Press Release: Tussell reveals top regular suppliers in 2018

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Tussell research reveals top suppliers to Central and Local Government in 2018

Rolls-Royce tops lists of top suppliers to Central Government as total value of public procurement declines


  • Nearly £50 billion in public sector contracts in 2018 – £5 billion less than 2017

  • Rolls-Royce the top supplier to Central Gov, Places for People to Local Gov

  • Signs that government policy of contract disaggregation is taking effect

  • Central and Local Gov are engaging heavily with markedly different suppliers - no firm makes the top 20 suppliers to both

  • Some troubled firms make the top 20, including Interserve and Kier

  • Four SMEs/VCSEs in the top 20 suppliers to Local Government



In a turbulent year for government outsourcing, RollsRoyce has emerged as the top regular supplier to Central Government in 2018, winning six contracts with a total lifetime value of £766 million. Excluding frameworks, the total lifetime value of procurement contracts issued by the wider public sector in 2018 was £49.5 billion – a £5 billion (-10%) decrease on 2017.

There are welcome signs that the government’s drive to unbundle large contracts into smaller and less risky schemes of work (known as “contract disaggregation”) is having an impact. In spite of the 10% fall in the overall value of public procurement, the number of public sector contracts awarded actually increased by 20% in 2018 to 40,130 contracts. This means that the government is awarding a higher number of contracts at a lower average value. This shows that government has learnt lessons from over-reliance on a small number of large suppliers such as Carillion and from large-scale IT projects going over budget like HMRC’s Aspire project.

Construction was once again the biggest sector by value in public procurement, with nearly £14 billion worth of contracts awarded in 2018. Five Construction firms make the top 20 suppliers to Local Government – Wates, Vinci SA, Kier, Graham and Royal BAM, and two are in the top suppliers to Central Government – Balfour Beatty and Galliford Try.

Central Government

Eight of the Cabinet Office’s designated “Strategic Suppliers” make the top 20 Central Government regular suppliers by value in 2018, including troubled outsourcer Interserve as well as Capita and Amey. Amey, whose parent company Ferrovial recently announced it is exploring options to sell the firm, was the most successful Strategic Supplier by value, winning 8 contracts from Central Government worth £641 million. Of the Strategic Suppliers, Capita won the highest number of contracts, with 49 contracts from Central Government at an aggregate value of £254 million. Mitie’s £514 million contract in April 2018 to manage immigration removal centres was the largest single contract awarded by Central Government to any of the Strategic Suppliers.

Four of the top Central Government suppliers won less in 2018 than in 2017 – Turner & Townsend, Fujitsu, Interserve and BAE. Interserve, which recently announced a financial rescue plan, won contracts worth £294 million less from Central Government than in 2017, a 75% decrease in award value. Given Interserve has announced multiple profit warnings in the last two years, this is an encouraging sign that the government is learning the lessons of Carillion, which was awarded several high value contracts from Central Government even after repeated profit warnings.

Local Government

The top regular suppliers to Local Government in 2018 were markedly different to Central Government – not a single supplier makes both lists. Places for People’s appointment as a development partner to Surrey and Sussex Council – reportedly worth £1.5 billion – cements their place at the top of the list of Local Government suppliers.

Four of the top Local Government regular suppliers in 2018 were SMEs or VCSEs, compared to only one in Central Government (Marie Stopes). If Central Government is serious about implementing its social value agenda then in this case it could learn from best practice in Local Government.

The top 20 regular suppliers to Central Government won 26% of the £17 billion worth of contracts awarded in 2018. Although this is down by more than one third from 2017 when the top 20 suppliers won nearly 40% of the total contract value, it is still a significant level of supplier concentration. Given that contracts awarded to the top Central Government suppliers in 2018 have an average duration of two years, over-reliance on suppliers today will take some time to unwind. In Local Government, the top 20 suppliers won 25% of the £17.4 billion worth of contracts awarded in 2018. The proportion of total award value going to the top 20 Local Government suppliers has been declining steadily since 2015.

Gus Tugendhat, founder of Tussell, says:

“Our analysis of the top suppliers to Central and Local Government in 2018 shows positive signs that the government is learning the lessons of the collapse of Carillion. There are indicators that big contracts are being broken up, troubled suppliers are being monitored closely and there is increased engagement with SMEs and social enterprises, particularly at the Local Government level. However, government still remains quite reliant on a small number of companies, indicating that there is still more to be done in terms of reducing risk in the public sector supply chain.”


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