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Autumn Budget 2017 Public Procurement Opportunities

autumn budget announcement: public procurement opportunities

Theresa May has declared that the latest Budget announcement will make the UK “fit for the future”. This leaves us wondering what public procurement opportunities will come from this optimistic budget.

If you have been following the fallout from the announcement on 22 November, then you will know that technology, housing and infrastructure were three of the sectors that have been given the biggest boost.

The Government’s Commitment to SMEs

Moving forward, the Government wants to work with innovative businesses from different backgrounds.

Last Wednesday, Chancellor of the Exchequer Philip Hammond said:

“If we don’t do more to support the growth of the SME housebuilding sector, we will remain dependent on the major national housebuilders that dominate the industry”.

The Government is keen to increase diversity in the housebuilding sector, which is currently dominated by a handful of large companies. The Government also sees small to medium-sized enterprises – which make up 99% of UK businesses – as key to economic growth and development and has set ambitious targets for doing business with SMEs since David Cameron came into office in 2010.

The Government’s aim is that by 2020, one pound in three of government procurement spend will go to SMEs, whether directly or indirectly as part of the supply chain. This suggests that there will also be subcontracting opportunities that will boost employment and business growth statistics within the UK.

more money for public procurement after the budget

How Does Subcontracting Work?

The Budget will not only open up opportunities for larger companies, but spending is likely to have a ‘trickle down’ effect.

Data from the National Audit Office shows that 60% of the Government’s spending with SMEs came via a larger contractor in the supply chain.

If a larger company does win a sizable contract, they often need to rely on subcontractors to deliver certain aspects of the work, particularly in specialist areas.

Where Are the Opportunities?

The Budget announcement promised that the Government will support the building of 1 million new homes in Oxford-Cambridge corridor. This follows on from the 2016 Budget, which included funding for a new road between Oxford and Cambridge.

On top of this, £540 million will be spent on infrastructure in Northern Ireland as part of the Conservatives’ deal with the DUP. This boost for both housing and infrastructure means that procurement opportunities across a variety of sectors throughout the UK will start to open over the next year or so.

Other opportunities for infrastructure included the investment into the replacement of the 40-year-old rolling stock on the Tyne and Wear Metro, which will be funded by Government money.

Find & Win Public Procurement Tenders

Our Industry Highlights blog features the main takeaways from each sector, including a breakdown of where the money will be spent and what it will be spent on.

It is important that, as soon as your organisation spots a public procurement opportunity, you start to strike up pre-tender conversations. This will leave an impression with buyers who want to work with individuals in your sector.

Start the Process

If you are part of an SME business, now is a perfect time to start looking for public procurement prospects.

When it comes to tendering, you should always stay one step ahead of your competition. Our products allow suppliers in all sectors to find relevant tenders as soon as they become available. This means that suppliers can bid more competitively.

If you have pinpointed an area of Government investment and view it as an opportunity to sell to the public sector, now is a good time to purchase a subscription to a public procurement portal like Tracker Intelligence.

For a better insight into our products, visit our website.

Autumn Budget 2017 – Industry Highlights

UK Autumn Budget 2017 Announcement in London

Chancellor of the Exchequer Philip Hammond presented the Government’s first Autumn Budget on 22 November. An optimistic Mr Hammond opened his Budget stating that he hoped for a “Britain that we can be proud of”, and after he promised us a “Britain fit for the future”.

This forward-thinking Budget very much focused on the needs of millennials, start-up businesses and the technology sector with stamp duty land tax (SDLT) on homes under £300,000 for first-time buyers abolished and investment allocated to a range of initiatives from artificial intelligence to 5G and full fibre broadband.

Housing, Health and Infrastructure were also given a boost, which is great news for those looking for future procurement opportunities in these key sectors. The Chancellor announced that the UK is on track to build 300,000 new homes per year, and that he wanted to connect those who are living outside of city centres with new transport initiatives.

If you want the breakdown of all the Autumn Budget 2017 figures, here you can discover what public sector pipelines of work await your industry sector.

