
Early on, there were signs that the government understood the scale of the opportunity.
Georgia Gould, in particular, seemed to grasp that procurement could not be treated as just a back-office compliance function. Her approach suggested a more strategic view: that if the government is spending hundreds of billions of pounds with the private sector every year, that money ought to be working harder for the country. Not just buying services, but supporting wider priorities such as growth, resilience, better jobs and stronger domestic capability.
That was why her decision to pull back and rethink the original National Procurement Policy Statement in September 2024 felt significant. It suggested the government wanted something more ambitious than a tidy refresh of the rules. The signal, at least at that point, was that procurement could and should be doing more heavy lifting.
But since then, only limited progress has been made, and with the need for any kind of stimulus to get the economy growing, it’s hard not to feel like the pace could be raised.
If ministers were serious about reform, procurement should have been one of the fastest areas to move. British policymaking has its familiar, slow and steady rhythms of consultation, response and review, but if there’s one thing these extraordinary times teach us is that different approaches are possible – Trump has issued more executive orders in the first year of his second term than Biden did in his entire 4 years, and is rapidly catching up with the number from Obama’s 8-year tenure. In a context where the UK is desperately searching for growth levers and for money to rebuild our crumbling public infrastructure, it feels the moment demands more urgency.
Too cautious for the moment we are in
The clearest sign of a lack of progress is when it comes to SMEs.
Governments of all stripes have talked for years about making public procurement work better for smaller firms, yet the system still struggles to deliver. The British Chambers of Commerce’s SME Procurement Tracker says that, despite multiple initiatives (the latest being the Crown Commercial Service’s SME Action Plan from October 2025), “the share of public procurement spent directly with SMEs remains flat – stuck at around 20% for the past 6 years running.”
That matters for two reasons. First, because it shows that ministerial intent is still not translating into actual market outcomes. Second, it exposes the limits of a procurement system that constantly talks about innovation and growth, yet continues to favour scale, incumbency, and low-risk delivery.
That is where the government still needs to be bolder.
If procurement is going to be a strategic tool, ministers have to be more willing to take informed risks. That means backing newer firms, buying more innovative technologies, and using public demand to help create markets rather than merely serving existing ones.
Lessons from abroad
The Americans have long understood how to use public procurement to drive innovation. DARPA (established in 1958) is the obvious example: the state taking calculated bets on technologies that are too early or too risky for others, but which later prove transformational. Public procurement in the US is not always treated simply as a purchasing exercise, but as a way of shaping capability, backing innovation and strengthening national advantage.
France offers another interesting example. Faced with a more unstable transatlantic environment and growing concern about strategic dependence on US technology, the French state has not just talked about digital sovereignty; it has acted. Its 2026 public digital purchasing doctrine now explicitly pushes administrations to support French and European digital capability, while ministers are rolling out sovereign tools across the public sector to reduce reliance on extra-European platforms. That is what urgency looks like when a state decides procurement is part of national strategy and then backs it up with policy choices.
Yet Britain still seems oddly hesitant by comparison.
This also points to a wider problem at the centre of government. Procurement reform has had advocates, but not yet the kind of sustained ownership that forces the system to move. Georgia Gould gave the agenda early momentum. Darren Jones has made the broader case for a state that can ‘move fast and fix things’. Antonia Romeo now arrives with an explicit brief to drive change and implement the government’s agenda. But unless that reform energy is translated into clear ownership, departmental expectations and earlier commercial input into policy design, procurement will remain stuck in the familiar Whitehall pattern of consultation, process and drift.
And that leaves us with the status quo: a public sector that too often procures as if the main objective is to avoid embarrassment. The result is a system that defaults towards large established suppliers, struggles to open the door to smaller firms, and too rarely uses the state’s buying power to back the capabilities ministers say they want.
The same logic applies in areas like net zero. If ministers are serious about clean energy and local growth, there is a case for using procurement much more creatively: aggregating demand for renewable technologies, helping build domestic supply chains, and making it easier for local communities to share in the upside of the transition rather than simply pay for it. That would be procurement in service of a mission, not procurement as a procedural exercise.
And that, in the end, is the real point.
Labour seemed to understand in opposition that procurement could be a serious instrument of economic policy. In government, it has begun to move in the right direction, but it is still asking procurement to do too many things at once without being clear enough about priorities, trade-offs or delivery.
If ministers are serious, the test is not another broad statement of intent. It is whether they are willing to publish a hierarchy of procurement objectives, set clear expectations for departments, clarify ownership at the centre, and bring commercial teams much earlier into the design of policy rather than asking them to retrofit strategy after the fact.
Billions of pounds of public money are being spent every month. The question now is whether the government is willing to decide what it wants procurement to achieve, and then act with the urgency to make it happen.