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Brexit impact on public sector technology spend

While businesses have been resilient in the face of the Brexit adversity, it would appear the public sector is closing up for business early this Christmas.

The negative or positive impact of Brexit on the economy has been debated continuously since the announcement of the referendum, though data collected from the Crown Commercial Service has shown the decision has been impacting the technology industry.

Over the course of the nine months leading up to the referendum, the Crown Commercial Service put out on average 815 tenders per month, however since the vote this has declined to 652, representing a 20% decline pre and post Brexit. Comparing the year-on-year statistics over September and October between 2015 and 2016, the number of tenders has declined 36% indicating the impact of Brexit on UK public sector technology spend.

“There is plenty of economic data and evidence suggesting that the UK economy has been resilient in the face of the Brexit vote,” said Chris Evans, Managing Director of hSo. “We were particularly encouraged by the Chancellor’s Autumn Statement with the focus on investment in infrastructure and improving productivity, which will give rise to many more opportunities for the private sector as companies find ways of becoming more efficient and keeping costs down.

“However, in respect to public sector government tenders issued, there has been a slowdown since the EU Referendum. It’s understandable, given we have recently had the appointment of a new Prime Minister that the new administration is accustoming itself and looking to make its mark. However, this shouldn’t prevent them from maintaining the momentum that was evident earlier in the year ahead of the Brexit vote.

“Before the Brexit vote there was clearly a big push by private and public sector SMEs to reign in their IT and network infrastructure spend, but since then as economic activity has slowed there’s now even greater reason for businesses to look at more cost efficient network, telephony and hosting solutions.”

One of the more notable changes has been the tone of tenders, as a higher proportion have been focused around driving efficiencies and cost savings, owed to uncertainty caused by Brexit. The Autumn Statement has been a saving grace for the telco and technology industry however, as the UK government dedicates £700 million to new fibre broadband and 5G connectivity investments.

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