?? How Procurement Can Drive UK Economic Growth

?? As the UK Government ponders how to get the economy growing, this week I'm writing about how I think procurement could play a pivotal role in making that happen. Public and private sector procurement have the power to fuel economic growth, create jobs, and reshape industries. But are we using this potential to its fullest? it’s time to consider how procurement not just within government but across all UK goods and services agreements can play a pivotal role in driving investment, fostering innovation, and ensuring long-term stability in the economy.

?? Procurement professionals hold the key to economic transformation. Whether through government contracts or private sector investments, every purchasing decision impacts jobs, supply chains, and long-term resilience.. From major government contracts to private sector supply chains, our collective procurement choices influence where money flows, where jobs are created, and how resilient our economy becomes. As procurement professionals, we have a unique opportunity to reshape the economy, influence supply chains, and drive radical change. But what bold, ambitious steps can we take to make this happen? Here are some of the ideas I came up with.?

Enforce Prompt Payment Laws to Support UK Businesses

Businesses across the UK, from SMEs to large enterprises, are strangled by late payments, which disrupt cash flow and limit growth. We must go beyond prompt payment codes, public procurement notes and make prompt payment laws legally binding across all business activities, ensuring that all companies,, regardless of size, receive payment within 30 days, no exceptions. Failure to comply? Introduce financial penalties or increased corporate tax on persistent late payers. Those who consistently pay on time? Reward them with tax incentives or procurement advantages. Cash flow must never be a reason for small businesses to fail.

Supercharge UK Supply Chains & Private Sector Investment

If businesses procure 60% or more of their goods and services from UK tax-paying entities, they should be rewarded—lower taxes, preferential access to public procurement contracts, and access to zero/low interest government loans. If they offshore supply chains that could be demonstrably deliver in UK? They should pay significantly higher corporate tax.

This isn’t just about tax incentives. For all UK supply contracts over a certain value, say ￡500K, let’s offer training grants for new hires, full corporate NI exemptions on all hires under 25, and bonus tax benefits for multinationals that repatriate jobs back to the UK. Businesses choosing to offshore their supply chains should pay significantly higher corporate tax to disincentivize reliance on overseas markets. This approach applies to all procurement agreements, not just government contracts, to ensure every pound spent in procurement drives maximum UK economic benefit. By using procurement strategically, we can build an economy that works for the UK—one that is resilient, innovative, and sustainable. Surely a Brexit benefit ;0)

Leverage Public Procurement for Maximum Impact

The UK government spends over ￡300 billion annually on procurement. Let’s use this power strategically—procurement must be UK-first. The Public Procurement Act must mandate that UK taxpayer money is spent on UK companies that pay UK tax. No more outsourcing key contracts overseas for things that can be delivered in the UK, even if that means it may cost more.

We must take decisive, strategic action to ensure procurement delivers tangible benefits to the UK economy. Many countries strategically align procurement with their economic goals—how can the UK do the same? Our procurement strategy should much more overtly support UK businesses, drive domestic manufacturing, and force innovation here at home.

Use Procurement to Drive Innovation

Procurement contracts should go to businesses that create jobs, innovate, and invest in the UK. Longer-term contracts (3+ years) should be incentivised to provide stability, but with heavy penalties if they’re cancelled early. If a procurement contract leads to job creation, or capital investment then companies should receive additional tax benefits such as corporate NI reductions on new hires for a specified period, or no VAT on capital investment equipment.

Make Social Value More Than a Buzzword

Greater mandating of social value requirements into all 3rd party supply agreements. Businesses that invest in local companies especially in high-deprivation areas should get further tax incentives and procurement advantages. But we must ensure these policies aren’t loopholes for “post-box” operations—it must be real investment, real jobs, real growth.

Invest in Skills & Supplier Development

The government should take some of the tax raised from companies not complying with creating jobs/wealth in the UK to fund supplier development programmes. These grants should prioritise UK-based SMEs, ensuring that they have the resources to scale and compete globally.

Nearshoring & Taxing Offshore Dependence

As the world as become a more volatile place supply chain disruptions have proven that relying on overseas suppliers is a mistake. UK businesses must be incentivised to nearshore operations. And for multinationals that insist on using offshore shared services for tasks and services that can be easily delivered in the UK, then the Government should Tax them on those transactions, with the revenue used to fund UK supplier development programs.

A Bold, Ruthless, Ambitious Industrial Strategy

The UK's current industrial strategy could benefit from stronger, more focused commitments to supply chain resilience and investment in domestic industries. It lacks vision, ambition, and teeth. Other countries—Germany, South Korea, the US—invest in long-term economic growth through structured industrial policies in key industries. The UK must match and exceed these efforts.

This is the moment to be bold.

• The National Procurement Strategy should be the foundation of our industrial strategy.
• We must prioritise UK businesses in procurement and make investment in domestic supply chains mandatory.
• We must remove outdated EU-style restrictions and fully leverage Brexit freedoms to design an economy that serves the UK’s interests first.

The Time for Timidity is Over

As we see with Trump at the moment, other nations defend their economies fiercely. Why shouldn’t we? We must be bold and strategic in using procurement to strengthen the UK's economic future. Procurement is the lever to drive investment, stimulate jobs, and build a strong, self-sufficient, and resilient economy.

?? The question is: Are we ready to use procurement as the ultimate tool for economic transformation?

?? Now It’s Over to You The Procurement Professionals

UK procurement professionals, what ideas do you have to drive growth? Regardless of political persuasion, what bold, innovative measures should the government take via third-party spend to get the economy booming?

?? What do you think? How can procurement—public or private—fuel UK economic growth? What incentives, policies, or strategies would you introduce?

?? Comment below! Share your ideas. Let’s build a stronger, more competitive UK economy together. ??. Share your ideas, challenge the status quo, and let’s push for a strategy that makes the UK an economic powerhouse once again.