Procurement Market Sector

The 2007 Pre-Budget Report showed that the projected Total Managed Government Expenditure (TMGE) for 2007-08 was £589 billion, compared with £555 billion in 2006-07 and £392 billion in 1996-97. TMG is planned to increase to £617 billion in 2008-09, £647 billion in 2009-10 and £678 billion in 2010-11.

Major areas of TMGE within the 2007-08 figure include:

• Defence – £32 billion
• Education – £78 billion
• Health – £105 billion
• Housing & environment – £22 billion
  
• Industry, agriculture, employment and training - £21 billion
• Personal social services – £27 billion
• Public order and safety – £32 billion
• Social protection – £153 billion
• Transport – £21 billion

The 2007 Pre-Budget Report highlighted that spending in the NHS will increase from £90 billion in 2007-08 to £110 billion by 2010-11. Spending on education will increase from £78 billion to £92 billion in the same period. Total public spending is set to grow at 2.1% per year between 2007-08 and 2010-11.

• Government spending on the direct delivery of quality services to the public is increasing.
• There is a drive towards larger contracts and the appointment of prime contractors and the opening up of sub-contractor opportunities.
• The Freedom of Information Act is driving the need for the public sector to be seen to have open and auditable tendering processes.
• The European Court of Justice has ruled that all public contracts, no matter what value, should receive appropriate advertising.
• The UK Government and European Commission view the process of opening up public tendering opportunities to more small and medium-sized enterprises (SMEs) as a key policy.
• The Government's aim is to deliver world-class public services through sustained investment and ongoing reform.

The Government launched its Comprehensive Spending Review 2007 (CSR) in 2005. The Review provides a long-term and fundamental review of government expenditure and covers departmental allocations for 2008-09, 2009-10 and 2010-11.

The Review states that a modern and responsive health service, high-quality education and training, effective, intelligence-led policing and security services and a fast and reliable transport network provide the essential foundations for a society in which economic prosperity is underpinned by fairness, safety and social justice.

The Government took forward a programme of preparatory work over 2006, including:

• An assessment of what the sustained increases in spending and reforms to public service delivery have achieved since the first CSR. The assessment will inform the setting of new objectives for the decade ahead.
• An examination of the key long-term trends and challenges that will shape the next decade – including demographic and socio-economic change, globalisation, climate and environmental change, global insecurity and technological change – together with an assessment of how public services will need to respond.
• Assessment of the resources needed to address these challenges, and to continue to secure maximum value for money from public spending over the CSR period.
• A set of zero-based reviews of departments' baseline expenditure to assess their effectiveness in delivering the Government's long-term objectives.
• Further development of the efficiency programme, building on the cross-cutting areas identified in the Gershon Review, to embed and extend ongoing efficiency savings into departmental expenditure planning.

Defence

Education

Health

Other