Local Authority Third-Party Spend in England continues to rise rapidly and is at £91.8bn, up by 10% across 2024 when compared to 2023 and 22% when compared to 2022 spend. Inflation averaged 2.5% across 2024 and 7.3% in 2023, showing that spending with third parties increased in absolute and real terms over the 2-year period.
Data released by Oxygen Finance shows the two categories that contribute the most to 2024 spend are Vulnerable Citizens & Public Health and Buildings. Vulnerable Citizens & Public Health now represents 41% of total third-party spend at £37.7bn and saw the biggest absolute spend increase, rising by £3.8bn in 2024, an increase of 11%. 23% of total third-party spend is on the Buildings category.
The data appears in the Local Government Third-Party Spend Insight 2025 which gives a definitive view of expenditure across local government in England, providing local authorities and their suppliers with data that can be used to optimise procurement and commissioning activities.
A total of £37.7bn was invested in Vulnerable Citizens and Public Health (VC&PH) in 2024. Adult Social Care continues to be the highest spending subcategory (£26.4bn) within VC&PH and is driven by higher spend on Residential Care (Elderly) – £8.0bn, Health & Social Care (General) – £4.6bn and Residential (Special Educational Needs, Disabilities, Mental Health etc) – £4.5bn.
Building spend has also consistently increased, it is up by £1.7bn in 2024, which is an 8% increase. In contrast to previous years, Utilities has seen a reduction due to a fall in spend on electricity and gas. Increased spend on Property and Construction is responsible for the overall category rise. The category with the largest percentage increase in 2024 is in the Highways & Transport category; £1.3bn additional spend equating to a 15% rise in 2024, and an increase of 28% over the two-year period.
Culture and Leisure is the only category to see a reduction in third-party spend in 2024, falling by -3% in 2024 compared to 2023.
Waste and Environment, Buildings, and Highways & Transport category suppliers dominate the highest spend supplier list. Total spend with the top 20 suppliers exceeded £9.3bn in 2024; this is approximately 10% of the total third-party spend.
The report also provides an estimate of carbon emissions data, which allows local authorities to better understand the categories with the highest emissions and thereby support prioritisation of carbon reduction initiatives. Carbon emissions through the supply chain increased by around 6% in 2024 to c20.6mn MtCO2e.
Vicki Sloane, CEO of Oxygen Finance, said of the findings “The continued rise in third-party spending by local authorities highlights the need for transparency and collaboration in how this investment is deployed. If the overall increase in spending continues at its current pace, Local Government spend will exceed £100billion in 2025.
“Against this backdrop, the importance of effective procurement – and the procurement profession – continues to grow. Procurement leaders are not only tasked with meeting higher demand and navigating market instability, but also with ensuring compliance with the Procurement Act 2023, and the impact of Devolution and Local Government Reorganisation. There is a real opportunity for suppliers to work more closely with local government – not just to deliver services, but to help solve complex challenges through greater collaboration, innovation, and shared purpose. By forging stronger, more strategic partnerships, suppliers can be part of the solution in creating more resilient, sustainable local communities.”
All data insights are sourced from Oxygen Finance’s Insights Spend tool as extracted in May 2025.
The Local Authority Third-Party Spend Insight is based on data for all invoices over £500 published by councils in England and shows that spending increased in 2024 in both absolute and real terms.
To download your copy of the report, please visit: Local Government Third-Party Spend Insight 2025 – Oxygen Finance
