Ministers go on spending spree to fill Brexit gaps

Extracts from an article written by Robert Lead, Industrial Editor at The Times.

"Central government has turned the spending tap on after the vote for Brexit with a stunning increase of more than 50 per cent in the value of public sector contracts going out to tender.

Research for The Times shows that in the first half of this month £26.3 billion of contracts were put out to tender. This includes a single £5 billion contract posted by the Liverpool-based division of the Cabinet Office’s Crown Commercial Service, which envisages finding a private sector partner for the provision of temporary workers around the country. The August figures follow £25.2 billion of public procurement released in the second half of July.

That means that over the past month about £13 billion of public sector contracts per week have been put up for grabs. That compares with an average of £8 billion a week over the previous ten weeks covering the immediate hiatus after the June 23 referendum and the weeks before the vote, according to data collated for The Times by Tussell, a provider of data analytics on the UK government’s supply chain." 

'In contrast to the post-Brexit vote slowdown in many parts of the UK economy, we are seeing a high value of published tenders, a leading indicator of strong public spending on procurement,' Gus Tugendhat, founder of Tussell, said." [...]

“It’s hard to imagine that this isn’t Brexit-vote related,” Mr Tugendhat said. “There was a slowdown in tender volume going into the referendum and we hit a low point in the fortnight to June 30. Since then it has come back very strongly. It is something we should perhaps expect. The government has a lot of investment gaps to fill. August data shows an unusually large surge in procurement from central government, accounting for 50 per cent of all contracts by value." [...]

"The data shows a slowdown in the actual awarding of contracts this month, which Tussell says reflects the pause before the referendum."

Read the full article on The Times's website.

Image: Reuters

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