With the response to the Covid-19 pandemic having necessitated significant investment in ICT services across both local authorities and the NHS during 2020, one could be forgiven for expecting 2021 to have signalled a return to more “normal” levels of government IT spend. However, levels of council ICT spend remained largely similar to those of 2020 during 2021, whilst total spending by the NHS on ICT actually increased to reach £3.21Bn by the end of the year.

Below, we use Oxygen’s Insights Spend to take a look at which individual ICT spend categories saw continued investment throughout 2021.

Software Applications, Development & Support

Council spending in this category, which covers bespoke local government software development and licences for off-the-shelf software, increased by 4.58% in 2021 to reach almost £788M. NHS spend saw an even greater increase, rising by just over 28% to reach £1.06Bn.

The leading local authority supplier saw its public sector earnings increase by almost 20% during 2021, whilst the leading NHS supplier saw its public sector earnings rise by over 61%.

ICT Infrastructure

Council spend on ICT infrastructure, such as the supply of servers, network equipment etc as well as cloud infrastructure services, increased by around 10.5% to reach £298M in 2021. NHS spend on these services also saw an increase, rising by just under 4% to £587.42M.

The same supplier led both the local authority and NHS market for these services in 2021 and saw its public sector earnings increase by just over 12%.

ICT Consultancy

While council spend on professional services, such as digital relating to ICT saw an increase of less than 1% during 2021, NHS expenditure on this type of consultancy went up by around 18% to reach almost £39M.

The leading supplier of these services to NHS organisations saw its public sector earnings almost treble in 2021 when compared to the previous year.

What will 2022 bring?

Since the start of 2022, Oxygen’s Insights Pre-Procurement service – which provides suppliers serving the public sector with early insight into upcoming procurement opportunities – has published around 200 ICT-related opportunities, signalling a bright immediate future for government spending in the United Kingdom in this growing market.