Amazon's increasing involvement with the UK public sector

Exclusive Tussell analysis for the GMB on Amazon's expanding role within the UK public sector. Enter your details below to download the full report. 

Tech giant Amazon, having established its dominance in online retail, is steadily expanding into the UK government marketplace as well. Tussell analysis commissioned by the GMB today reveals that since 2015 Amazon has won nearly 40 contracts from the UK public sector. In 2018 alone Central and Local Government bodies in the UK spent nearly £50m with the firm. While most of this is for the provision of cloud hosting services through its Amazon Web Services subsidiary, the US firm is also starting to bring its marketplace services to the UK public sector, particularly focusing on streamlining Local Government procurement. 

Key Findings
  • Since 2015, Amazon has won nearly 40 contracts from the UK public sector
  • Last year, Central and Local Government buyers spent nearly £50m with the firm, according to official spend data published by public bodies
  • Central Government is mostly buying cloud services from the firm, with the Home Office, HMRC and the Ministry of Justice all spending upwards of £8m with Amazon in 2018
Biggest Amazon Contracts since 2015

By far the largest contract Amazon has been awarded by the UK public sector is the Yorkshire Purchasing Organisation's (YPO) Digital Marketplace Platform deal signed with Amazon in July 2018. This contract is intended to allow the YPO (a procurement organisation that consolidates purchasing on behalf of its local authority members in the North East) to create an online 'one-stop-shop' through which public bodies can purchase a wide range of products. This was the first major UK public contract awarded to Amazon's retail arm, and followed similar agreements the firm has in place for procurement in the US. Last year the US government introduced an amendment to the National Defence Authorization Act - nicknamed the 'Amazon Amendment' - that requires government to come up with an ecommerce solution for all purchasing. While the YPO agreement is not mandatory, it is evidence that the firm is gaining a foothold in the UK public sector.

Amazon's other large contracts since 2015 come from HMRC and the Home Office for cloud hosting services. 

Buyer Value Title
Yorkshire Purchasing Organisation up to £400m* Digital Marketplace Procurement Portal (2019)
HMRC £20m HMRC Compute (2019) 
Home Office £5.5m Strategic Hosting Consumption (2015)
HMRC £5m Amazon Web Services (2017)
Home Office £4.8m Strategic Hosting (2017)

Local Government and Amazon

While Central Government involvement with Amazon is mostly for cloud services, Local Government bodies are instead using Amazon for relatively small procurement packages. More than 30 Local Government buyers recorded over 20k transactions with Amazon in 2018, in total worth more than £750k. Only one local authority - Peterborough Council - made any significant purchases of Amazon Web Services, spending around £600k with the firm in 2018. It is still too early to tell how the YPO marketplace agreement will affect Local Government spend through Amazon. 


All in all, although Amazon's public sector footprint is expanding quickly it is not yet a major supplier to the UK government. There are many other firms with which the government is spending more money - and to which it is more exposed in the event of continued financial difficulty in the outsourcing sector. However, it is clear that Amazon has ambitions to expand in the public sector market, and over time may yet replicate the success it has had in the online retail space. 

Interested in finding out more about Amazon's involvement with the UK public sector? Enter your details below to get the full report into Amazon's public sector contracts and revenue sent straight to your inbox. 

*This contract was originally published as being worth up to £600m, however since this research was conducted the YPO have re-estimated the value of the contract to instead be worth up to £400m. You can see the updated notice here

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