The 'Buy British' Mirage: Whitehall's Procurement Trap

The UK government's rhetoric regarding 'buying British' is colliding with a stark reality: the machinery of the British state is overwhelmingly powered by American technology. As first reported by The Register, a report by the Institute for Public Policy Research (IPPR) titled *Locked In: A Realist's Agenda for Digital Sovereignty* reveals that while 42.5 percent of spending with the public sector's 150 largest tech suppliers appears to go to UK firms, the actual figure drops to 15.4 percent when accounting for overseas ownership and staffing.

**Opinion:** This discrepancy exposes a fundamental failure in industrial policy. By allowing 'British' status to be defined by a headquarters address rather than actual domestic capability, Whitehall has created a facade of sovereignty while the procurement game remains firmly in the hands of US incumbents.

**The Reseller Loophole** Much of the perceived domestic spending is an illusion created by resellers. The Register reports that 43 percent of spending attributed to UK-headquartered suppliers goes to these intermediaries, who simply resell technology from US giants like Microsoft. Bytes and Softcat are two of the three biggest recipients of public sector tech spending, together claiming approximately £2 billion. Once these reseller contracts are traced back to the original product creators, the US emerges as the dominant beneficiary, claiming £9.2 billion of the £19.2 billion spent with the largest suppliers.

**The AI Bundle and Market Lock-in** The report highlights a troubling trend in AI procurement: technology is often bundled into existing cloud agreements and enterprise licenses, bypassing competitive bidding. The Register cites the rollout of Microsoft 365 Copilot to 505,000 NHS England staff as a prime example; this was executed under a national licensing agreement signed in June 2023, before the product was generally available. This bundling prevents rival suppliers from competing and deepens the UK's dependence on Silicon Valley.

**A Lack of Competition** Transparency remains a significant hurdle. IPPR found that for 89.9 percent of government IT contracts signed over the previous year, there was no published record indicating how many suppliers had bid for the project. Furthermore, the market is highly concentrated: just 150 companies receive 83 percent of public sector tech spending, with the top 15 accounting for nearly half. Smaller suppliers are largely sidelined, receiving only 12 percent of government tech spending, compared to 27 percent across general government spending.

**The Path Forward** While the government has committed £500 million to a Sovereign AI Fund, IPPR researchers argue that funding alone cannot break the US grip. Roa Powell, a senior research fellow at IPPR, suggests the UK must negotiate as a single customer and pool buying power with other 'middle powers' such as Japan, South Korea, France, and Germany. Darren Jones MP, who wrote the report's foreword, echoed this sentiment, stating that Britain must work with international allies to shape markets rather than attempting to build everything domestically.