Public Procurement Generated More Than £13 Billion In 2021-22

15th April 2024

Scotland's public sector procurement spend generated more than £13 billion in economic activity and contributed £7.5 billion to Scotland’s GDP in 2021-22, a new report has shown. The fifth annual report on procurement activity in Scotland shows that in 2021-22 public sector procurement spend during the year reached £16 billion with £8.9 billion spent in Scotland.

Small or medium size enterprises (SMEs) in Scotland received £4.2 billion. This equates to 55 pence of every pound spent with suppliers in Scotland, up from 51 pence in every pound the year before. In total, 48.9% of all public procurement spend in Scotland - £4.3 billion – was with suppliers based in Scotland’s 60% most deprived areas compared with 48.7% – £3.9 billion – the year before.

Public Finance Minister, Tom Arthur said, "As Scotland grappled with the impact of the pandemic as well as the cost of living crisis, it is encouraging that these figures show how public sector purchasing power helped contribute billions to the Scottish economy and supported thousands of jobs.

"We are absolutely committed to continuing work to improve our public services and this report demonstrates how public sector procurement can act as a driver to generate a range of positive economic, social and environmental benefits.

“The commitment from public bodies to deliver responsible procurement which benefits businesses, employees and communities in Scotland is clear. I welcome this report and the important role procurement plays to make Scotland a better place to live, work and do business."

Under the Procurement Reform (Scotland) Act 2014, public bodies must consider and act on opportunities to achieve environmental, economic and social benefits through spending on goods and services.

Public bodies include local authorities, universities, NHS health boards and housing associations.

The report also shows:

£3.8 billion (or 43.3%) of spend in Scotland was with suppliers based within the local area of the purchasing body.

71% of reporting bodies provided evidence of how they were addressing environmental wellbeing and climate change through procurement.

Some 18,880 suppliers were awarded public sector contracts through the Public Contracts Scotland portal. Of these suppliers, 78% were SMEs.

Procurement spend generated around 130,000 full-time equivalent jobs