Technology

  • Philip Hammond said that there is a “new tech business in Britain founded every hour”; he wants that to change to “every half hour”.
  • The Government plans to invest over £500m in a range of initiatives from artificial intelligence to 5G and full fibre broadband.
  • The Government wants to invest in driverless vehicles, with fully self-driving cars to be on UK roads by 2021.
  • A new £400m charging infrastructure fund will be introduced. The Government will invest an extra £100m in the Plug-In-Car Grant, and £40m in charging R&D.

Transport

  • £30m to trial new solutions on the Trans Pennine route to improve mobile and digital connectivity on trains.
  • The Government will fund the replacement of the 40-year-old rolling stock on the Tyne and Wear Metro.

Regional Government

  • The Chancellor announced spending power increases for the Scottish and Welsh Governments and the Northern Ireland Executive.
  • £2bn more for the Scottish Government.
  • £1.2bn more for the Welsh Government.
  • £660m more for the Northern Ireland Executive.
  • Government in talks to provide Northern Ireland with new city deals.

Local Authorities

  • The Government will invest £38m in the West Midlands, Liverpool and Manchester to help rough sleepers.
  • More than £1bn of lending will be made available to councils to fund high-investment projects.
  • The Government will provide Kensington and Chelsea Council with a further £28m for mental health services, regeneration support for the surrounding areas and a new community space for Grenfell United.
  • The Chancellor urged local councils that require funding for fire safety (housing) to reach out to the Government.

Health

  • An additional £10bn has been assigned to the NHS over the course of this Parliament to support the NHS’s Sustainability and Transformation plans.
  • Additional commitment of resource funding of £2.8bn to the NHS in England.
  • £3.5bn to upgrade NHS building plans to improve care.
  • NHS staff will receive a pay rise.

SMEs & Business

  • Mr Hammond said that “this Conservative Government is listening to small businesses”.
  • He aims to bring forward the planned business rates switch from RPI to CPI by two years.
  • The Government is extending the £1000 discount for pubs with a rateable value of less than £100,000 for one more year to March 2019.
  • The ‘Staircase tax’ will be axed.
  • Businesses to gain £2.3bn thanks to a change in the rules for the uprating of business rates.

VAT

  • The UK has the highest VAT registration threshold in the OECD, at £85,000. This will not be lowered but Mr Hammond will look at reforming it.
  • No reduction in the VAT threshold for SMEs.
  • Scottish Police and Fire will get a VAT refund from April 2018. The Chancellor puts the VAT change down to the influence of Scottish Tory MPs: “I am getting used to having my ear bent by my 13 Scottish Conservative colleagues.”

Housing

  • Over the next five years the Government will commit a total of at least £44bn to capital funding, loans and guarantees to support the housing market.
  • Mr Hammond announced that the UK is on track to reach 300,000 new homes per year.
  • New money for the Home Builders Fund to get SME housebuilders building again.
  • The Government is allocating £1.5bn to help smaller firms build more houses.
  • Housing Infrastructure Fund to increase to £2.7bn.
  • Abolition of stamp duty for all first-time buyers (up to £300,000).
  • Government committed to build up to one million homes in the Oxford-Cambridge-West Mids Corridor.

Autumn Budget Procurement Budget

What does this Budget mean for procurement?

The Chancellor announced that he will extend the National Productivity Investment Fund for a further year and expand it to over £31bn.

What we can take away from this year’s Budget is that the Government is spending money in the following areas:

  • Transport
  • Digital Communications
  • Productivity
  • Housing
  • Infrastructure

This means that now is an excellent time to invest in public procurement. If you would like to find out how you can start to win government tenders, there is more information about this in our Ultimate Guide to Winning Government Contracts.

To find out more about our business and products, visit the BiP Solutions website.

Autumn Budget Predictions 2017

how will the autumn budget effect procurement

Procurement and best value public service delivery take place within the constraints of broader public sector budgetary provision. Here, we look at some of the more popular predictions for this year’s Autumn Budget and the potential impact on public procurement.

