G-Cloud sales near £1.6bn as proportion of SME sales remain stable

Written by Rebecca Hill on 15 December 2016 in News
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The latest figures on the government’s cloud procurement framework G-Cloud show that just over half of all sales are to smaller companies – a figure that has remained largely unchanged over the past two years.

Cloud computing figures released today - Photo credit: Flickr, Chris Potter, CC BY 2.0

The figures, which were updated with October’s sales this week, show that total sales have reached £1.57bn – up from £1.39bn in September.

Of these, 64% by volume have been to smaller companies, with the volume of sales to SMEs in 2016, up to October, reaching 68%.

This is a slight increase on the 2015 figure of 64% and a boost from the 55% and 58% in 2013 and 2014, respectively, but it may not be big enough to silence the concerns about how willing government departments really are to work with SMEs.

Ministers have repeatedly said that the UK has “lowered the barriers” for SMEs to sell digital services to government, and government has pledged to spend £1 of every £3 spent on procurement with SMEs by 2020.

However, some smaller suppliers have said they find using G-Cloud difficult, with departments failing to look for new companies to work with.

And the government is currently reviewing its Mystery Shopper service, which investigates suppliers’ issues with public sector procurement, with a survey for both suppliers and buyers on its website.


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Meanwhile, the latest G-Cloud figures reveal that the vast majority of purchases are still made by central government – it is responsible for 73% of all time sales by volume, while local government is responsible for just 8% of purchases.

However, there has been an increase in the use of G-Cloud by local government in recent months – for instance 466 G-Cloud sales were returned in August 2016, compared with 273 in August 2015 and 138 in August 2014.

Local government has been repeatedly urged to adopt the cloud, with some concerned that councils would get left behind the shift to the cloud. Research company Eduserv has put the lack of enthusiasm for cloud services down to a lack of knowledge or planning about the cloud and problems with policies that don’t encourage or even allow the procurement of services on G-Cloud.

The government has also released figures from its Digital Services Framework, a site where small businesses can offer services to public bodies, which is being replaced by the Digital Outcomes and Services platform.

Sales through the platform totalled almost £92m to October, up from £82m in August. Some 53% of total sales by value were to SMEs – a figure that is significantly higher than the 35% announced at the last release due to what the government described as a “historical calculation error”.

Of the total sales, 85% by value were through central government – this is the same as the August figures, which were up from 73% by value in the June accounts.

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Comments

David Dinsdale (not verified)

Submitted on 15 December, 2016 - 14:04
It may help you in developing commentary on G-Cloud spend to look at the GovSpend.Org.UK web site. Your statement that SME spend has remained static is not correct. Spend with SMEs is increasing significantly in both spend and percentage terms. Spend: 2014 - £172m, 2015 - £288m, 2016 - £366m (year to date) Percentages: 2014 - 49%, 2015 - 54%, 2016 - 61%. Happy to discuss - support@govspend.org.uk

Rebecca.Hill

Submitted on 15 December, 2016 - 14:55
Thanks very much for your comment David. We calculated the %s in the story (2014: 58%, 2015 64%, 2016 to Oct: 68%) by volume of sales, rather than value, and said that that proportion had remained largely stable over the past couple of years rather than static. But your analysis of the figures is very useful, so thanks for mentioning it to us. Beki

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