G-Cloud News

In summary

The puzzle of H1 2015

This month, we are starting to see a stabilisation of IT spend via G-Cloud at around £120m per quarter. We are not sure exactly why this is but the data hints at a few contributing factors:

It looks likely that the aftermath of the election has slowed or changed investment plans. We expect this to resolve itself over time, but perhaps not until after the results of the Spending Review (CSR15) are announced by the Chancellor in November.

The big spending departments continue to accelerate spend. For example Home Office spent £37m in H1 2015 compared to £21m in H1 2015.

The number of buyers continues to grow strongly and steadily - up 174 in H1 2015 compared to 183 in H1 2014.

As the number of suppliers grows, it is logical that price competition will increase resulting in a gradual reduction in spend. We have no hard evidence as to the amount of such reductions but would love to work on that if Cabinet Office published the data.

Forecast

At the start of the year, we forecast total G-Cloud spend for 2015 above £500m. That looks realistic but our 'stretch' forecast of £700m now looks pretty unlikely due to the stabilisation of spend in H1 and the negotiations around CSR15 which will delay transformation investment until 2016.

Review of May data

The number of customers continues to grow - up 22 (bringing the total to 869).

The number of suppliers is growing - up 12 (bringing the total to 579).

Overall framework stats

Total spend is via G-Cloud is £664m

Spend by year is £217m in 2015 (so far), £352m in 2014, £87m in 2013 and £6.6m in 2012.

Spend with Small and Medium Sized Enterprises (SMEs) continues at pace - £108m in 2015 so far, £173m in 2014 with £42m in 2013.

After a what looks like a pre-election boost, monthly spend is stabilising around £35m - £40m a month (expect June figures to be revised upwards when the next data set is released).