Why has the Autumn Statement changed?

As the Autumn Statement was scrapped by Philip Hammond in 2016, the Chancellor of the Exchequer will instead present his Autumn Budget on 22 November 2017. As always, the Budget will be presented in the House of Commons, outlining the Government’s national spending plans for the year ahead.

8 March 2017 saw the last budget to be held during the spring. The Government decided to switch the interim statement and full budget on the recommendation of the Institute for Fiscal Studies (IFS). As there is now an Autumn Budget, there will be a Spring Statement in 2018 instead.

The Government has also released an official statement explaining that changing the tax system once a year, rather than twice, will lead to greater financial stability.

Procurement predictions

First, let’s look at what the broader outcome is likely to be. When Philip Hammond became Chancellor of the Exchequer last summer he pledged to reduce public borrowing to less than 2% of national income by 2022. This bold plan aims to eliminate the budget deficit totally by the mid-2020s.

This would suggest that public spending can expect to face further cuts; however, pressure from public sector bodies means that the Chancellor’s spending plans may be reassessed. If public spending were to increase, that would be excellent news for those organisations seeking to do business with the Government.

We will not know what the Autumn Budget contains until the Chancellor’s famous red briefcase is opened on Wednesday; however, we can make some informed predictions about what will be revealed on the day.

Healthcare

It is no secret that Health Secretary Jeremy Hunt wants more money to spend on the National Health Service – could this mean that there will be an increase in the NHS budget?

We can only surmise that more money will be allocated. The Autumn Budget will reveal whether or not the Conservative Government sticks to its 2017 general election manifesto. Earlier this year the Government pledged to increase NHS spending by a minimum of £8 billion over the next five years.

Tax

How has taxation changed in recent years? The Spring Budget 2016 stated that the Government would reduce corporation tax from the then current rate of 20% to 17% by 2020. So far, the Government has reduced it by 1%; this occurred in April this year.

Will the Government make further changes? Many have predicted that with only eight months between the Spring Budget and the Autumn Budget, it could be that this will be a quiet Budget for tax measures. The Finance Bill 2018 is currently available for access – and it already contains eight tax measures.

Impact on the private sector

Could the contracting community be affected by this year’s Autumn Budget? Potentially.

Changes to IR35 in the public sector are expected to be rolled out in time across the private sector. This would see responsibility for determining IR35 status shift from the limited company contractor to the private sector body that is engaging them, in line with practice in the public sector.

What is IR35? To summarise, IR35 is tax legislation that has been designed by the UK Government to combat tax avoidance by workers supplying their services to clients via an intermediary, such as a limited company.

Commentators are becoming increasingly confident that such a measure affecting the private sector will not feature in the forthcoming Autumn Budget. Instead, there is hope that the Government will give the public sector reforms more time to bed in, and tackle the issues arising from them first.

How can we forget Brexit?

It is still unclear what way Brexit negotiations are going. However, the Government has already announced £250 million in extra departmental spending on preparations – which includes planning for ‘no-deal’ scenarios.

The uncertainty and controversy that continues to surround the Brexit legislative programme also hints at what the Chancellor may or may not propose at this Autumn Budget. We predict that he is less likely to announce any controversial proposals that could split opinion on the back benches.

Preparing for Brexit is something that every organisation should consider. If you are working within the UK marketplace, we advise that you look over our Brexit: A Buyer Perspective PDF. This report is an excellent resource for businesses looking to plan ahead as it examines public sector buyer opinion across a range of topics.

Release of the Autumn Budget 2017

Not long to wait now! If you want to keep up with all of the latest news from the Autumn Budget 2017, this Wednesday 22 November, live tweets will be available on the Gov Opps Twitter feed.

We will then cover the key points for the procurement sector in detail once the Budget has been fully released. We have been helping to connect the public and private sectors for over 30 years, and are now Europe’s leading provider of procurement support and intelligence. Find out more about our brands and what we do here.

All our news posts on the public sector feature on the “News & Resources” section of our website and on our LinkedIn page.