29 January 2024

Public Procurement Quarterly Update: 2023 Q4

Public Procurement Quarterly Update: 2023 Q4 image
Image: Panchenko Vladimir / Shutterstock.com.

Public procurement experts and LocalGov partners, Tussell, have analysed the local government procurement market for the fourth quarter of 2023.

The value of contracts awarded by local government dropped off in the final quarter of 2023. A combined total of £4.2bn were awarded through almost 5,000 contracts in October-December 2023. This is less than half the value of contracts awarded the previous quarter. Consistent with this, contract volume is at a two-year low.

The Market

Last quarter, the South East awarded both the largest value and volume of awards. This included a £200m contract awarded by Mole Valley District Council to Kier. This was a 10-year contract for assistance in the regeneration of sites in Leatherhead.

The West Midlands awarded the second largest total award value, but via less than a quarter of the volume – highlighting a higher average contract value.

Indeed, the West Midlands awarded last quarter’s highest value contract – a £265m contract awarded by Solihull Metropolitan Borough to Morgan Sindall for the redevelopment and repurposing of Mell Square Town Centre.

Kier was the top local government supplier by award value last quarter, accumulating £350m across three different contracts. In addition to Solihull Council’s £200m redevelopment contract, they were awarded a £150m contract by Somerset Council for highway term maintenance, and a £6,000 contract by Buckinghamshire council for pump replacement work at a school.

Morgan Sindall, another construction supplier was the second largest supplier, winning the highest volume of contracts (seven) across six contracting authorities, highlighting their strong presence among Local Authorities in the UK.

Of the top five contracting authorities by total award value, Enfield Council awarded the largest volume of contracts (58). Twenty-six of these contracts were for the provision of holiday activity and food providers (HAF) – this was via a Department for Education funded scheme which ran through the winter holidays.

Sectors

Throughout 2023, construction remained the highest value sector in local government. Four of the top five suppliers in the last quarter alone were construction, as were two of the highest value frameworks.

Last quarter, health and social care was the second largest value sector – driven by a £112m contract awarded by Kent County Council to three suppliers for the supported accommodation of children in care.

Transport awarded the highest volume of contracts last quarter. Top awards within this sector included a £44m award to Tructyre Fleet Management by Horsham District Council. This was for the provision and installation of tyres to fleets in both Horsham District and Crawley Borough Councils.

Frameworks

Despite the fall in total contract award value in Q4, the proportion of contracts awarded via frameworks increased by 4%. Highlighting the growing importance of this route to market in Local Government.

Last quarter, Enfield Council’s Meridian Water Strategic Infrastructure Works was the framework with the highest value of call-offs. Developed specifically for works that support the development at Meridian Water, a £121m contract was called-off to Vinci Construction for two years of works.

The YPO’s Managing Temporary and Permanent Recruitment framework was called-off twice by local authorities last quarter. Firstly, a £55m award by Cheshire East Council to Comensura for the provision of a managed service for agency staff, and secondly, a £6.5m award by Sheffield City Council to both Reed and Hays for temporary agency staffing.

This analysis was compiled by Tussell – the market’s trusted source of insight into UK public procurement. To learn how Tussell’s market intelligence platform can help you to make smarter, more cost-effective procurement decisions, visit our website.

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