Untapped potential: Procurement reform could unlock billions in growth for britain

September 2026

New Cirata and BackUKTech report sets out how Government procurement reform could help British technology businesses scale at home, with an illustrative five-year extrapolation pointing to more than £1.4bn in additional direct GVA and 35,000 additional job-equivalent years.

London, 28^th September 2026 - One of Britain's biggest untapped opportunities for growth is already hiding in plain sight: the hundreds of billions of pounds the public sector spends every year.

New research published today by Cirata and the BackUKTech campaign argues that practical changes to the way government buys technology could help more British businesses win customers, scale at home and compete internationally, while increasing competition and delivering better value for taxpayers.

Opening Doors in UK Public Procurement: Evidence to Inform a Pro-Startup Reset finds that SMEs received 21% of direct public procurement spending in the latest analysed data. But performance varies significantly across the public sector. Local government directed 34% of procurement spending to SMEs, compared with just 10% across central government and 16% across NHS bodies. The percentage of central government procurement spent on SMEs has gone backwards in a decade. In that same decade, the UK tech sector has grown from 2m jobs to 5m jobs and from a valuation of $60bn to $1 trillion. British tech companies are growing and winning overseas in the most competitive global markets, yet too often struggle to win government business at home.

The report also identifies a fundamental gap in government data. Procurement reporting distinguishes SMEs from larger businesses, but does not adequately identify young, innovative or high-growth companies. That means government cannot reliably determine how many startups and scaleups are competing for public contracts, how many succeed or whether initiatives intended to improve access are working.

The economic opportunity

The report models the potential impact of making £5bn of annual public demand accessible to smaller challenger businesses by year five. At that annual run rate, the model estimates around 29,000 UK job equivalents and £2.6bn in direct GVA would be supported through smaller challenger suppliers.

Extending the report's illustrative model over five years, shifting just 6% of total government procurement expenditure, equivalent to £25 billion of relevant public-sector demand moving from larger incumbent suppliers towards smaller challenger businesses, would equate to approximately 35,000 additional job-equivalent years and more than £1.4 billion in additional direct GVA. This is an illustrative extrapolation rather than a forecast and does not assume any preferential treatment for British companies.

The estimates also exclude potential wider benefits including follow-on sales, investment, exports, innovation spillovers, multiplier effects across every postcode, and productivity gains from public-sector adoption.

The report argues that this does not require another major government spending programme. In fact, the opposite. It is about using existing public demand differently: making appropriate contracts easier for credible challenger businesses to compete for and creating clearer routes from successful pilots to commercial adoption.

Customers, not just capital

The findings come as Britain faces a wider challenge retaining the economic value created by its technology entrepreneurs. Dealroom research cited in the report found that 42% of unicorns founded by European-origin entrepreneurs were ultimately built in the United States, while Tech Nation found that 39% of growth-stage UK founders surveyed were considering relocating their headquarters outside the UK, with almost all of those considering a move looking towards the US.

Cirata and BackUKTech argue that the scaleup debate has focused heavily on access to capital while paying too little attention to something more fundamental: access to customers.

Government is by far one of the largest customers in the British economy. Giving credible challenger businesses a fair opportunity to compete could help these companies establish revenue, credibility, product-market fit and reference customers at home before taking those businesses into international markets.

Stephen Kelly, CEO of Cirata and former Chief Operating Officer of the UK Government, said:

"A huge part of Britain's growth opportunity is hiding in plain sight. Government already has enormous purchasing power. We don't need another big spending programme. This could be part of a reform that actually reduces spending and improves value for money for taxpayers. We need to use the government money we're already spending more intelligently. Everyone talks about capital for scaleups. Talk to the CEOs and they'll tell you something even more fundamental: they need customers. Often, customers are more important than capital. British technology companies are winning in some of the toughest markets in the world, like the USA, yet too many struggle to get a fair crack of the whip at home. This isn't about handouts or buying British regardless of value. It's common sense. Give good British companies a fair chance to compete and, when they win, encourage them to grow here, hire here, raise capital here, list on the LSE here and pay taxes here. We should be celebrating these great British entrepreneurs, not pushing them to look elsewhere. There are tried and tested approaches here in Britain and overseas that show what works, as highlighted in the report. Other countries have developed successful playbooks and now the UK is playing catch-up. We have an enormous opportunity to make procurement a vital part of the country's growth strategy."

Alex Stephany, Beam

"Beam, the AI platform for frontline services, has grown hugely in recent years - working with hundreds of government customers across UK Local Government, the US, Australia and across the EU. But despite successful pilots that point to millions in potential savings, UK Central Government has been too paralysed to simply roll out tools offered at cost. Meanwhile, Central Government spends billions on non-UK tech. Perhaps worse, Central Government pours millions into projects to build technology from scratch with no process or formal consideration at all as to how they undermine world-leading British businesses - when jobs and growth are the only way we can fund public services and maintain our place in the world. Procurement is one of the few things truly within the control of Central Government. Yet successive governments have said procurement is "too complex" to fix . The Prime Minister and his team have got off to a great start. Is this Government up to it?"

A practical procurement reset

The report does not advocate preferential treatment for British companies or lower standards for smaller suppliers.

Instead, it identifies practical reforms already demonstrated in Britain and internationally, including better measurement of startup and scaleup participation, identifying contracts suitable for challenger suppliers, breaking appropriate contracts into smaller or modular lots, proportionate qualification requirements, greater use of open-entry procurement routes, stronger technical buying capability and clear routes from successful pilots to commercial deployment.

The report examines approaches from the United States, Canada, the EU, Estonia, Singapore, South Korea and Israel, concluding that successful startup procurement works best as a pathway from public need through testing to paid adoption, rather than as a standalone innovation initiative.

The objective is straightforward: Grow here. Win customers here. Hire here. Raise capital here. List on the LSE here. Pay taxes here. Acquire companies from here. Win internationally from here. Grow to be global market leaders.

Opening doors in UK public procurement: Evidence to inform a pro-startup reset is available here

About Cirata

Cirata provides data integration and management solutions that help organizations move, protect and control critical data across complex enterprise environments. Cirata plc is listed on the London Stock Exchange, with its Product, Engineering and R&D resources all onshore based in Belfast, Sheffield and Manchester.

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Will Miller
VP Marketing, Cirata
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