Nick Petheram, Founder, Chairman and CEO of tail spend management platform Nomia, says that as budgets tighten and service demand rises amid mounting regulatory pressure, UK councils need to find ways to stretch resources and prove value for every pound spent – and ‘tail spend’ procurement is no exception.

Tail spend is the area of public procurement that often remains under-managed, under-scrutinised, underutilised, and under the radar. Also called non-strategic spend, tail spend refers to the hundreds, even thousands, of relatively low-value purchases that together typically account for roughly 20% of total spending and sometimes up to 80% of the transactional effort for a public sector organisation.

For local authorities, government departments, NHS trusts, and other public bodies, tail spend ranges from laptops and office supplies to maintenance materials and repair callouts to graphic design and event catering – any goods and services that fall below a public procurement threshold of £214,904, according to UK regulations. Yet, despite its scale, tail spend remains the least efficient area of procurement.

Typically fragmented and spread across locations, departments, and systems, tail spend often lacks oversight and transparency. Organisations face issues such as supplier duplication, inconsistent pricing, manual processing overheads, and maverick buying – purchases made outside of approved frameworks.

As public sector pressures and expectations continue to increase, tackling tail spend is no longer optional for local authorities. Councils have little choice but to manage it more effectively – ensuring every transaction supports value for money, audit compliance, and alignment with wider government requirements such as social value and net zero.

A financial and compliance priority

The urgent need for better tail spend management is clear. The Local Government Association (LGA) warned last year of a £6.2bn funding gap over two years, growing to £8bn by 2028–29. Councils are being forced to find savings and efficiencies wherever they can, and non-strategic procurement is no exception.

Yet few have the internal capacity to manage tail spend more effectively. Procurement teams are rightly focused on strategic spend – large, high-impact contracts. Tail spend often falls into an awkward middle ground – too low in value to command attention, but too significant to overlook. Without a clear strategy, it can become a drain on internal resources.

Industry benchmarks show that public bodies can save 5-15% on tail spend by finding ways to streamline purchasing through consolidated purchases, automated processes, reduced administrative overhead and other operational efficiencies. But more closely managing tail spend is about more than savings. Unmanaged tail spend can fail to meet audit requirements, miss social value targets, and complicate sustainability reporting. In an era of transparency and scrutiny, those are compliance risks few government bodies can afford.

Social value and sustainability are now embedded in public procurement through the Social Value Act, reinforced by the Procurement Act 2023. UK government climate and Net Zero legislation means government purchasers are now required to align spending with environmental targets. On top of that, recently announced government plans to penalise large companies that fail to pay suppliers on time mean more precise tail spend tracking and management is now also essential for regulatory compliance.

The supplier base for tail spend typically includes local small- and medium-sized enterprises (SMEs) and niche providers. These are exactly the types of businesses that public authorities are under growing pressure to support. However, onboarding and managing them at scale presents real challenges. Without fit-for-purpose systems, authorities often default to incumbent suppliers – limiting diversity, innovation, and alignment with local economic development goals.

A smarter way forward

Fortunately, the solution doesn’t lie in more internal staffing or new systems built from scratch. A growing number of councils are turning to outsourced tail spend management service providers to manage the full lifecycle – from supplier matching and onboarding through to contracting, fulfilment and payment – while ensuring audit-readiness and policy compliance.

The North East Procurement Organisation (NEPO) recently partnered with Nomia to launch a Tail Spend Management Services Framework to support its 12 member authorities, plus associates and other public sector bodies. The NEPO framework aggregates and manages tail spend across categories, suppliers, and authorities, enabling councils to gain control of fragmented spend, reduce operational overhead, and refocus internal teams on strategic priorities.

NEPO’s Tail Spend Framework brings order to fragmented purchasing. It helps public bodies streamline workflows, improve compliance, and achieve meaningful savings, while broadening access to innovative and diverse suppliers.

Turning a burden into a strategic asset

Tail spend has often been overlooked both in government and business because it’s complex, decentralised, and perceived as not necessarily providing value relative to the effort required to bring it under control. But that’s changing. With the right approach, it can be transformed from a source of inefficiency into a lever for savings, compliance, and innovation.

Done right, tail spend management turns procurement from an administrative burden into a strategic asset that ensures cost control, efficiency and compliance.

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