Public procurement in the national interest: Reflections from the CMA
The UK’s Competition and Markets Authority highlights public procurement as a strategic tool for economic growth and sovereignty, urging clearer priorities and better coordination to maximise taxpayer value.
Public procurement in the UK involves around £400 billion in annual government spending on goods, services and infrastructure, representing a significant portion of taxpayer funds. The CMA argues that procurement decisions influence firm growth, technology adoption, investment flows and national strategic strengths. While traditionally seen as administrative, procurement is now recognised as a key lever in industrial strategy to support a stronger, more dynamic and resilient economy.
The CMA published two reports after two years of engagement, recommending ways to enhance procurement’s role in economic success and sovereignty. The reports focus on leveraging competition to support industrial strategy, with findings drawn from work across eight priority sectors and detailed studies on scale-up challenges, cloud computing, civil engineering and defence.
The CMA emphasises that procurement must balance multiple objectives, including value for money, innovation, growth, resilience and national security, which often require trade-offs. It warns that prioritising short-term cost savings may undermine long-term competition and market dynamism, while favouring established suppliers could hinder innovative British firms from scaling.
Fragmentation in public sector procurement weakens purchasing power, as inconsistent approaches and limited coordination reduce incentives for suppliers to invest in skills and innovation. The CMA recommends more deliberate collective action and shared expertise among buyers to strengthen market-shaping capabilities and provide suppliers with clearer future demand signals.