More than £13 billion generated by public procurement

Scotland’s known public sector procurement spend in 2022-23 delivered an estimated 120,000 full-time equivalent jobs and £7.5 billion to Scottish GDP.

The sixth annual report on procurement activity in Scotland shows that known procurement spend generated an estimated £13.7 billion in economic activity.

Small or medium size enterprises (SMEs) in Scotland benefited from more recorded procurement spend compared to the previous year. 61 pence in every pound spent in Scotland was with SMEs, up from 55 pence in every pound the year before.

Public Finance Minister, Ivan McKee said:

“Public procurement contributes billions to Scotland’s economy and supports thousands of jobs.

“The increase in contracts awarded to SMEs is particularly welcome. SMEs are critical to the economic lifeblood of Scotland and can often bring an agility and flexibility that allows them to introduce innovative solutions faster than larger organisations. 

“Public procurement has a pivotal role to play in delivering a sustainable future for Scotland and with a spend that is now in excess of £16 billion a year, we have an opportunity to make a real difference through using this in even more productive and innovative ways.”

Background

Under the Procurement Reform (Scotland) Act 2014, public bodies must consider and act on opportunities to achieve economic, social and environmental benefits through spending on goods and services.

Public bodies include local authorities, universities, NHS health boards and housing associations.

The report also shows:

• Known Scottish public sector procurement spend totalled £16.6 billion in 2022-23, of which £8.9 billion was spent in Scotland alone.
  
  
• Suppliers based in the 60% most deprived areas received approximately £500 million more known procurement spend on the previous year, totaling £4.8 billion.
  
  
• Third sector organisations received an estimated £1.2 billion (or 13.3%) of known public procurement spend in Scotland during the reporting year.
  
  
• 107 public bodies reported examples of the ways in which environmental wellbeing and climate change were addressed through procurement.
  
  
• Some 18,079 suppliers were awarded contracts through the Public Contracts Scotland platform. Of these suppliers, 77% were SMEs.

Annual report on procurement activity in Scotland: An overview of procurement activity 2022 to 2023 - gov.scot